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ACFE CFE-Fraud-Prevention-and-Deterrence Exam - Topic 3 Question 106 Discussion

A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI). Which of the following is TRUE regarding the auditor's consideration of fraud during this engagement?
A) In addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.
B) The auditor has the automatic ability to withdraw from the audit engagement if fraud is found.
C) The requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement
D) The objectives of the audit are likely narrower than those of a private-sector financial statement audit.

ACFE CFE-Fraud-Prevention-and-Deterrence Exam - Topic 3 Question 106 Discussion

Actual exam question for ACFE's CFE-Fraud-Prevention-and-Deterrence exam
Question #: 106
Topic #: 3
[All CFE-Fraud-Prevention-and-Deterrence Questions]

A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI). Which of the following is TRUE regarding the auditor's consideration of fraud during this engagement?

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Suggested Answer: A

by Pearly at Apr 08, 2025, 08:38 PM

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Lauran
6 months ago
Not sure about A, isn't fraud enough to focus on?
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Louvenia
6 months ago
D makes sense, public audits have different objectives than private ones.
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Bambi
6 months ago
Wait, C can't be right, ISA 240 applies to all audits, right?
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Cyndy
6 months ago
I disagree with B, they can't just walk away like that.
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Theron
6 months ago
A is definitely true, auditors need to watch for abuse too.
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Janae
7 months ago
I feel like the objectives for public-sector audits are broader, not narrower, compared to private-sector ones, which makes me lean towards D being incorrect.
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Cherilyn
7 months ago
I practiced a similar question about ISA 240, and I think it does apply to public-sector audits, so C seems wrong.
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Pearline
7 months ago
I'm not entirely sure, but I think the auditor can only withdraw under specific circumstances, not automatically if fraud is found.
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Kristel
7 months ago
I remember discussing how auditors need to be aware of both fraud and abuse, so I think A might be correct.
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Maryann
8 months ago
Ah, this is a good one. The ISSAI standards are important, but I also need to remember that ISA 240 on fraud still applies. I'll make sure to consider both sets of requirements.
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Flo
8 months ago
The key here is understanding the differences between public-sector and private-sector audits. I believe the objectives are typically narrower in the public sector, so I'll focus on that angle in my response.
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Lauran
8 months ago
Okay, I know the ISSAI standards apply to public-sector audits, but I'm a bit fuzzy on how they differ from private-sector audits in terms of fraud considerations. I'll need to re-read the question closely.
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Nobuko
8 months ago
Hmm, this question seems straightforward. I'll need to carefully review the ISSAI standards and ISA 240 to determine the auditor's responsibilities regarding fraud in a public-sector audit.
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Alishia
1 year ago
Hmm, I'd have to go with A. Gotta keep an eye out for both fraud and abuse - can't let the government bureaucrats get away with anything!
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Lai
1 year ago
C is definitely wrong. The ISA standards absolutely apply to public-sector audits as well. These auditors aren't operating in a vacuum, you know.
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Izetta
12 months ago
A: And they have to remain alert for any potential indicators of fraud throughout the engagement.
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Howard
1 year ago
B: That's right, they have to assess the risk of fraud and plan their audit accordingly.
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Yoko
1 year ago
A: The auditor must consider the risk of fraud in the financial statement audit.
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Hailey
1 year ago
B is a bit too extreme. The auditor can't just withdraw from the engagement if fraud is found - that would be irresponsible. They need to follow the proper procedures and reporting requirements.
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Rocco
1 year ago
D seems like the right answer to me. The objectives of a public-sector audit are likely narrower than a private-sector audit, as the focus is on compliance and accountability rather than just the financial statements.
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Desmond
1 year ago
C: It's important for the auditor to consider fraud risks in any type of audit, regardless of the sector.
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Shawnee
1 year ago
A: That's true, the objectives are definitely different compared to a private-sector audit.
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Alona
1 year ago
B: Yes, in a public-sector audit, the focus is more on compliance and accountability.
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Britt
1 year ago
A: I think you're right, option D does seem to be the most accurate.
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Frederic
1 year ago
I believe the objectives of the audit may be narrower compared to a private-sector audit, so the auditor should focus on specific areas related to the public-sector entity.
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Catarina
1 year ago
I think the correct answer is A. The auditor should be alert to both fraud and abuse during a public-sector audit. Fraud and abuse are both critical issues in government entities.
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Selma
12 months ago
Fraud and abuse can have serious consequences in government organizations, so the auditor must be thorough in their examination.
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Sarah
1 year ago
The auditor must maintain professional skepticism and be aware of the possibility of fraud.
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Angelyn
1 year ago
It's important for the auditor to consider the risk of fraud in a public-sector entity.
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Enola
1 year ago
Yes, you are correct. The auditor should be vigilant for both fraud and abuse.
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Flo
1 year ago
I agree with you, Aliza. It's important to be vigilant for both fraud and abuse during the audit.
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Aliza
1 year ago
I think the auditor should also consider potential abuse, not just fraud.
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