ACFE CFE-Fraud-Investigations-and-Legal-Issues Exam Questions Instant Access

Question 1

Which of the following is a reason why a subject's credit card records and statements can be useful in tracing investigations?

ACredit card records can provide leads to help identify a subjects hidden assets

BCredit card records can show signs that the subject has skimmed funds.

CCredit card statements show the source of the funds used to pay a credit card bill.

DCredit card statements provide insight into the subject's litigation history

Answer : A

According to the Fraud Examiners Manual:

''Credit card records are important in tracing assets... information on credit card charges might provide leads to identifying hidden assets. For example, if a fraud examiner notices that the subject used his credit card to purchase items at a marina, the fraud examiner should investigate further to determine if the subject owns a boat''.

Therefore, A is correct.

Question 2

John deliberately understated his income so that he could pay a lesser amount on his tax bill. This is an example of tax avoidance.

ATrue

BFalse

Answer : B

This question tests your knowledge of Domain 6.

In the context of Tax Fraud, specifically relating to tax avoidance, the question asks about the core concepts in this area.

The correct answer is B: False.

This question focuses on tax fraud concepts. The correct answer distinguishes between legal tax avoidance and illegal tax evasion, or identifies specific tax evasion schemes. Tax fraud investigations require specialized knowledge of tax laws and common evasion techniques.

- CFE Exam Content Outline: Domain 6: Tax Fraud

- tax avoidance

- Fraud Examiners Manual, Law Section

Question 3

Which of the following statements regarding civil lawsuits in most jurisdictions is CORRECT?

AThe plaintiffs initial filing does not typically need to contain a summary of the evidence

BCivil lawsuits begin with the filing of a pleading, usually in the jurisdiction in which the defendant resides or where the claim arose

CThe plaintiff's initial filing with the court does not typically need to include the specific facts on which the claim relies.

DAll of the above are correct

Answer : B

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to civil, the question asks about civil lawsuits in most jurisdictions is CORRECT, CORRECT.

The correct answer is B: Civil lawsuits begin with the filing of a pleading, usually in the jurisdiction in which the defendant resides or where the claim arose.

This question relates to the legal system framework. Understanding the distinction between different legal systems and processes is crucial for fraud examiners. The correct answer accurately describes the relationship between different legal entities and their jurisdictions.

- CFE Exam Content Outline: Domain 1: Overview of the Legal System

- civil

- Fraud Examiners Manual, Law Section

Question 4

Which of the following is MOST LIKELY to affect the rights that an employee may have during an internal investigation?

AThe likelihood that the case will eventually go to trial.

BThe existence of a collective bargaining agreement.

CThe amount of evidence that the employer possesses.

DThe length of the employee's tenure at the organization.

Answer : B

This question tests your knowledge of Domain 7.

In the context of Individual Rights During Examinations, specifically relating to employee, the question asks about MOST LIKELY.

The correct answer is B: The existence of a collective bargaining agreement..

This question relates to individual rights during examinations. The correct answer accurately describes the legal protections, obligations, or privacy considerations that apply in workplace investigations. Fraud examiners must balance investigative needs with legal protections for individuals.

- CFE Exam Content Outline: Domain 7: Individual Rights During Examinations

- employee

- Fraud Examiners Manual, Law Section

Question 5

Al needs to know the location of the principal office and the initial shareholders of a company he is investigating. Which of the following would be the BEST source of this reformation?

AThe organizational filings with the government of the jurisdiction in which the company is incorporated

BThe contractual documents regarding real properly owned by the corporation

CThe utility records in the municipality where the corporation has its principal office

DThe shareholder data form filed with the World Bank

Answer : A

The organizational filings with the government of the jurisdiction in which the company is incorporated

Organizational filings (e.g., articles of incorporation) are generally public records and include ownership information, initial shareholders, and the location of the principal office.

Question 6

Jason is an investigator who is conducting an interview with Dina. a fraud suspect. After introducing himself. Jason attempts to be amiable by asking about Dina's favorite sports team and complimenting her eyeglass frames. Jason is attempting to:

AEstablish the interview theme.

BEstablish rapport.

CCalibrate the witness.

DExhibit passive listening

Answer : B

''Introductory questions should be designed to establish rapport... Interviewers usually establish rapport by spending a few minutes with the respondent in an informal dialogue''.

Jason's small talk about sports and compliments is clearly rapport building

Question 7

Which of the following is NOT a recommended strategy when conducting admission-seeking interviews?

AConduct admission-seeking interviews only when time is not a factor.

BEnsure that accusations are made under conditions of privacy to avoid potential liability

CMinimize empathy while emphasizing the perception of moral wrongdoing

DPresent a morally acceptable reason for the subject's behavior

Answer : C

Best practices for admission-seeking interviews emphasize building rapport, presenting a morally acceptable reason, and maintaining empathy to encourage a confession. The manual states examiners should ''present a morally acceptable reason for the suspect's behavior'' and avoid creating hostility . Minimizing empathy is counterproductive and not recommended.

ACFE Certified Fraud Examiner (CFE) - Fraud Investigations and Legal Issues CFE-Fraud-Investigations-and-Legal-Issues Exam Questions