FRAUD PREVENTION AND DETECTION AUGUST 2023 PAST PAPER

MONDAY: 21 August 2023. Morning Paper. Time Allowed: 3 hours.

Answer ALL questions by indicating the letter (A, B, C or D) that represents the correct answer. This paper is made up of one hundred (100) Multiple Choice Questions. Each question is allocated one (1) mark.

1. Which of the following parties has overall responsibility for an organisation’s fraud detection and prevention initiatives?

A. Board of directors
B. In-house legal counsel
C. Management
D. All of the above (1 mark)

2. According to B F Skinner, positive reinforcement measures are the most effective measures for modifying behaviour. Which of the following BEST describes positive reinforcement measures?

A. Positive reinforcement measures are examples of strong controls
B. Positive reinforcement measures are examples of preventive and detective controls
C. Positive reinforcement measures are examples of weak controls
D. All of the above (1 mark)

3. Which of the following should management NOT do, to create an anti-fraud culture?

A. Develop a code of ethics and compliance policies for all employees
B. Demonstrate zero tolerance for fraud and unethical behaviour
C. Create an open-door policy environment
D. None of the above (1 mark)

4. Which of the following is TRUE in regard to assignments and Certified Forensic Fraud Examiners (CFFE) in relation to conflict of interest?

A. A CFFE can accept an assignment where he/she has a major interest
B. A CFFE cannot accept an assignment where he/she has a major interest
C. A CFFE must be an accountant to conduct a forensic audit assignment
D. None of the above (1 mark)

5. Which of the following statements in regard to employees’ reporting program is ACCURATE?

I. Some organisations are immune to fraud
II. Employees are encouraged to come forward and report suspected fraud
III. The employee’s identity must be disclosed
IV. The report need not be made to the employee’s manager or supervisor
A. I, II, III and IV
B. II and III
C. I, II, and IV
D. None of the above (1 mark)

6. According to the 2022 Report to the Nations, CFFEs estimate that organisations lose what percentage of their revenues to fraud and abuse each year?

A. 10
B. 2
C. 4
D. None of the above (1 mark)

7. Among the parties listed below, who plays a critical role in enhancing the reliability of financial information by attesting as to whether the financial statements prepared by management fairly present the financial position and past performance in compliance with applicable standards.

A. Members of the Board of Directors
B. Internal auditors
C. Government regulators
D. None of the above (1 mark)

8. Which of the following BEST describes the opportunity leg of the fraud triangle?

A. “Management is perpetrating fraud, so it is not a big problem?”
B. “I need money to repay my debts”
C. “Possibility of detection is very low or none”
D. “I have an emergency, I have no other means” (1 mark)

9. Law and morals are similar, though not everything that is immoral is illegal. Which of the following BEST describes the lowest level of reference for morals or ethical decisions?

A. Policies and code of ethics
B. Social control
C. Philosophy of criminology
D. None of the above (1 mark)

10. According to International Standard on Auditing (ISA) 240, the auditor is only concerned with fraud that:

A. Is perpetrated by management by overriding controls
B. Is perpetrated through collusion
C. Is of high risk to the organisation
D. None of the above (1 mark)

11. Silk and Vogel found that businesses rationalise illegal or non-compliant conduct. Which of the following did they find NOT a justification for violation?

A. Violations is for purposes of retaining jobs security
B. Compliance with government regulations is expensive
C. The damage done by violations is distributed among a large number of parties
D. None of the above (1 mark)

12. According to COSO, an internal control system should be designed to provide reasonable assurance regarding the achievement of the organisation’s objectives. Which of the following is NOT an objective?

A. The effectiveness and efficiency of the organisation’s operations
B. The financial reporting
C. The organisation’s compliance with the laws and regulations.
D. None of the above (1 mark)

13. Which of the following is NOT a core principle of sound corporate governance?

A. Fairness
B. Responsibility
C. Transparency
D. None of the above (1 mark)

14. Which of the following parties has responsibility for the oversight of the organisation’s financial, accounting, and audit matters?

