ACFE Certified Fraud Examiner - Fraud Schemes and Financial Crimes CFE-Fraud-Schemes-and-Financial-Crimes Exam Questions

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Total 352 questions
Question 1

Depreciation is especially applicable when companies try to overvalue their assets and net worth; the lower their depreciation expense, the higher the company's profits.



Answer : A

Rationale for Correct Answer:

This is True. Fraudulent financial reporting often involves manipulating depreciation. By lowering or delaying depreciation expense, companies can inflate profits and overstate asset values. This is a common method of financial statement fraud related to earnings management.

Analysis of Incorrect Options:

B . False -- Incorrect, as understatement of depreciation clearly inflates reported profits.

Key Concept:

Depreciation Manipulation in Financial Statement Fraud.


ACFE Fraud Examiners Manual (2020 International Edition), Financial Statement Fraud --- Overstating Assets and Income.

Question 2

Asset misappropriation schemes were the ''middle children'' of the study; they were more common than fraudulent statements and more costly than corruption.



Answer : B

Rationale for Correct Answer:

This statement is False. According to ACFE studies, asset misappropriation is the most common but least costly category of occupational fraud. Fraudulent statements are the least common but most costly, while corruption falls in the middle in both frequency and cost.

Key Concept:

Fraud Tree Statistics --- frequency and cost comparison of asset misappropriation, corruption, and financial statement fraud.


ACFE Fraud Examiners Manual (2020 International Edition), Fraud Tree --- Comparative Analysis of Fraud Categories.

Question 3

Guillermo has received a grant to study the effectiveness of school lunch programs on students' mental health. Guillermo's results are inconclusive, causing him to be concerned that he will lose funding for his project. As a result, Guillermo creates some data points that support his research and show that he is making progress. Guillermo's actions can BEST be described as:



Answer : A

Guillermo's conduct is best described as research misconduct because he fabricated data points to make his research appear more successful and to preserve grant funding. Research misconduct commonly includes fabrication, falsification, or plagiarism in proposing, performing, reviewing, or reporting research. The key fact is that Guillermo created data that did not exist and presented it as research support. Fraudulent concealment generally involves hiding material facts, not creating false research data. Fictitious claims fraud involves submitting false claims for payment, usually to a government or program, but the question focuses on the falsification of research results. Inducement fraud is broader and less precise. Because the false data directly affects the integrity of a funded study, research misconduct is the best answer.

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Question 4

In what type of fraud scheme does an employee steal cash after it has appeared on the company's books?



Answer : A

Rationale for Correct Answer: Cash larceny is the theft of cash after it has been

Analysis of Incorrect Options:

B & D -- Both describe forms of skimming (unrecorded or understated sales).

C -- Kickback scheme is corruption, not cash theft.

Key Concept: Distinguishing cash larceny (on-book theft) from skimming (off-book theft).


Question 5

Which of the following would be MOST INDICATIVE of loan fraud in a draw request submitted by a construction developer?



Answer : C

Rationale for Correct Answer: A draw request is used by construction developers to

Analysis of Incorrect Options:

A -- Omission of personal account statements isn't unusual for a draw request.

B -- Change orders are common in construction projects.

D -- Multiple inspection reports support validity, not fraud.

Key Concept: Loan fraud detection through supporting documentation review.


Question 6

Which of the following measures would be MOST EFFECTIVE in preventing a skimming scheme?



Answer : B

The correct answer is B. Skimming involves stealing cash before it is recorded in the organization's accounting system. Separating the duties of collecting cash and accessing or posting to the accounts receivable journal is an effective preventive control because it prevents one employee from both taking funds and manipulating records to conceal the theft. Job rotation can help, but it is less direct. Comparing sales records to cash received and reviewing deposit timing are more detective than preventive in nature. The strongest control is segregation of duties between custody of cash and recordkeeping authority. The ACFE cash receipts materials emphasize receipt-level controls, general controls, and separation of duties as primary measures for preventing skimming schemes.

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Question 7

A fraudster poses as ABC Organization's chief executive officer (CEO) and sends an email to an employee requesting that company funds be transferred to an account that the fraudster owns. This is an example of which of the following types of fraud schemes?



Answer : D

Rationale for Correct Answer: This scheme is a business email compromise (BEC),

Analysis of Incorrect Options:

A . Reverse social engineering -- Involves the fraudster posing as a helper and then exploiting the victim, not impersonating executives.

B . Executive email attack -- A generic term, but the ACFE recognizes BEC as the precise classification.

C . Electronic piggybacking -- Refers to unauthorized access through another user's session, not impersonation.

Key Concept: Social engineering and cyber-enabled fraud -- BEC schemes.


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Total 352 questions