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?

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

Limited Time Offer

25%

Off

Get Premium CFE-Fraud-Prevention-and-Deterrence Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Lauran

4 months ago

Not sure about A, isn't fraud enough to focus on?

upvoted 0 times

...

Louvenia

4 months ago

D makes sense, public audits have different objectives than private ones.

upvoted 0 times

...

Bambi

5 months ago

Wait, C can't be right, ISA 240 applies to all audits, right?

upvoted 0 times

...

Cyndy

5 months ago

I disagree with B, they can't just walk away like that.

upvoted 0 times

...

Theron

5 months ago

A is definitely true, auditors need to watch for abuse too.

upvoted 0 times

...

Janae

5 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.

upvoted 0 times

...

Cherilyn

5 months ago

I practiced a similar question about ISA 240, and I think it does apply to public-sector audits, so C seems wrong.

upvoted 0 times

...

Pearline

6 months ago

I'm not entirely sure, but I think the auditor can only withdraw under specific circumstances, not automatically if fraud is found.

upvoted 0 times

...

Kristel

6 months ago

I remember discussing how auditors need to be aware of both fraud and abuse, so I think A might be correct.

upvoted 0 times

...

Maryann

6 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.

upvoted 0 times

...

Flo

6 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.

upvoted 0 times

...

Lauran

6 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.

upvoted 0 times

...

Nobuko

7 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.

upvoted 0 times

...

Alishia

11 months 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!

upvoted 0 times

...

Lai

11 months 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.

upvoted 0 times

Izetta

10 months ago

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

upvoted 0 times

...

Howard

11 months ago

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

upvoted 0 times

...

Yoko

11 months ago

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

upvoted 0 times

...

Hailey

11 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.

upvoted 0 times

...

Rocco

11 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.

upvoted 0 times

Desmond

11 months ago

C: It's important for the auditor to consider fraud risks in any type of audit, regardless of the sector.

upvoted 0 times

...

Shawnee

11 months ago

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

upvoted 0 times

...

Alona

11 months ago

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

upvoted 0 times

...

Britt

11 months ago

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

upvoted 0 times

...

Frederic

12 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.

upvoted 0 times

...

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.

upvoted 0 times