ACFE Exam CFE-Fraud-Prevention-and-Deterrence 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?

AIn addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.

BThe auditor has the automatic ability to withdraw from the audit engagement if fraud is found.

CThe requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement

DThe objectives of the audit are likely narrower than those of a private-sector financial statement audit.

Show Suggested Answer

Suggested Answer: A

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

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Alishia

28 days 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

29 days 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

11 days ago

A: And they have to remain alert for any potential indicators of fraud throughout the engagement.

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Howard

21 days ago

B: That's right, they have to assess the risk of fraud and plan their audit accordingly.

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Yoko

22 days ago

A: The auditor must consider the risk of fraud in the financial statement audit.

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Hailey

1 months 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 months 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

17 days 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

18 days ago

A: That's true, the objectives are definitely different compared to a private-sector audit.

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Alona

19 days ago

B: Yes, in a public-sector audit, the focus is more on compliance and accountability.

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Britt

21 days ago

A: I think you're right, option D does seem to be the most accurate.

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Frederic

2 months 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

2 months 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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