CFE – Fraud Prevention and Deterrence — Question 78

In identifying the inherent fraud risks that could apply to the organization, the fraud risk assessment team should discuss:

Answer options

• A. The organization's incentive programs
• B. The possibility of management’s override of controls
• C. Risks to the organization’s reputation
• D. All of the above

Correct answer: B

Explanation

The correct answer is B because the possibility of management overriding controls is a critical fraud risk that can lead to significant issues. Options A and C, while important, do not directly highlight the unique risk posed by management's ability to bypass established controls, making B the most specific and relevant choice.