Exam CFE - Fraud Prevention topic 1 question 110 discussion

The correct answer is B. Understanding how internal and external audit strategies address fraud risk. Here’s why: - The audit committee’s role is primarily oversight, not execution. They are responsible for monitoring and understanding how fraud risks are being addressed by both internal and external auditors. - Implementation and design of the fraud risk management program typically fall under management’s responsibilities, not the audit committee’s. - As for punishing fraud perpetrators, that’s a legal or HR function, not a core duty of the audit committee. In short, the audit committee ensures that fraud risk is being properly considered and addressed within the organization’s audit strategies, but they don’t directly carry out or enforce those actions.