CFE Exam Quiz 11

Much of the criminal research training is based on the basic premise that crimes are the product of operative conditioning and are particular forms of behavior.

A fraud prosecutor who deals on behavioral values recognizes that specific attitudes are the link between offenses.

Behavioral experiments like the ones done by Skinner show that punishment is the least effective way to change behavior. According to Skinner, punishments contribute to immediate conduct reduction, but only to constant monitoring and regulation.

In return for the desired response, positive reinforcement offers a positive stimulus.

In exchange for the correct response, a negative reinforcement withdraws a negative stimulus.

Modifying circumstances help employers to change the circumstance that might lead to unfavorable behavior.

A member of the ACFE shall not, without proper authorization, publish any confidential information collected through clinical engagement.

Another non-punitive strategy is the destruction of unwanted behavior by avoiding the expected response. This is a customized variant of the extinction strategy. Business managers pursue a plan of extinction by introducing an internal control scheme.

Board of directors could also be named the Board of Governors, the Board of Regents or the Board of Trustees based on the organization’s composition, form, and place. Elected directors could be major shareholders or employees of the company, or, apart from their position on the board, could be completely independent of the organization.

Corporations are regulated by two different boards in some nations, such as many in the European Union and Asia, having an effective two-tiered structure.

Fraud investigators could never completely eradicate fraud, but we can be more effective in detection and prevention by treating crime scientifically.

The instrumental and normative viewpoints try to explain why some follow the law, while others follow the law selectively, according to the studies carried out by Tyler.

The pros and cons in compliance with the law are measured by the people, according to an instrumental perspective. In other words, since they fear punishment due to non-compliance, they choose to obey the law.

What one finds just and good is the subject of the normative perspective When people believe enforcement is their moral responsibility, their adherence to the law, regardless of their fear of punishment, is voluntary.

The significant difference between normative and instrumental perspective is that normative focuses on the procedure on the contrary instrumental perspective puts emphasis on the outcomes.

Legitimacy is perceived to be an essential component of what empowers governments and leaders. The theory is that the people would comply with the law if the authorities have credibility

Modifying the actions of people by controlling access to valuable resources or threatening to impose sanctions is called social control.

In a democracy, the legal system can’t work if it only manipulates incentives and costs.

The majority of those who feel that they are handled fairly will support adverse decisions. Fair procedures can thus cushion the blow from a disadvantageous outcome without undermining the authority of the authorities.

The decision control (control of actual decisions taken) and the process control (control of the ability to state one’s case) are two control areas that usually concern people.

Classical criminology is rooted in the belief that humans are logical and calculating beings and therefore do things in order to escape suffering and generate gratification based on philosophical principles of utilitarianism

To adequately implement a DRP, an individual with detailed knowledge of the DRP must be accountable for the strategy to ensure that staff accepts and adopt it. That representative should be a senior employee with the ability to implement the plan.

In the examination of the financial statements, ISA 240 is intended to establish guidelines and provide instructions on the duties of the auditor throughout recognizing fraud. ISA 240 also expands the use of ISA 315 and ISA 330 standards and guidelines to address the risk of material fraud mistakes.

The administration of a company should ensure that the organization’s retention policy (DRP) is correct and efficient. In establishing a retention policy for records, it is important that the company take into account all relevant regulations on registration requirements. A policy that is specially tailored to its business practices must be developed by each company.

Risk assessment involves a risk management plan, ethical adaptation, management services to the organization’s requirements, and identification and review of operational financial and regulatory threats.

Fraudulent financial reporting involves deliberate misrepresentation of incorrect numbers or financial disclosure and deceptive recipients of financial statements. It can be driven by management efforts to manage revenues to disappoint users of financial statements by influencing their perceptions of the performance and profitability of the organization.

The following are objectives of auditors as stated in ISA 240
-Identifying and evaluating risks of material fraud failure in the financial statements
-Responding to confirmed or alleged fraud properly
-Gaining adequate evidence for the assessment of the danger calculated for information fraud errors, by appropriate responses

According to COSO, following principles pertain to information and communication

-To order to support the operation of internal control, the company obtains or utilizes appropriate quality information.
-The company shares knowledge internally, including internal control goals and roles, needed to enable internal control to work.
-Throughout issues concerning the operation of the internal control, the company approaches external parties.

According to USSC control environment guidelines include

-Promote a culture that promotes ethical behavior.
-Understanding and adequately controlled regulatory power.
-Overall program accountability was delegated to high-level personnel.
-Incentives to encourage correct behavior and to discourage misbehavior

The Supervisory Board, headed by the Chairman, is comprised only of independent executives. This executes the monitoring role and monitors administrative and corporate policy implementation. Both boards frequently work together to develop a management plan