ACFE Legal Elements of Fraud 2

Question 1

Under common law, which element of fraud requires that the victim actually relied on the false representation?

Accepted Answer

Justifiable reliance

Answer

Justifiable reliance means the victim must have reasonably relied on the misrepresentation when making their decision.

Question 2

The term 'scienter' in fraud law refers to:

Accepted Answer

Knowledge of falsity or reckless disregard for the truth

Answer

Scienter is the mental state element requiring the perpetrator to have known the statement was false or acted with reckless disregard for its truth.

Question 3

A material misrepresentation in fraud is best defined as one that:

Accepted Answer

Would influence a reasonable person's decision

Answer

Materiality means the false statement was significant enough that a reasonable person would consider it important when making a decision.

Question 4

Which of the following is NOT a required element of civil fraud under most U.S. jurisdictions?

Accepted Answer

A written contract

Answer

Civil fraud does not require a written contract; it can occur through oral or implied misrepresentations.

Question 5

In the context of fraud, 'concealment' as a form of misrepresentation requires:

Accepted Answer

A duty to disclose that was breached

Answer

Concealment constitutes fraud when a party with a legal duty to disclose material information intentionally withholds it.

(ACFE) Association of Certified Fraud Examiners Practice Test