A. The Chief Finance Officer
B. The audit committee
C. The external auditors
D. The board (1 mark)

15. Which of the following is NOT accurate in regard to fraud?

A. A strong control is not necessarily effective
B. Absence of internal controls is the main root cause of fraud
C. Red flags and risks of fraud are not evidence of fraud
D. An effective internal control system can reduce incidences of fraud (1 mark)

16. Which of the following is ACCURATE in regard to white-collar offences?

A. White-collar case evidence is usually overwhelming
B. White collar defendants are less likely to insist on a trial
C. White collar defendants are more likely to be jailed
D. None of the above (1 mark)

17. The theory that tries to prevent crime by using the threat of criminal sanctions is referred to as _______________.

A. Prevention
B. Response
C. Compliance
D. None of the above (1 mark)

18. Which of the following is an effort to control corporate crime?

A. Compliance and deterrence
B. Fraud hotlines
C. Involuntary changes in corporate culture
D. None of the above (1 mark)

19. Several technology companies colluded to rig bids. They agreed that all the competent bidders refrain from bidding and let only one of the bidders bid. Which of the following is the crime perpetrated by the bidders?

A. Organisational crime
B. Occupational crime
C. Both occupational and organisational crime

D. None of the above (1 mark)

20. According to COSO, which of the following is NOT accurate in regard to control environment of an organisation?

A. It provides a foundation for all other controls
B. Sets the moral and ethical tone of the organisation
C. It puts all other controls into action
D. None of the above (1 mark)

21. Which of the following statements is TRUE in regard to white-collar crime?

A. In white-collar crime cases like corruption, the higher an offender’s status, the more likely the individual will not be imprisoned
B. In white-collar crime cases, the higher an offender’s status, the more likely the individual will be
convicted
C. In white-collar crime cases, the higher an offender’s status, the more likely the individual will be
acquitted
D. None of the above (1 mark)

22. The evaluation and communication of internal control deficiencies in a timely manner to those parties responsible for taking corrective action is a principle related to which component of COSO’s Internal Control-Integrated Framework?

A. Risk assessment
B. Correction activities
C. Control activities

D. None of the above (1 mark)

23. Which of the following is NOT correct in regard to a corporation’s board of directors?

A. The directors represent only the shareholders
B. The directors are generally elected by the company stakeholders
C. The directors manage business operations by assessing the strategy and underlying purpose of
management’s decisions and actions
D. The directors provide management over business operations by assessing the strategy and underlying
purpose of management’s decisions and actions (1 mark)

24. According to the 2022 Report to the Nations, which of the following is the MOST common fraud detection method?

A. Internal audit
B. External audit
C. Management review
D. None of the above (1 mark)

25. An organisation’s corporate culture is effectively evaluated by which of the following procedures?

A. Statements from the board and management in regard to their zero tolerance for fraud
B. Conducting external audits
C. Internal controls
D. None of the above (1 mark)

26. According to B. F. Skinner’s behaviourist theories, destructive workplace behaviour, such as fraud and corruption can be modified through which of the following controls?

A. Strong internal controls
B. Punishment
C. Soft controls
D. Hard internal controls (1 mark)

27. Strategy to control corporate crime that is designed to achieve conformity with the law by providing economic incentives for voluntary compliance with the law and using administrative efforts to control violations is referred to as ____________________________.

A. Deterrence
B. Prevention
C. Detection
D. None of the above (1 mark)

28. Which of the following is NOT accurate in regard to the OECD Principles of Corporate Governance?

A. Establishment of a framework to support good corporate governance practices
B. An emphasis on the importance of timely, accurate, and transparent disclosure mechanisms
C. Recognition of the importance of the role of stakeholders in corporate governance
D. None of the above (1 mark)

29. Which of the following is NOT an example of non-shareable financial need leg of the fraud triangle?

A. Debts
B. Addiction problems
C. Gambling
D. None of the above (1 mark)

30. An organisation’s ethics policy is an essential tool for fraud prevention. Which of the following is NOT correct in regard to an ethics policy?

A. Access to the policy should be communicated to all company employees
B. In developing the policy, management should consider how various members of the organisation define success
C. In developing the policy, management should consider the existing ethical tone set by employees
D. All the above (1 mark)

31. Regina, a Certified Forensic Fraud Examiner, conducted a fraud examination at ABC Corporation where Lucy is suspected of embezzlement of money. Regina later found out that Lucy is working for XYZ Corp, another client of hers. Under most of the anti-fraud and other professional bodies’ Code of Professional Ethics, what should Regina do?

A. Report the matter to the XYZ Corp Board
B. Inform XYZ Corp Management
C. Must exercise integrity by being honest with her client
D. Exercise confidentiality (1 mark)

32. All professional organisations have codes of ethics. Which of the following is NOT a purpose of the code of ethics for professional organisations?

