CFE Exam Review Course

Multiple Choice Question

Tips & Techniques

®2013 Association of Certified Fraud Examiners, Inc.

© 2020 Association of Certified Fraud Examiners, Inc.
 Some Practical Advice (1/2)
➢ Use a structured approach while studying for exam e.g. study
module by module
➢ Look for keywords that you expect to be in the correct answer
➢ By discarding answers that are ‘obviously’ wrong, you might
reduce your choice to 1 out of 2 instead of 4
➢ In combinations of answers, decide which element(s) MUST
be represented, can then reduce choice to 1 out of 2 i.s.o. 4
➢ Understand the concepts, the principles so as to be able to
apply them to specific situations
➢ Test yourself under ‘real’ conditions, i.e. limited time, no
consulting of support material
➢ If you cannot decide on an answer, move on, later question(s)
might help you to go back and answer correctly after all!
© 2020 Association of Certified Fraud Examiners, Inc. 2
 Some Practical Advice (2/2)
➢ Keep in mind while studying that practice questions are good
for practice but they do not cover every topic!
➢ Don’t memorize the answers of the practice questions, instead
see the logic behind each questions’ options, even the wrong
options to see why they are wrong
➢ Stay calm, read the whole question, beware when it contains
LEAST, MOST, NOT, BEST, EXCEPT, INCORRECT,
INEFFECTIVE, TRUE, FALSE as a choice between ostensibly
CORRECT answers!
➢ For long statements, read answers first, it helps to concentrate
on really necessary details
➢ Finally, devise a clear cut revision plan about 4 days before
exam reviewing each chapter from the books and (re-)doing the
practice questions you marked previously
© 2020 Association of Certified Fraud Examiners, Inc. 3
 Auditing vs. Fraud Examination
• Timing: Recurring vs. Non-recurring
• Scope: General vs. Specific
• Objective: Opinion vs. Determine responsibility
• Relationship: Non-adversarial vs. Adversarial
• Methodology: Audit techniques vs. Fraud
examination techniques
• Presumption: Professional scepticism vs. Proof

© 2020 Association of Certified Fraud Examiners, Inc. 4

Also https://www.deepl.com/translator http://www.linguee.fr/

© 2020 Association of Certified Fraud Examiners, Inc. 5

 COSO Internal Control - Integrated Framework
2013 Update

Environments changes... …have driven Framework updates

Expectations for governance oversight

Globalization of markets and operations

Changes and greater complexity in business

Demands and complexities in laws, rules,

regulations, and standards

Expectations for competencies and

accountabilities

Use of, and reliance on, evolving technologies

Expectations relating to preventing and

detecting fraud
COSO Cube (2013 Edition)

© 2020 Association of Certified Fraud Examiners, Inc.

6
COSO 2013 Update
Update articulates principles of effective internal control

Control Environment 1. Demonstrates commitment to integrity and ethical values

2. Exercises oversight responsibility
3. Establishes structure, authority and responsibility
4. Demonstrates commitment to competence
5. Enforces accountability
6. Specifies suitable objectives
Risk Assessment 7. Identifies and analyzes risk
8. Assesses fraud risk
9. Identifies and analyzes significant change

Control Activities 10. Selects and develops control activities

11. Selects and develops general controls over technology
12. Deploys through policies and procedures

Information & 13. Uses relevant information

Communication 14. Communicates internally
15. Communicates externally

Monitoring Activities 16. Conducts ongoing and/or separate evaluations

17. Evaluates and communicates deficiencies

7
© 2020 Association of Certified Fraud Examiners, Inc.
 COSO Enterprise Risk Management
– Integrated Framework 2004
Enterprise Risk Management:
New
• Is a process
• Is effected by people
• Is applied in strategy setting
• Is applied across the enterprise
• Is designed to identify potential
events
• Manages risks with risk appetite
• Provides reasonable assurance
• Supports achievement of
objectives

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© 2020 Association of Certified Fraud Examiners, Inc.
 Updated ERM IC 2017
Updated ERM IC 2017
✓ Adopts a components and principles structure
✓ Adopts a components and principles structure
✓ Simplifies the definition of enterprise risk management
✓ Simplifies the definition of enterprise risk management
✓ Emphasizes the relationship between risk and value
✓ Emphasizes the relationship between risk and value
✓ Renews the focus on the integration of enterprise risk management
✓ Renews the focus on the integration of enterprise risk management
✓ Examines the role of culture
✓ Examines the role of culture
✓ Elevates discussion of strategy
✓ Elevates discussion of strategy
✓ Enhances the alignment between performance and enterprise risk management
✓ Enhances the alignment between performance and enterprise risk
✓ Links enterprise risk management into decision-making more explicitly
management
✓ enterprise
✓ Links Delineates between enterprise into
risk management risk management and internal
decision-making control
more explicitly
✓ Delineates between✓enterprise
Refines risk
riskappetite and tolerance
management and internal control
✓ Refines risk appetite and tolerance

© 2020 Association of Certified Fraud Examiners, Inc. 9

 COSO ERM IC 2017

© 2020 Association of Certified Fraud Examiners, Inc. 10

ISO 31000 Risk management – Framework

ISO 31000:2018

(ISO 31004:2013
& ISO 31010:2009
plus Guide 73)

© 2020 Association of Certified Fraud Examiners, Inc.

ISO 31000 Risk management – Principles (clause 4)

Risk =
the effect of
uncertainty
on
objectives

No entity-level compliance
certification available but e.g.
C31000, AT31000, CT31000
for professionals

© 2020 Association of Certified Fraud Examiners, Inc.

 Risk
management
— Process

NB compare with
COSO ERM!
http://www.youtube.com/wa
tch?v=eS2T8IVd7io

http://www.linkedin.com/company/g31000

© 2020 Association of Certified Fraud Examiners, Inc.

 See also See also
ISO 31004 ISO 31010
Guidance Risk
for the assessment
Implement- techniques
ation of (31 in all,
ISO 31000 but only a
selection!)

14
© 2020 Association of Certified Fraud Examiners, Inc.
 The Truth
“F or a German and a F inn,
the truth is the truth.
I n Japan and Great Britain everything is O.K.,
as long as nothing is disturbed in the process.
See also I n China, See also
ISO 31004 ISO 31010
there is no such thing as absolute truth.Risk
Guidance
for the assessment
Implement- techniques
ation of I n I taly, (31 in all,
but only a
ISO 31000
it is open to negotiation.” selection!)

“When Cultures Collide”, Richard D. Lewis

© 2020 Association of Certified Fraud Examiners, Inc. 15
 See also See also
ISO 31004 ISO 31010
Guidance Risk
for the assessment
Implement- techniques
ation of (31 in all,
ISO 31000 but only a
selection!)

16

© 2020 Association of Certified Fraud Examiners, Inc.