CFE Investigation Exam Questions And
Answers
Undercover covert operations often use disguise and deceit to obtain evidence directly from
people involved in the offense, whereas surveillance operations use the skill of observation to
gather information about individuals' activity. - ANS True
Which of the following is the most accurate statement regarding what fraud examiners should
do when collecting information from social media sites? - ANS The information from social
networking sites should be preserved so that it can be established as authentic if used in court.
Which of the following statements about how fraud examiners should approach fraud
examinations is CORRECT? - ANS Fraud examinations should begin with general
information that is known, starting at the periphery, and then move to the more specific details
Two people are having a conversation in a public park, but they are not near any other people.
Sandy, a private investigator in the United States, hid an audio recorder nearby without their
knowledge and captures the conversation. Sandy's action is likely prohibited by law. - ANS
true
Which of the following is the most accurate description of the net-worth (or comparative
net-worth) method of analysis? - ANS The net-worth method is an indirect method of
proving illicit income circumstantially by showing that a person's assets or expenditures for a
given period exceed that which can be accounted for from known or admitted legitimate sources
of income.
Alex, a fraud examiner, receives an anonymous call from someone who claims to have
information regarding a fraud at Alex's company. The whistleblower says he will only provide the
information if he is given unqualified confidentiality. Alex says he cannot make that promise.
Was Alex's statement prudent under the circumstances? - ANS Yes, because Alex may
attempt to protect the whistleblower's confidentiality, but cannot guarantee it.
When making a direct accusation in an admission-seeking interview, it is usually best to use
strong words such as steal, fraud, or crime to reinforce the seriousness of the crime to the
suspect. - ANS false
Which of the following U.S. laws governs the dissemination of an individual's credit information
to third parties by consumer reporting agencies? - ANS The Fair Credit Reporting Act
,___________ refers to an instance when law enforcement officers or government agents induce
a person to commit a crime that he is not previously disposed to commit. - ANS
Entrapment
Which of the following is the facilitator of communication that refers to an individual's need for
the esteem of others? - ANS Recognition
In interviews, introductory questions are designed to meet which of the following objectives? -
ANS To provide the introduction, To establish rapport, To establish the interview theme
Which of the following is an example of a data analysis function that can be performed to detect
fraud through an examination of the general ledger? - ANS Create actual-to-budget
comparison reports, Calculate financial ratios, Analyze and confirm specific ledger accounts for
legitimate transaction activity
Freddie calls Alex's bank, claiming to be Alex. Freddie tells the bank representative that he
needs to make sure the bank has the correct government identification number on his account
because he had noticed an error on his statement. The bank representative refuses to give the
number, and Freddie hangs up. Assuming Freddie resides in the United States, which of the
following crimes did he commit? - ANS Pretexting with a financial institution
Nathan, a Certified Fraud Examiner, has obtained an oral confession from Gabriel, a fraud
suspect. Nathan wants to probe Gabriel for additional details. Which of the following is the most
appropriate question Nathan should ask Gabriel to find out if there are any remaining proceeds
that can be used to reduce losses? - ANS "What do you have left?"
Which of the following is a limitation of Benford's Law? - ANS Benford's Law cannot be
applied to data sets with non-natural numbers, such as check or invoice numbers.
Bianca, a fraud examiner for the Levine Corporation, a U.S. corporation, suspects that an
employee of another U.S. company has committed a fraud scheme against Levine Corporation.
Although Bianca has not obtained the suspect employee's consent to access his personal credit
report, she may access the report based on an exception set out in the U.S. Fair Credit
Reporting Act. - ANS False
A fraud examiner is conducting textual analytics on journal entry data and runs a keyword
search using the terms override, write off, and reserve/provision. With which leg of the Fraud
Triangle are these fraud keywords typically associated? - ANS Opportunity
In data analysis, date fields are generally not a problem when importing and exporting data
because standard formats are always used. - ANS False
, Understanding the structure and availability of existing data during a data analysis engagement
helps to ensure that the fraud examiner can build workable tests to run on it. - ANS true
Which of the following pieces of information about financed personal property can be obtained
through a Uniform Commercial Code (UCC) filings search? - ANS The name of the debtor
or joint debtors, The type of collateral pledged as security, The name of the financial lender
Which of the following is NOT a piece of information contained on most wire transfers? - ANS
The recipient's government identification number
Gamma, a Certified Fraud Examiner, is attempting to locate the exact birthplace of Theta, a
fraud suspect who was born and resides in Delaware. Where is Gamma most likely to find such
a record, if it exists? - ANS Delaware's bureau of vital statistics
By examining the probate records of a deceased individual, a fraud examiner can discover: -
ANS The names of individuals with an interest in the deceased's estate, The manner in
which the deceased's assets will be dispersed, An indication of the value of the property willed
to the deceased's heirs
Which of the following is NOT a purpose of the follow-up/recommendations section of a written
fraud examination report? - ANS To calculate the amount of loss caused by any
misconduct identified during the investigation
Which of the following is NOT considered good practice when selecting the participants on a
team assembled to investigate fraud? - ANS Select team members who possess a vested
personal or corporate interest in the matter.
The goal of establishing an interview theme should be to: - ANS Get the respondent to
make a commitment to assist before commencing serious questioning.
Which of the following is an example of a data analysis function that can be performed to help
detect fraud through examination of asset accounts? - ANS Recalculate expense and
reserve amounts using replacement costs, Select samples for asset existence verification,
Compare book and tax depreciation and indicate variances
Jeff, an employee at a retail store, is accused of skimming money from the register. During an
admission-seeking interview with Jeff, the investigator states: "This is a huge corporation with
more than a hundred stores, so it's not like a few dollars here and there is going to affect
anyone personally. Is that how you saw it?" This technique is known as: - ANS
Depersonalizing the victim
Which of the following is a purpose of closing questions in interview situations? - ANS To
maintain goodwill, To obtain additional facts, To reconfirm facts
