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CFE-Fraud-Investigations-and-Legal-Issues Practice Questions

Certified Fraud Examiner (CFE) - Fraud Investigations and Legal Issues

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Question # 1

An employee submits a reimbursement request to their company for a $250 lunch with a client. Which of the following options would be circumstantial evidence that the employee committed an expense reimbursement scheme?

Options:

A.  

The client presents a receipt showing that they paid for the lunch with their own credit card.

B.  

The restaurant requires reservations and the restaurant’s logbook shows no record of the lunch.

C.  

The client provides testimony that they never had lunch with the employee.

D.  

An email authored by the employee is submitted in which they confess to a coworker that the lunch cost less than $250.

Discussion 0
Question # 2

Management at First Choice Inc. suspects that Nathan, its chief financial officer (CFO), has been embezzling funds. It hires Reina. a Certified Fraud Examiner (CFE), to investigate the matter When conducting the fraud examination. Reina should proceed as though;

Options:

A.  

After Nathan is terminated, the case will end

B.  

The case will end in litigation.

C.  

Nathan is guilty

D.  

The matter will be resolved completely internally.

Discussion 0
Question # 3

In a particular country ' s judicial process, the judge oversees the investigation of a case is primarily responsible for questioning witnesses and generally plays a larger role in the evidence-gathering process than the parties ' legal counsel Which of the following BEST describes this type of judicial process ' ?

Options:

A.  

Adversarial process

B.  

Substantive law process

C.  

Inquisitorial process

D.  

Common law process

Discussion 0
Question # 4

Which of the following is NOT a requirement of the European Union ' s (EU) General Data Protection Regulation (GDPR)?

Options:

A.  

An organization must delete a data subject ' s personal data automatically when the data are no longer m use.

B.  

An organization must have a documented lawful basis for collecting or processing personal data.

C.  

An organization generally must notify all affected data subjects without undue delay when a high-risk data breach occurs

D.  

An organization must confirm or deny that it possesses a data subject ' s personal data upon that individual ' s request

Discussion 0
Question # 5

Which of the following statements regarding the planning process for admission-seeking interviews is MOST ACCURATE?

Options:

A.  

The interviewee may bring a friend or relative to the interview for translation purposes if an interpreter is required to ensure that their responses are translated accurately.

B.  

Chairs in the interview room should be positioned close together with no more than two feet of space between them to foster a sense of assurance and trust during the interview.

C.  

Fraud examiners should allow the presence of outside observers in interviews if laws or regulations in the jurisdiction require their presence or there are language barriers.

D.  

Fraud examiners should seek to interview suspects remotely whenever possible because remote interview settings are more comfortable for interviewees and reduce potential distractions.

Discussion 0
Question # 6

Antonio is the former boyfriend of Hannah, a fraud suspect. He approaches Ashley, a fraud examiner at Hannah ' s company, and offers to provide critical information about Hannah ' s fraud in exchange for full confidentiality. Which of the following is the MOST APPROPRIATE response for Ashley to make?

Options:

A.  

Ashley should explain that Antonio may have qualified confidentiality but that she cannot make any absolute assurances

B.  

Ashley should promise Antonio unqualified confidentiality over all information provided

C.  

Ashley should explain that all information must be disclosed to management so nothing Antonio says will be confidential

D.  

Ashley should promise Antonio that his identity will not become known.

Discussion 0
Question # 7

Alicia has been charged with tax evasion. As a defense, Alicia claims that she made an honest mistake due to the complexity of the tax law and did not intentionally violate the jurisdiction ' s tax laws. If the court finds that her mistake was made in good faith, then she will most likely NOT be found to have willfully engaged in fraudulent actions to avoid reporting or paying her taxes.

Options:

A.  

True

B.  

False

Discussion 0
Question # 8

Why do fraud examiners perform analysis on unstructured, or textual, data?

Options:

A.  

To determine whether the footnotes to the financial statements are fairly presented

B.  

To find an admission of fraud m an email or other communication that can be presented in court

C.  

To categorize data to reveal patterns, sentiments, and relationships indicative of fraud

D.  

To figure out whether someone is lying or telling the truth based on context duet

Discussion 0
Question # 9

The same customer goes into a bank each day and purchases bearer instruments with cash in amounts just under the mandatory reporting requirements in the jurisdiction. The bank employees suspect that the customer is attempting to violate the jurisdiction’s money laundering regulations. If the jurisdiction’s anti-money laundering AML regulations follow the Financial Action Task Force FATF Recommendations, then the bank:

Options:

A.  

May not file a report of suspicious transactions related to potential criminal activity with the appropriate authorities

B.  

Is required to file a cash transaction report for possible criminal activity with the appropriate authorities because the purchases involved cash

C.  

Is required to file a report of suspicious transactions with the appropriate authorities because the employees suspect money laundering violations

D.  

May, but is not required to, file a report of suspicious transactions related to possible money laundering with the appropriate authorities

Discussion 0
Question # 10

Antonio is investigating Sam on behalf of their employer, XYZ Company. During the investigation, Antonio tells a group of their coworkers who are not involved in the investigation that he discovered Sam has a serious gambling addiction, which is true. Assuming that their jurisdiction has civil laws for all of the following causes of action, which one would give Sam the BEST chance for success if he decides to bring a civil action against Antonio?

Options:

A.  

Public disclosure of private facts

B.  

Negligent misrepresentation

C.  

Slander

D.  

Defamation

Discussion 0
Question # 11

Callie is an employee at Red Incorporated, a private company in a jurisdiction in which the public has the legal right to be free from unreasonable search and seizure by government authorities. Steven, an investigator employed by Red, searches Callie’s office and discovers several personal items that other employees have reported missing. Steven seizes the items and gives them to law enforcement. By failing to obtain a search warrant before conducting his search, Steven has violated Callie’s rights.

Options:

A.  

True

B.  

False

Discussion 0
Question # 12

Which of the following statements concerning money services businesses MSBs is MOST ACCURATE?

Options:

A.  

A depository investment bank is classified as an MS

B.  

B.  

A currency exchange is classified as an MS

B.  

C.  

MSBs are generally at a lower risk of money laundering than consumer banks.

D.  

MSBs generally have stricter regulations than other financial institutions.

Discussion 0
Question # 13

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?

Options:

A.  

Bias.

B.  

Contradiction.

C.  

Myopic vision.

D.  

Sounding board.

Discussion 0
Question # 14

Divya, a Certified Fraud Examiner (CFE), is considering whether to commence a legal action to recover assets for her client. Of the following choices, which is the MOST IMPORTANT question for Divya to ask before moving forward with the legal action?

Options:

A.  

“Does the defendant have sufficient money or property to satisfy a judgment?”

B.  

“Has the suspect been arrested for any crimes in the past?”

C.  

“What is the likelihood that the suspect did not actually commit fraud?”

D.  

“Is there a relevant statute of limitations for the offense?”

Discussion 0
Question # 15

Which of the following statements about civil actions in most jurisdictions is CORRECT?

Options:

A.  

The plaintiff ' s complaint must typically contain a copy of all documents that might be relevant to the case.

B.  

Civil actions begin with the filing of a pleading, usually in the jurisdiction where the defendant resides or where the claim originated.

C.  

The plaintiff ' s complaint does not need to state the grounds for legal relief.

D.  

All of the above are correct.

Discussion 0
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