ACFE Financial Transactions & Fraud Schemes 3

Question 1

In a Ponzi scheme, returns paid to earlier investors are funded by:

Accepted Answer

Capital contributions from new investors

Answer

Ponzi schemes use money from new investors to pay returns to earlier investors, creating the illusion of a profitable investment when no real returns are generated.

Question 2

Which financial ratio anomaly might suggest that a company is inflating its reported revenue through fictitious sales?

Accepted Answer

DSO increasing significantly while revenue rises

Answer

Rising DSO alongside revenue growth suggests customers are not actually paying, which is consistent with fictitious or prematurely recognized sales.

Question 3

A 'bid-rigging' scheme in procurement fraud most commonly involves:

Accepted Answer

Colluding with vendors to predetermine the winning bidder

Answer

Bid rigging is a form of corruption where competitors collude to ensure a predetermined vendor wins a contract, often at an inflated price.

Question 4

Under the ACFE's fraud tree, 'corruption' schemes are distinct because they:

Accepted Answer

Involve the fraudster using their influence rather than taking assets directly

Answer

Corruption schemes involve employees misusing their position and influence—such as through bribery or conflicts of interest—rather than directly stealing assets.

Question 5

Which document is most useful for detecting a disbursement fraud scheme involving fictitious vendors?

Accepted Answer

Vendor master file compared against employee data

Answer

Comparing the vendor master file to employee records (names, addresses, SSNs, bank accounts) can reveal shell companies set up by insiders.

(ACFE) Association of Certified Fraud Examiners Practice Test

(ACFE) Association of Certified Fraud Examiners Practice Test

ACFE Financial Transactions & Fraud Schemes 3