Practice Questions Flashcards
7 cards from real CFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Practice Questions flashcards as text
Which document analysis technique involves examining the pressure indentations on paper beneath a written document?
Answer: ESDA (Electrostatic Detection Apparatus)
ESDA detects latent impressions on paper caused by writing pressure, useful for detecting altered or forged documents.
Benford's Law is most useful in fraud examination for:
Answer: Identifying unusual patterns in naturally occurring numerical data sets
Benford's Law predicts the frequency distribution of leading digits in legitimate data sets, and deviations may indicate manipulation.
The 'fraud triangle' theory attributes occupational fraud to three conditions. Which of the following is NOT one of them?
Answer: Greed
The fraud triangle consists of perceived pressure, opportunity, and rationalization—greed is not one of the three elements.
During an investigation, an examiner discovers that a purchasing manager approved invoices from a vendor owned by their spouse. This is an example of:
Answer: Conflicts of interest
A conflict of interest exists when an employee has an undisclosed personal stake in a transaction that influences their business decisions.
Which statement about the False Claims Act is accurate?
Answer: It allows private citizens to file suit on behalf of the government and share in any recovery
The False Claims Act's qui tam provisions allow whistleblowers (relators) to sue on the government's behalf and receive a portion of the recovered funds.
An auditor who discovers an employee has been forging checks is legally obligated to:
Answer: Follow the organization's internal escalation and reporting procedures
CFEs should follow the client organization's established protocols for escalating fraud findings unless otherwise required by law.
Which type of corruption scheme involves a vendor paying a company employee for confidential bid information?
Answer: Bid rigging
Bid rigging occurs when competitors collude or insiders provide inside information to give a vendor an unfair advantage in a competitive bidding process.