A. Provide general solutions to professional ethical dilemmas that might not be found under general ethical principles
B. Facilitate practical enforcement and profession-wide internal discipline
C. To serve as an ethical reference and benchmark
D. All of the above (1 mark)

33. Which of the following parties has the primary responsibility for directing employees to carry out business activities and manage the expected performance?

A. Board of directors
B. Management
C. The audit and risk committee
D. None of the above (1 mark)

34. Which of the following is an element of the Fraud Triangle?

A. Social pressure
B. Greed pressure
C. Non- shareable financial pressure
D. None of the above (1 mark)

35. Effective ownership and reporting structures within an organisation are necessary to ensure which of the following principles of corporate governance?

A. Transparency
B. Accountability
C. Responsibility
D. All the above (1 mark)

36. While conducting an investigation, a forensic fraud examiner is NOT permitted to express an opinion regarding which one of the following?

A. The effectiveness of the internal control
B. Failure to comply with IFRS
C. Failure to comply with IAS
D. None of the above (1 mark)

37. The corporate governance principle that pertains to the duty of internal parties to act in the best interest of the organisation is referred to as ______________________.

A. Accountability
B. Transparency
C. Fairness

D. Responsibility (1 mark)

38. According to the 2022 Report to the Nations, which of the three major categories of occupational fraud was the MOST common?

A. Fraudulent disbursement
B. Conflict of interest
C. Embezzlement
D. None of the above (1 mark)

39. Which of the following statements is a function of Public Interest Oversight Board (PIOB)?

A. Developing best practices for corporate governance for global organisations
B. Establishing international standards for financial reporting
C. Providing oversight over the process of setting international auditing standards
D. All of the above (1 mark)

40. Which of the following procedures is NOT a best practice that an external auditor can use to obtain information for identifying the risks of material misstatement due to fraud?

A. Conduct interviews of the entity’s management only, to obtain clear and accurate views on the risks of
fraud
B. Examine any unusual or unexpected relationships identified through analytical procedures
C. Consider whether the information obtained from the risk assessment procedures indicates that fraud risk factors are present
D. None of the above (1 mark)

41. Which of the following is NOT accurate in regard to occupational fraud?

A. Most occupational offenders have past criminal records
B. Most of the occupational offenders are first offenders
C. Most of the occupational offenders do not have prior criminal records
D. None of the above (1 mark)

42. The primary responsibility for evaluating the effectiveness of the compliance program rests with _____________.

A. Internal auditor
B. Management
C. Compliance officer
D. None of the above (1 mark)

43. Which of the following is a type of preventive anti-fraud controls?

A. Continuous audit techniques
B. Fair personnel practices
C. Analytical data review
D. None of the above (1 mark)

44. Preventive anti-fraud controls include all of the following EXCEPT?

A. Independent reconciliations
B. Fraud awareness training
C. Hiring policies
D. Segregation of duties (1 mark)

45. If employees perceive a high possibility of being caught perpetrating fraud, they would be demotivated from committing fraud. Which of the following procedures would discourage employees from engaging in fraudulent and corrupt activities?

A. Fraud audits
B. Fraud awareness training
C. Code of ethics
D. All the above (1 mark)

46. Which of the following statements is ACCURATE in regard to an effective internal control system?

A. Well-designed and implemented internal control system is effective in fraud prevention
B. An effective internal control system must be well-designed, implemented and enforced
C. An effective internal control system must be well-designed, implemented and well enhanced
D. All the above (1 mark)

47. Which of the following statements is ACCURATE in regard to fraud prevention?

A. Fraud prevention is made up of procedures which in their aggregate minimise the occurrence of fraud
while maximising the detection of fraud
B. Fraud prevention is a process that provides reasonable assurance with regard to fraud prevention and
detection
C. A thorough fraud prevention control system can eliminate fraud risks

D. None of the above (1 mark)

48. Which of the following is the primary foundation for the INTOSAI professional framework for auditing in the public sector?

A. The call for supreme audit institutions to develop their own independence standards
B. The call to keep government auditors employed by the organisations that they audit
C. The call for supreme audit institutions to influence industry regulations
D. The call for legislated independence of government auditing institutions (1 mark)

49. Which of the following statements is NOT correct in regard to employees’ loyalty?

A. According to Diane Vaughan, an employee who is truly loyal to a company can perpetrate fraud on
behalf of the organisation
B. According to Diane Vaughan, an employee who is truly loyal to a company cannot perpetrate fraud on
behalf of the organisation
C. According to Diane Vaughan, an employee who is truly loyal to a company cannot perpetrate fraud
against the organisation.

