CFE Forensic Accounting & Financial Fraud Investigation 3

Question 1

The Bank Secrecy Act (BSA) requires financial institutions to file a Currency Transaction Report (CTR) for cash transactions exceeding what threshold?

Accepted Answer

$10,000

Answer

$5,000

Answer

$25,000

Answer

$50,000

Question 2

What is 'structuring' (also called 'smurfing') in the context of money laundering?

Accepted Answer

Deliberately breaking up large cash deposits into smaller amounts below reporting thresholds to avoid detection

Answer

Layering funds through multiple shell companies in different countries

Answer

Using real estate transactions to convert illicit funds into legitimate assets

Answer

Creating complex corporate ownership structures to conceal beneficial ownership

Question 3

Which stage of the money laundering process involves moving funds through complex transactions to conceal their origin?

Accepted Answer

Layering

Answer

Placement

Answer

Integration

Answer

Structuring

Question 4

Under the Foreign Corrupt Practices Act (FCPA), which activity is prohibited for U.S. companies and their agents?

Accepted Answer

Paying bribes to foreign government officials to obtain or retain business

Answer

Conducting business in countries under U.S. trade sanctions

Answer

Employing foreign nationals in U.S. corporate leadership roles

Answer

Transferring funds to overseas subsidiaries without SEC disclosure

Question 5

In a financial fraud investigation, what does 'tracing' refer to?

Accepted Answer

Following the flow of funds from their source through subsequent transactions to their final destination

Answer

Making copies of original financial documents for the case file

Answer

Using handwriting analysis to verify signatures on financial instruments

Answer

Reconstructing deleted electronic financial records

Question 6

Which forensic accounting method reconstructs a subject's income by analyzing all deposits made to bank accounts during the investigation period?

Accepted Answer

Bank deposit method

Answer

Specific item method

Answer

Cash T method

Answer

Percentage of completion method

Question 7

What is the significance of a Suspicious Activity Report (SAR) filed by a financial institution in a fraud investigation?

Accepted Answer

It notifies FinCEN of transactions that may involve money laundering, fraud, or other financial crimes

Answer

It legally freezes the account pending law enforcement review

Answer

It serves as a formal criminal complaint against the account holder

Answer

It triggers an automatic IRS audit of the reported individual