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Ethics & Fraudhard18% of exam

An internal audit flags fraud red flags and Appraisal Fraud Detection. Which response best protects compliance?

Correct Answer

B) Stop processing until the inconsistency is resolved

fraud red flags require verification, documentation, and escalation before reliance. This item uses an exam-style scenario; any file details in the stem are illustrative and the governing rule controls the compliant response. The best answer is "Stop processing until the inconsistency is resolved".

Answer Options
A
Apply the rule only after a regulator requests the file.
B
Stop processing until the inconsistency is resolved
C
Treat the compliance requirement as optional because closing is near.
D
Continue processing without correcting the disclosure, licensing, compensation, or consumer-protection issue.

Why This Is the Correct Answer

fraud red flags require verification, documentation, and escalation before reliance. This item uses an exam-style scenario; any file details in the stem are illustrative and the governing rule controls the compliant response. The best answer is "Stop processing until the inconsistency is resolved".

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