CFE Cheat Sheet 2026

The 30 highest-yield CFE facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which of the following would most likely be classified as a 'nonadmitted asset' under SAP? → Furniture and equipment exceeding regulatory allowed limits
2. When implementing regulatory compliance & ethics practices, what should a CFE professional prioritize first? → Compliance with established standards and protocols
3. Which type of risk can be eliminated through portfolio diversification? → Unsystematic (idiosyncratic) risk
4. Which of the following best describes a key competency required for risk assessment & mitigation in CFE certification? → Critical thinking and evidence-based decision making
5. Which asset allocation strategy automatically rebalances a portfolio by selling outperforming assets and buying underperforming ones? → Strategic (rebalancing) asset allocation
6. Why is strategic planning essential in managing financial institutions? → To set long-term goals and adapt to market conditions
7. In Certified Financial Examiner, what role does audit procedures & internal controls play in ensuring client/stakeholder satisfaction? → It builds trust through demonstrated competence and consistency
8. What is the significance of peer review in audit procedures & internal controls for CFE professionals? → It promotes accountability, knowledge sharing, and quality improvement
9. A 'qualified mortgage' under the Dodd-Frank Act must include which feature? → Verification that the borrower has the ability to repay
10. What is a common indicator of potential financial fraud? → Unusual transactions or accounting discrepancies
11. Under SAP, how are policy acquisition costs (such as agent commissions) treated compared to GAAP? → Expensed immediately under SAP, but deferred and amortized under GAAP
12. What is the significance of ratio analysis in financial reporting? → To assess the company's financial health and performance
13. Which of the following best describes a key competency required for regulatory compliance & ethics in CFE certification? → Critical thinking and evidence-based decision making
14. What is the role of risk management in financial institution operations? → To identify and reduce potential risks to protect the institution's assets
15. What is the significance of peer review in risk assessment & mitigation for CFE professionals? → It promotes accountability, knowledge sharing, and quality improvement
16. Which ratio is commonly used to measure an organization's profitability? → Return on assets (ROA)
17. Under the Home Mortgage Disclosure Act (HMDA), financial institutions must collect and report data primarily to: → Detect and deter discriminatory lending patterns
18. Which documentation practice is most important for regulatory compliance & ethics in the CFE field? → Maintaining complete, accurate, and timely records
19. What does the 'combined ratio' measure in property-casualty insurance? → The sum of the loss ratio and the expense ratio
20. Why is it important to regularly assess and update internal controls? → To ensure compliance with laws and reduce risks
21. Which quality improvement method is most applicable to audit procedures & internal controls in Certified Financial Examiner? → Plan-Do-Check-Act (PDCA) continuous improvement cycle
22. Why are regulatory compliance programs important in financial institutions? → To avoid fines and penalties and ensure business continuity
23. When implementing audit procedures & internal controls practices, what should a CFE professional prioritize first? → Compliance with established standards and protocols
24. What is the primary purpose of financial institution management? → To maximize profits while maintaining legal and regulatory compliance
25. What is the role of employee training in fraud prevention? → To educate employees on identifying and reporting fraud
26. What is the primary concern with a financial institution holding excessive amounts of illiquid long-term investments? → Asset-liability mismatch causing liquidity risk
27. Under the Servicemembers Civil Relief Act (SCRA), active-duty military members are entitled to which mortgage benefit? → Interest rate cap of 6% on pre-service mortgage loans
28. What is the difference between detective and corrective controls? → Detective controls identify problems, while corrective controls fix them
29. A portfolio shows negative correlation between two asset classes. What does this mean for diversification? → The assets move in opposite directions, providing diversification benefits
30. Which of the following best describes a key competency required for tax planning & strategy in CFE certification? → Critical thinking and evidence-based decision making