D. None of the above (1 mark)

50. According to ISA 240, the auditor’s assessment of the risk of material misstatement due to fraud at the financial statement level will NOT have an effect on which of the following aspect(s) of an audit?

A. Selection of auditing procedures
B. Assignment and supervision of personnel
C. Consideration of accounting principles used
D. None of the above (1 mark)

51. Which of the following is ACCURATE in regard to the objectives of good corporate governance?

A. Enhance the accuracy and reliability of the organisation’s financial reports
B. Detect financial misstatements, whether caused by errors or fraud
C. Provide reasonable assurance regarding the organisation’s compliance with applicable laws and
regulations
D. None of the above (1 mark)

52. According to the authors of Crimes of the Middle Classes, which of the following factor is NOT accurate in regard to the rising problem of economic crime?

A. An economy with increased reliance on credit
B. The decreased opportunity for wrongdoing facilitated by advanced information technology
C. The continued pressures of a culture that rewards affluence and success
D. None of the above (1 mark)

53. Which of the factors does NOT affect employees’ ethical decisions?

A. Tension between personal standards and organisational needs
B. Industry and organisational ethical codes
C. The law and other government regulations
D. None of the above (1 mark)

54. Which of the following fraud risk is associated with inadequate oversight over management in financial reporting?

A. Low perception of detection
B. Perceived situational pressure
C. Collusion
D. Opportunity (1 mark)

55. Which of the following parties has responsibilities for assisting management in fraud risk management within an organisation?

A. Compliance officer
B. Management
C. Board of Directors

D. None of the above (1 mark)

56. According to COSO, the effectiveness of the internal control system can be evaluated by assessing whether the five components of the COSO internal control integrated framework are in place and functioning effectively, and operating together in an integrated manner. Which of the following is NOT one of the components?

A. Control environment
B. Fraud risk assessment
C. Information and communication

D. None of the above (1 mark)

57. Which of the following is NOT important for a company to consider in regard to establishment of a document retention policy?

A. Specific rules for documenting and retaining records
B. Specific requirements related to electronic documents
C. Laws and regulations regarding recordkeeping requirements

D. None of the above (1 mark)

58. Which of the following statements is NOT accurate in regard to fraud examination and integrity?

A. Fraud examination require independence of mental attitude and avoidance of conflict of interest
B. Fraud examination require subordination of desires for personal gain to the interests of clients, employers and the public
C. Fraud examination require that the examiner avoid situations where there are no professional rules
applicable to determine what is right and wrong
D. None of the above (1 mark)

59. Which of the following is NOT the IOSCO Principles for Auditor Oversight in regard to audit?

A. The oversight should be performed by a body that acts and is seen to act in the interest of the public
B. The oversight involves a regular review process designed to ascertain whether audit firms adhere to
quality control policies and procedures
C. The oversight should take place within the audit firm, by professional associates only
D. None of the above (1 mark)

60. According to The Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing, the internal audit team must NOT do which of the following exercise?

A. Evaluate the risks of fraud
B. Conduct fraud detection
C. Conduct a fraud investigation in an audit engagement
D. Evaluate the fraud risk management initiatives (1 mark)

61. Which of the following BEST describes the rationalisation leg of the fraud triangle?

A. “I deserve more compensation for the work am doing?”
B. “I need money to pay my up keep”
C. “Possibility of detection is very low or none”
D. None of the above (1 mark)

62. Which of the following BEST describes the opportunity leg of the fraud triangle?

A. “Management and the board are engaging in a conflict of interest, so it is okay for me do the same”
B. “I need money for an emergency”
C. “The board oversight is not effective, so I can get away with it”
D. “I have an emergency, I have no other way to solve the problem” (1 mark)

63. Which of the following BEST describes situational pressure due to unrealistic targets?

A. “Management and the board are taking kickbacks, so it cannot be that bad” ?
B. “I need money to pay my debts”
C. “We have not met the profit targets; we must make the figures and make the shareholders happy”
D. None of the above (1 mark)

64. Which of the following factors should an organisation NOT consider when designing the components of its compliance and ethics program?

