Exam CFE-Fraud-Prevention-and-Deterrence Topic 3 Question 45 Discussion

Actual exam question for ACFE's CFE-Fraud-Prevention-and-Deterrence exam
Question #: 45
Topic #: 3

Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

A. Green a CFE, uncovered several material internal control deficiencies unrelated to the financial statement fraud he was investigating. In his final report to management. Green included information about the deficiencies even though they were unrelated to the situation he was hired to investigate. B. Stephanie, a CFE, accepted a fraud examination assignment and then instructed a lower-level employee to assess the company's cash records for signs of fraud. She took his word when he said there was no evidence of wrongdoing and ended up failing to uncover a very costly fraud scheme. C. Susan, a CFE, was hired by a client to conduct a fraud examination but found nothing amiss A year later, she received a legal order from the local prosecutor's office to provide the client's file. Susan complied with the court order, even though she did not have the client's authorization to do so. D. All of the above are violations

Suggested Answer: D Vote an answer

* Analysis of Each Option:
* A. Green's conduct: Including unrelated deficiencies violates the principle of relevance and focus in reporting. It may lead to confusion or breach professional diligence.
* B. Stephanie's conduct: Delegating tasks without oversight or review violates the ACFE Code's requirement for due diligence.
* C. Susan's conduct: Failing to seek client authorization before disclosing records (even under a court order) breaches confidentiality provisions unless explicitly required by law.
* Key Ethical Considerations:
* CFEs must adhere to principles of confidentiality, diligence, and focus in their work.
* Failing to follow these standards compromises the integrity and credibility of their practice.
* Conclusion:All the described scenarios involve violations of the ACFE Code of Professional Ethics.
References:ACFE Code of Professional Ethics-rules related to diligence, confidentiality, and professional behavior.

by thandomoletsane6 at Jun 07, 2026, 03:29 AM

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thandomoletsane6

2026-06-07 03:29:00

Selected Answer: B

Option A: The ACFE Code of Professional Ethics permits (and encourages) a CFE to reveal material matters discovered during an examination. If omitting these internal control deficiencies would cause a distortion of the facts or leave management exposed, reporting them is completely ethical—even if they fall outside the initial scope.Option C: CFEs are strictly bound to protect client confidentiality. However, the ACFE confidentiality rules explicitly state that a member can disclose confidential information when responding to a lawful order of a court or legal subpoena. Susan was legally required to comply with the prosecutor's order

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