ACFE Investigation 5 — Questions and Answers
Question 1: In a fraud investigation, what is the purpose of an 'exit interview' or 'admission-seeking interview' at the conclusion of an investigation?
- To formally terminate the suspect's employment
- To present evidence to the suspect and obtain an admission or explanation (Correct answer)
- To notify law enforcement of findings
- To deliver the final investigative report to management
Correct answer: To present evidence to the suspect and obtain an admission or explanation
An admission-seeking interview presents evidence to the suspect in a structured way to elicit a confession, explanation, or denial that can be evaluated.
Question 2: What does the term 'money laundering' specifically describe in the context of fraud investigations?
- Converting personal assets into business assets to avoid taxes
- The process of making illegally obtained funds appear legitimate (Correct answer)
- Transferring funds between related business entities
- Overstating cash balances on financial statements
Correct answer: The process of making illegally obtained funds appear legitimate
Money laundering is the process of concealing the origin of illegally obtained money by passing it through a complex sequence of banking transfers or commercial transactions.
Question 3: Which digital forensics concept ensures that a forensic copy is an exact bit-for-bit duplicate of the original storage media?
- Hash value verification (Correct answer)
- Chain of custody documentation
- File carving
- Metadata extraction
Correct answer: Hash value verification
Hash values (MD5, SHA-256) generated before and after copying verify that the forensic image is an exact duplicate and has not been altered.
Question 4: Under the Bank Secrecy Act (BSA), financial institutions are required to file a Currency Transaction Report (CTR) for cash transactions exceeding what threshold?
- $5,000
- $10,000 (Correct answer)
- $25,000
- $50,000
Correct answer: $10,000
The BSA requires financial institutions to file a CTR for any cash transaction exceeding $10,000 in a single business day.
Question 5: What is 'structuring' (also known as 'smurfing') in the context of financial fraud?
- Organizing financial records into structured databases for analysis
- Breaking large cash transactions into smaller amounts to avoid CTR reporting requirements (Correct answer)
- Creating a corporate structure to hide beneficial ownership
- Structuring loan repayments to minimize interest costs
Correct answer: Breaking large cash transactions into smaller amounts to avoid CTR reporting requirements
Structuring involves deliberately breaking up cash transactions into amounts below $10,000 to avoid triggering Currency Transaction Report requirements, which is itself a federal crime.
Question 6: Which investigative technique involves analyzing check digit anomalies and sequence gaps in invoice or check numbers to detect fraud?
- Regression analysis
- Benford's Law analysis
- Sequence gap analysis (Correct answer)
- Statistical sampling
Correct answer: Sequence gap analysis
Sequence gap analysis examines numbering sequences for missing, duplicated, or out-of-order documents that may indicate fraudulent additions or removals.
Question 7: When a fraud examiner prepares a written investigative report, which content should generally be EXCLUDED to maintain professional standards?
- A summary of evidence gathered
- Recommendations for internal control improvements
- Personal opinions about the subject's character or morality (Correct answer)
- A factual timeline of events
Correct answer: Personal opinions about the subject's character or morality
ACFE professional standards require fraud examiners to exclude personal opinions about a subject's character, limiting reports to factual findings and objective conclusions.
ACFE Investigation 5
In a fraud investigation, what is the purpose of an 'exit interview' or 'admission-seeking interview' at the conclusion of an investigation?