Exam CFE - Fraud Prevention topic 1 question 74 discussion

Actual exam question from ACFE's CFE - Fraud Prevention

Question #: 74
Topic #: 1

XYZ, Inc. is a specialty retailer of high-end ergonomic office furniture. The company receives a very large order from ABC Company, a new customer in a different country that wants to pay on credit. Which of the following is MOST ACCURATE regarding the due diligence procedures XYZ should perform on ABC before proceeding with this transaction?

A. XYZ does not need to take any specific procedures to verify ABC’s identity before accepting the transaction
B. XYZ only needs to undertake due diligence procedures if ABC conducts business in countries with known corruption risks
C. XYZ should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination
D. XYZ should examine ABC’s net worth as part of deciding whether to allow the purchase on credit

Show Suggested Answer

Suggested Answer: D 🗳️

by vynyfulu at April 5, 2025, 12:34 p.m.

Comments

Submit Cancel

_denw

21 hours, 28 minutes ago

Selected Answer: D

When extending credit to a new international customer, XYZ should assess financial viability, such as ABC’s net worth, to evaluate the risk of nonpayment—making D the most accurate statement.

upvoted 1 times

...