A. The effectiveness of the internal controls
B. Law and regulatory environment
C. Culture of the organisation

D. Industry size and standards (1 mark)

65. Which of the following is NOT a principle involved in the risk assessment process as laid out by COSO?

A. Conducting ongoing monitoring of the risk management strategy
B. Assessing changes that could significantly impact the internal control system
C. Setting clear organisational objectives

D. Identifying risks of fraud (1 mark)

66. COSO identified five components that must be integrated into which of the following?

A. Compliance program
B. Ethics program
C. Anti-fraud policy

D. Internal control system (1 mark)

67. Which of the following is NOT a COSO interrelated component of a company’s internal control system?

A. Fraud risk oversight
B. Risk assessment
C. Governance and culture

D. None of the above (1 mark)

68. Which of the following element is NOT desirable for a corporate compliance program?

A. Due diligence in the hiring process
B. Appropriate incentives for compliance with the program
C. Continuous evaluation of the compliance program
D. None of the above (1 mark)

69. Which of the following control helps to mitigate the risk of rationalisation?

A. Fraud awareness training
B. Proactive audit procedures
C. Surprise audits
D. None of the above (1 mark)

70. Which of the following is NOT a proactive fraud detection activity?

A. Annual analytical review procedures
B. Regular fraud assessment questioning
C. Fraud audits
D. None of the above (1 mark)

71. Which of the following is a criteria of fraud prevention health check-up that is related to the extent to which the board of directors have taken up their responsibility for fraud?

A. Fraud risk ownership
B. Fraud risk tolerance
C. Fraud risk assessment
D. Fraud risk oversight (1 mark)

72. Which of the following is NOT a component of a comprehensive ethics program?

A. Focus on ethical leadership
B. Vision statement
C. Values statement
D. Internal control system (1 mark)

73. Which of the following is NOT a desirable component of a comprehensive ethics program?

A. A designated ethics official
B. Ethics task force or committee
C. Ethics communication and training
D. None of the above (1 mark)

74. Which of the following is NOT a responsibility for the internal auditor while conducting an audit engagement?

A. To design and make recommendations for internal controls
B. Evaluate whether management is actively retaining responsibility for oversight of the fraud risk
management program
C. Consider fraud risks in the assessment of internal control design and determination of audit steps to
perform
D. None of the above (1 mark)

75. The commission formed in 1985 with the purpose of defining the auditor’s responsibility for preventing and detecting fraudulent financial reporting is known as:

A. COSO Commission
B. Sarbanes Oxley
C. International securities Commission
D. The Treadway Commission (1 mark)

76. Which of the following is NOT good corporate governance practice?

A. Define the relationships and expectations of the parties involved
B. Provide clear lines of accountability and reporting
C. Ensure that a few individuals are capable of making all the business decisions to avoid delays
D. None of the above (1 mark)

77. Which of the following statements is NOT correct in regard to good corporate governance framework?

A. It is rigid to ensure effectiveness
B. Is appropriate for the organisation’s legal and regulatory environment
C. Takes into account the organisation’s cultural and ethical environment
D. None of the above (1 mark)

78. Which of the following statements is ACCURATE in regard to OECD Principles of Corporate Governance?

A. The OECD Principles of Corporate Governance support establishing stronger protection for foreign
shareholders than domestic shareholders
B. The OECD Principles of Corporate Governance support establishing stronger protection for domestic
shareholders than foreign shareholders
C. The OECD Principles of Corporate Governance support equitable treatment for all shareholders
D. None of the above (1 mark)

79. According to the OECD Principles of Corporate Governance, which of the following is NOT correct in regard to the corporate governance framework?

A. Ensure proportionate treatment of all shareholders, including minority and foreign shareholders
B. Encourage active cooperation between corporations and stakeholders in creating wealth and jobs
C. Ensure the timely and accurate disclosure of all material matters regarding the corporation
D. None of the above (1 mark)

80. Which of the following parties is responsible for holding the board of directors accountable for the organisation’s resources?

A. The external auditor
B. The chair of the board
C. Executive management
D. Shareholders (1 mark)

81. Which of the following is NOT a recommendation of the Treadway Commission to the audit committee to prevent financial statement fraud?

A. To have written charter for the audit committee
B. To be informed and vigilant
C. To have adequate resources and authority
D. None of the above (1 mark)

82. Which of the following party is responsible for evaluating the effectiveness of the internal controls?

A. Internal auditors
B. External auditors
C. The board of directors
D. Management (1 mark)

83. Effective corporate governance practices are desirable for any organisation. Which of the following organisation must have effective corporate governance practices?

A. A limited partnership
B. A sole proprietor enterprise
C. A company that is trading securities
D. A general partnership enterprise (1 mark)

84. Which of the following BEST describes oversight responsibilities of different parties for an organisation’s direction, operations and performance?

