CFE – Investigation — Question 18

Which of the following statements about fraud response plans is FALSE?

Answer options

• A. A fraud response plan must be simple to understand and administer.
• B. A fraud response plan should specify how every fraud examination should be conducted regardless of the type of fraud.
• C. A fraud response plan outlines the actions an organization will take when suspicious of fraud have arisen.
• D. A fraud response plan should create an environment to minimize risk and maximize the potential for success.

Correct answer: C

Explanation

Option C is incorrect because a fraud response plan does not outline actions for every instance of suspicion; rather, it provides guidance for responding to confirmed incidents of fraud. The other options correctly describe the characteristics and purposes of a fraud response plan, emphasizing simplicity, specificity, and risk management.