CFE – Fraud Prevention and Deterrence — Question 76

The internal auditor’s fraud-related responsibilities include which of the following?

Answer options

• A. Overseeing management’s actions to manage fraud risks
• B. Obtaining reasonable assurance that the organization’s financial statements are free of material misstatements caused by fraud
• C. Evaluating indicators of fraud and deciding whether any further action is necessary or whether an investigation should be recommended
• D. Establishing and maintaining effective anti-fraud controls at a reasonable cost

Correct answer: D

Explanation

The correct answer, D, highlights the internal auditor's role in establishing effective anti-fraud controls, which is crucial for mitigating fraud risks. While options A, B, and C describe important aspects of fraud management, they do not specifically pertain to the establishment and maintenance of controls, which is the primary responsibility of the internal auditor.