Exam CFE-Fraud-Prevention-and-Deterrence Topic 2 Question 209 Discussion

Actual exam question for ACFE's CFE-Fraud-Prevention-and-Deterrence exam
Question #: 209
Topic #: 2

Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

A. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem. B. Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept. C. Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program's effectiveness. D. Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.

Suggested Answer: C Vote an answer

* Defining Fraud Risk Management Objectives:
* Management should focus on tailoring objectives to the organization's needs, examining past fraud incidents, and balancing costs with benefits. Assigning a quantitative measure to risk appetite, while potentially useful, is not a requirement for effective fraud risk management.
* Analysis of Options:
* A. Examining previous frauds: This helps identify vulnerabilities and design controls.
* B. Balancing costs and benefits: Essential to ensure the program's efficiency and feasibility.
* D. Tailoring objectives: Necessary for aligning the program with organizational goals.
* Conclusion:Option C is false because assigning a quantitative measure to risk appetite is not mandatory in defining fraud risk management objectives.
References:ACFE materials on fraud risk management program design and implementation.

by Megan at Jul 08, 2026, 03:55 AM

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