A. Risk management
B. Risk governance
C. Corporate compliance
D. Board of directors (1 mark)

85. Which of the following BEST describes the principle related to clarity, accuracy, completeness and timeliness of the financial statements and other information provided by management to shareholders?

A. Transparency
B. Accountability
C. Responsibility
D. None of the above (1 mark)

86. Which of the following is the MOST effective method of fraud prevention?

A. Putting hard controls in place
B. Putting strong controls in place
C. Putting preventive controls in place
D. None of the above (1 mark)

87. Which of the following statements BEST describes reengineering of controls?

A. Reengineering of controls involve enhancing the controls
B. Reengineering of controls involve enforcing the controls
C. Reengineering of controls involve compromising controls
D. None of the above (1 mark)

88. Which of the following is NOT a control environment principle of the COSO that supports the design and implementation of an effective control environment?

A. Personnel at all levels demonstrate commitment to integrity and ethical values
B. Board should assist in the design and implementation of the internal control
C. Organisation holds individuals accountable of internal controls in their respective departments
D. None of the above (1 mark)

89. Which of the following is NOT a fraud risk assessment principle of the COSO?

A. The organisation sets clear objectives to enable the detection and assessment of risks relating to the
objectives
B. The organisation identifies risks to the achievement of the objectives
C. The organisation identifies changes that would significantly impact the system of internal controls
D. None of the above (1 mark)

90. Which of the following is among the board’s responsibilities for fraud risk management?

A. Providing oversight over the design and implementation of controls to mitigate fraud risks
B. Monitoring and proactively improving the fraud risk management programme
C. Performing and regularly updating the fraud risk assessment
D. None of the above (1 mark)

91. Which of the following fraud awareness matters should NOT be covered in employee anti-fraud training?

A. An explanation of how management is going to respond to fraud allegation
B. An explanation of the company’s anti-fraud controls
C. The exact procedures management uses to detect fraud
D. None of the above (1 mark)

92. Lack of adequate oversight over management, a complex organisational structure and deficient internal control components are all examples of which type of fraud risk factor?

A. Rationalisation
B. Pressure
C. Collusion
D. None of the above (1 mark)

93. Which of the following party is responsible for fraud prevention in an organisation?

A. Management
B. Internal auditors
C. All levels of personnel
D. Board of Directors (1 mark)

94. Which of the following statements is ACCURATE according to the differential reinforcement theory?

A. Behaviour is weakened by positive stimuli
B. Behaviour is weakened when punishment is avoided
C. Behaviour is reinforced when punishment is avoided
D. None of the above (1 mark)

95. Which of the following is NOT an effective method of increasing the perception of detection?

A. Requiring strong management oversight
B. Forcing employees to take time off
C. Conducting surprise audits
D. Conducting fraud risk assessment (1 mark)

96. Which of the following is NOT a principle pertaining to the information and communication component of the COSO’s Internal Control – Integrated Framework?

A. The organisation communicates information, including objectives and responsibilities for internal control, necessary to support the functioning of internal control internally
B. The organisation puts in place control activities to enforce the other controls
C. The organisation obtains or generate, and uses relevant, quality information to support the functioning of internal control
D. None of the above (1 mark)

97. Which of the following statements is NOT accurate in regard to the role of human resource in fraud prevention?

A. HR has responsibility to assess and maintain high level of morale, which is a fraud prevention measure
B. HR has responsibility to monitor employee’s morale, through observation, survey and open-door policy
C. HR does not have a responsibility for fraud prevention
D. None of the above (1 mark)

98. Which of the following is NOT a measure that employers can put in place to mitigate fraud risks associated with employees’ frustrations?

A. Career development opportunities
B. Special events for employees
C. Support programs for, alcohol, drugs abuse
D. Training and awareness (1 mark)

99. The IOSCO Principles for Auditor Oversight, effective oversight of the auditing profession, does NOT include which of the following principles?

A. The mechanism does not require auditors to be subject to the discipline of an auditor oversight body that is independent of the audit profession
B. A mechanism to require that auditors have proper qualifications and competency
C. A mechanism to require that auditors are independent of the enterprises that they audit
D. All of the above (1 mark)

100. Which of the following statements is NOT accurate in regard to internal controls related to fraud risks?

A. A strong internal control system is effective in managing fraud risks
B. A strong internal control system is not effective in managing fraud risks
C. A strong internal control system must be integrated with positive reinforcement the controls to be
effective in managing fraud risks
D. None of the above (1 mark)

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