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CFE-Fraud-Schemes-and-Financial-Crimes Practice Questions

Certified Fraud Examiner -Fraud Schemes and Financial Crimes

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Total Questions : 352

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Question # 31

The essential elements of a ________ are an actual or constructive taking away of the goods or property of another without the consent and against the will of the owner and with a felonious intent.

Options:

A.  

Larceny

B.  

Abuse

C.  

Fiduciary

D.  

None of the above

Discussion 0
Question # 32

To detect fraud committed by a health care provider, a fraud examiner should look for which of the following red flags?

Options:

A.  

The number of claims made by the provider for reimbursement are lower than average.

B.  

There is a high percentage of coding outliers in the provider's documentation.

C.  

The details in the provider's supporting documentation match the health care claim.

D.  

The provider has unusually low profits compared to similar businesses in the same region.

Discussion 0
Question # 33

Ron’s vehicle is damaged by hail after a thunderstorm. Ron does not have full insurance coverage on his vehicle, so he contacts his agent to increase his coverage. Three weeks after his new coverage is in effect, Ron’s city experiences another thunderstorm. Ron then files a claim for the hail damage that occurred during the first storm, but he claims that the damage occurred during the second storm. Ron has committed a fraudulent act known as:

Options:

A.  

Ditching

B.  

Bait and wait

C.  

Past posting

D.  

Double dipping

Discussion 0
Question # 34

Which of the following search is used for unusually high incidence of returns and allowances scheme?

Options:

A.  

Allowances by vendors

B.  

Disposals of allowances than reorders

C.  

Returns and allowances

D.  

None of the above

Discussion 0
Question # 35

In which approach do fraudsters produce whatever financial statements they wish, perhaps using just a typewriter or a personal computer?

Options:

A.  

Organized accounting

B.  

Playing the accounting

C.  

Beating accounting

D.  

Outside accounting system

Discussion 0
Question # 36

Which of the following is a common red flag of procurement fraud schemes involving collusion among contractors?

Options:

A.  

More competitors than usual submit bids on a project or product.

B.  

All contractors submit bids that are consistently low.

C.  

Bid prices decline when a new contractor enters the competition.

D.  

The winning bidder does not subcontract any work to a third party.

Discussion 0
Question # 37

Baker, an employee of ABC Corporation, is the only employee who has control of the purchasing function for his department. Baker authorizes an order for supplies that ABC does not need and uses these supplies to make improvements to his house. This is an example of what kind of fraud?

Options:

A.  

Personal purchases with company funds

B.  

Pass-through scheme

C.  

Pay-and-return scheme

D.  

Theft of inventory

Discussion 0
Question # 38

Otto, a bank manager, purchases a new boat that he cannot afford. Knowing that one of the bank customers is an older client who does not regularly check their account, Otto takes money from the customer's account to make his boat payments. To conceal the missing amount, Otto adjusts the bank's general ledger. Which of the following BEST describes Otto's scheme?

Options:

A.  

Unauthorized disbursement of funds

B.  

Moving money from dormant accounts

C.  

False accounting entry

D.  

Unauthorized withdrawal

Discussion 0
Question # 39

How many accounts are affected in fraudulent accounting entries and therefore the same number of categories on the financial statement?

Options:

A.  

One

B.  

At least two

C.  

More than two

D.  

None of above

Discussion 0
Question # 40

Which of the following statements regarding using front businesses as a method of laundering money is MOST ACCURATE?

Options:

A.  

Money launderers are able to benefit from using front businesses to hide their illegal income because they can easily avoid paying taxes on that income.

B.  

Front businesses can often be detected because these businesses have a large number of customers during peak operating hours and high income.

C.  

Bars, restaurants, and nightclubs are commonly used as front businesses because these venues tend to charge relatively low prices and customers rarely vary in their purchases.

D.  

Front businesses are a favored method because it is difficult to match the costs associated with providing customers food, liquor, and entertainment with the revenues produced.

Discussion 0
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