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

Question 1

John, a fraud investigator, is interviewing Mary, who he suspects has been embezzling company funds. Which of the following is the recommended approach John should use to ask Mary questions?

AStart with questions about unknown information and work toward known information

BAsk questions in random order to keep Mary from guessing the next question

CStart with specific questions and move toward general questions

DSeek general information before seeking specific details

Answer : D

The recommended questioning order is:

''As a general rule, questioning should proceed from the general to the specific; that is, it is best to seek general information before seeking details''.

This ensures the respondent provides a free narrative before narrowing down to specifics.

Question 2

Which of the following is a recommended strategy when conducting admission-seeking interviews?

AIncrease sympathy while downplaying implications of wrongdoing.

BEnsure that accusations are made in the presence of a third party to avoid potential liability

CEmphasize a lack of morality in the subject's actions to induce them into confessing.

DUse time constraints as a means to pressure the subject into making a confession.

Answer : A

''The interviewer must not express disgust, outrage, or moral condemnation... the basic logic of obtaining confessions can be summed up as maximize sympathy and minimize the perception of moral wrongdoing''.

Sympathy creates an environment conducive to confession, while other options (third-party presence, emphasizing immorality, or pressuring with time) are explicitly discouraged.

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

Ella is convicted of a crime, but instead of serving time in jail, her sentence is suspended for a year in exchange for a promise of good behavior and being placed under supervision within the community. Which of the following best describes Ella's sentence?

ADeterminate sentence

BProbation

CDeferred prosecution agreement

DIndeterminate sentence

Answer : B

The best answer is B. Probation. In the CFE Law section on criminal justice, probation is identified as one of the sanctions that a court may impose after a defendant has been found guilty of a crime. The facts in this question match probation because Ella has already been convicted, but instead of immediately serving jail time, she remains in the community under supervision and must maintain good behavior. That is the classic structure of probation: a convicted offender is allowed to remain in the community, subject to conditions and oversight, rather than being incarcerated.

The other options do not fit as well. A deferred prosecution agreement generally concerns prosecutors agreeing to suspend or avoid prosecution---often in the corporate context---if specified conditions are met, so it applies before final conviction and is not the same as post-conviction community supervision. A determinate sentence refers to a fixed term of incarceration, while an indeterminate sentence involves a range rather than a fixed duration. Neither term specifically describes supervised release in the community in lieu of jail. Because Ella's punishment is a suspended custodial consequence combined with supervision and a requirement of good conduct, probation is the most accurate choice.

Question 5

All of the following are common legal defenses for tax evasion EXCEPT:

AMental illness of the taxpayer

BDeath of the taxpayer

CThe taxpayer s reliance on an attorney or accountant

DThe actions were tax avoidance not tax evasion

Answer : B

This question tests your knowledge of Domain 6.

In the context of Tax Fraud, specifically relating to tax avoidance, tax evasion, the question asks about EXCEPT.

The correct answer is B: Death of the taxpayer.

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

- tax evasion

- Fraud Examiners Manual, Law Section

Question 6

Llewellyn is testifying as an expert witness and is being cross-examined by an opposing party's attorney. The attorney questions Llewellyn's professionalism and the veracity of their report, suggesting that Llewellyn was directed to a particular conclusion by the party that hired them. Which of the following options BEST describes the questioning party's method?

ABias.

BContradiction.

CMyopic vision.

DSounding board.

Answer : A

The attorney is using a bias attack. In cross-examination, opposing counsel might try to show that an expert witness's work, report, or opinion is not independent, but instead was influenced by the party that hired or paid the expert. Suggesting that Llewellyn was directed to reach a particular conclusion attacks impartiality and implies that the testimony was purchased or shaped to favor the hiring party. Contradiction focuses on inconsistent statements or conflicts with prior testimony or documents. Myopic vision focuses on excessive attention to one area while ignoring another. A sounding board technique attempts to use the witness to support the opposing side's theory. Because the question attacks Llewellyn's neutrality, answer A is correct.

Question 7

Andrew wants to use a confidential informant in his investigation. He plans to compensate the informant with cash and obtain a receipt. He also plans to identify his source in a memorandum and his final report using only the informant's initials. Which of Andrew's plans is NOT considered a best practice when using an informant?

AReferring to the informant in the memorandum using the informant's initials

BUsing information from the informant in his final report

CCreating a receipt regarding the cash payment

DCompensating the informant with cash

Answer : A

Referring to the informant in the memorandum using the informant's initials

Best practice requires that informants be identified only by symbols (e.g., I-1, I-2), not by initials, to protect their identity. Cash payments are acceptable but must be accompanied by a receipt.

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