CFE Certified Fraud Examiner Fraud Law and Legal Elements

Question 1

Which element is NOT required to prove civil fraud in the United States?

Accepted Answer

A criminal conviction of the perpetrator

Answer

A material false representation

Answer

Knowledge of falsity or reckless disregard for truth

Answer

Justifiable reliance by the victim

Question 2

Under the Foreign Corrupt Practices Act (FCPA), which of the following payments is explicitly permitted?

Accepted Answer

Facilitating payments to expedite routine governmental actions

Answer

Payments to foreign officials to win government contracts

Answer

Gifts given to influence business decisions of foreign officials

Answer

Payments disguised as consulting fees to foreign officials

Question 3

The Sarbanes-Oxley Act Section 806 primarily protects which group?

Accepted Answer

Employees of publicly traded companies who report securities fraud

Answer

External auditors who report audit deficiencies

Answer

Shareholders who file derivative lawsuits

Answer

Foreign investors in U.S. companies

Question 4

Which doctrine holds that a corporation is criminally liable for crimes committed by its employees acting within the scope of their employment?

Accepted Answer

Respondeat superior

Answer

Alter ego doctrine

Answer

Piercing the corporate veil

Answer

Vicarious immunity

Question 5

Which standard of proof applies in a civil fraud lawsuit in the United States?

Accepted Answer

Preponderance of the evidence

Answer

Beyond a reasonable doubt

Answer

Clear and convincing evidence

Answer

Probable cause

Question 6

Which federal statute criminalizes the use of mail or wire communications in furtherance of a scheme to defraud?

Accepted Answer

Mail and Wire Fraud Statutes (18 U.S.C. §§ 1341, 1343)

Answer

RICO Act

Answer

Bank Secrecy Act

Answer

Computer Fraud and Abuse Act