CFE – Fraud Prevention and Deterrence — Question 52

Which of the following is NOT a way that an organization’s fraud risk assessment should be incorporated into the audit process?

Answer options

• A. It should be used to increase awareness in the development of audit programs for areas that have been identified as having a moderate-to-high risk of fraud
• B. It should be used to assess whether there is a moderate-to-high risk of management override of controls within the moderate-to-high fraud risk areas
• C. It should be used to design audit tests to evaluate whether the controls are operating effectively
• D. It should be used to replace the auditor’s own identification and assessment of fraud risks

Correct answer: B

Explanation

The correct answer is B because the auditor's own identification and assessment of fraud risks is critical for effective auditing, while the other options correctly incorporate the fraud risk assessment into the audit process. Options A, C, and D all outline valid ways to enhance the auditing process using the fraud risk assessment.