CFE Forensic Accounting & Financial Fraud Investigation

Question 1

Which financial statement fraud scheme involves recording fictitious revenues to inflate a company's reported income?

Accepted Answer

Fictitious revenue scheme

Answer

Asset misappropriation

Answer

Expense reimbursement fraud

Answer

Check tampering

Question 2

The Fraud Triangle, developed by criminologist Donald Cressey, identifies which three elements present in most fraud cases?

Accepted Answer

Pressure, Opportunity, and Rationalization

Answer

Motive, Means, and Opportunity

Answer

Intent, Capability, and Access

Answer

Need, Greed, and Deception

Question 3

In forensic accounting, what does the term 'benford's law' refer to?

Accepted Answer

A mathematical pattern predicting the frequency distribution of leading digits in natural datasets

Answer

A legal standard for admissibility of financial records

Answer

A regulation governing forensic accountant licensing

Answer

A method for tracing wire transfers across jurisdictions

Question 4

Which type of asset misappropriation scheme involves an employee manipulating accounts receivable records to conceal the theft of customer payments?

Accepted Answer

Lapping

Answer

Skimming

Answer

Larceny

Answer

Kiting

Question 5

What is the primary purpose of a 'net worth analysis' in a financial fraud investigation?

Accepted Answer

To estimate unreported income by comparing changes in net worth to known income sources

Answer

To calculate the total damages owed to fraud victims

Answer

To determine the market value of seized assets for forfeiture

Answer

To establish a suspect's ability to pay restitution

Question 6

Which document examination technique involves comparing ink or paper characteristics to determine whether a document was altered after original signing?

Accepted Answer

Questioned document examination

Answer

Link analysis

Answer

Analytical review

Answer

Timeline reconstruction

Question 7

Under ACFE standards, which category of occupational fraud typically results in the highest median loss to organizations?

Accepted Answer

Financial statement fraud

Answer

Asset misappropriation

Answer

Corruption

Answer

Payroll fraud