ACFE Law 2 — Questions and Answers
Question 1: Under the Foreign Corrupt Practices Act (FCPA), which of the following is a valid affirmative defense?
- The payment was made to a government official who requested it
- The payment was a reasonable and bona fide business expenditure directly related to the promotion of products or services (Correct answer)
- The payment amount was below $10,000
- The foreign country's laws do not prohibit such payments
Correct answer: The payment was a reasonable and bona fide business expenditure directly related to the promotion of products or services
The FCPA provides an affirmative defense for payments that are lawful under the written laws of the foreign country or constitute reasonable bona fide business expenditures.
Question 2: Which doctrine allows a court to void a contract if one party used unfair bargaining power to obtain grossly one-sided terms?
- Promissory estoppel
- Unconscionability (Correct answer)
- Fraudulent misrepresentation
- Undue influence
Correct answer: Unconscionability
Unconscionability permits courts to refuse enforcement of contracts that are oppressively one-sided or result from unfair bargaining processes.
Question 3: A Suspicious Activity Report (SAR) filed under the Bank Secrecy Act must generally be filed within how many days of detecting a suspicious transaction?
- 15 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
Financial institutions must file a SAR within 30 days of initially detecting facts that may constitute a basis for filing, or 60 days if no suspect is identified.
Question 4: Under the Sarbanes-Oxley Act Section 806, which employees are protected from retaliation for reporting fraud?
- Only senior executives of publicly traded companies
- Employees of publicly traded companies and their contractors who report securities violations (Correct answer)
- Any employee in the United States who reports any type of fraud
- Only employees who report fraud to the SEC directly
Correct answer: Employees of publicly traded companies and their contractors who report securities violations
SOX Section 806 protects employees of publicly traded companies and their subsidiaries or contractors who report violations of securities laws or SEC rules.
Question 5: In a civil fraud lawsuit, the burden of proof standard typically required is:
- Beyond a reasonable doubt (Correct answer)
- Clear and convincing evidence
- Preponderance of the evidence
- Probable cause
Correct answer: Beyond a reasonable doubt
Most civil fraud claims require proof by a preponderance of the evidence, meaning it is more likely than not that fraud occurred.
Question 6: Which federal statute specifically criminalizes computer fraud and unauthorized access to protected computer systems?
- Electronic Communications Privacy Act
- Computer Fraud and Abuse Act (Correct answer)
- Digital Millennium Copyright Act
- Stored Communications Act
Correct answer: Computer Fraud and Abuse Act
The Computer Fraud and Abuse Act (CFAA) is the primary federal law criminalizing unauthorized access to computer systems and related fraud.
Question 7: The legal concept of 'piercing the corporate veil' allows creditors to:
- Sue corporate officers personally for breach of fiduciary duty
- Hold shareholders personally liable for corporate debts when the corporate form is misused (Correct answer)
- Access privileged communications between a corporation and its attorneys
- Force a corporation to disclose trade secrets in litigation
Correct answer: Hold shareholders personally liable for corporate debts when the corporate form is misused
Piercing the corporate veil is an equitable remedy allowing courts to hold shareholders personally liable when the corporate form is used to perpetrate fraud or injustice.
ACFE Law 2
Under the Foreign Corrupt Practices Act (FCPA), which of the following is a valid affirmative defense?