Baker, a Certified Fraud Examiner (CFE). is assigned to the internal audit department of the ABC Company. He is getting ready to conduct an interview with another company employee who might be involved in a fraud. In general, what title should Baker use in his introduction to the employee?
Answer : C
When introducing themselves, fraud examiners should avoid titles like investigator or Certified Fraud Examiner that might raise suspicion or defensiveness. The Manual recommends using neutral titles such as auditor because it is less threatening and more acceptable in an organizational setting.
Question 2
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?
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.
Question 3
Which of the following is the MOST ACCURATE statement regarding a fraud examiner's ability to trace cryptocurrency transactions?
Answer : A
The Fraud Examiners Manual explains:
''Each transaction on a blockchain ledger is recorded with a cryptographic address... by analyzing these addresses, fraud examiners can sometimes establish patterns and connections that identify users or link them to criminal activity''.
Question 4
Cynthia is preparing to conduct a covert investigation. Prior to conducting surveillance of her subject, she creates a memorandum outlining the basis for her operation Which of the following pieces of information should she include in her memorandum?
Answer : A
Before conducting surveillance, a memorandum should document the basis for the covert operation, including: (1) the information the operation is based on, (2) expected information to be gained, (3) identities of suspects (subjects) if known, and (4) operatives under the examiner's control. Confidential sources should not be identified by name but referred to symbolically.
Question 5
Which of the following data analysis functions is used to determine whether company policies are met by employee transactions, such as verifying that traveling employees book their accommodations at approved hotels?
Answer : D
The Fraud Examiners Manual defines compliance verification as:
''Compliance verification determines whether company policies are met by employee transactions. For example, when employees are out of town, do they adhere to the company policy of not spending more than $30 a day for meals?'' .
Thus, the correct function is compliance verification.
Question 6
Christopher, a fraud examiner, is conducting an admission-seeking interview with Jennifer, an employee suspected of stealing cash. Which of the following is the LEAST EFFECTIVE phrasing for Christopher to use when posing an admission-seeking question to Jennifer?
Answer : A
The Fraud Examiners Manual warns against phrasing admissions as direct questions using emotive terms:
''The admission-seeking interview begins with a direct accusation... The accusation should be phrased as though the accused's guilt has already been established. Emotive words such as steal, fraud, and crime should be avoided... Wrong: 'Did you do this?'''.
Thus, phrasing the question as ''Did you steal the money?'' is least effective.
Question 7
All of the following are true with regard to textual analytics EXCEPT:
Answer : C
Textual analytics is described as:
''a method of using software to extract usable information from unstructured text data... to reveal patterns, sentiments, and relationships indicative of fraud... Textual analytics provides the ability to uncover additional warning signs of rogue employee behavior''.
Its purpose is not to find direct admissions but to identify indicators and patterns.
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