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

The BSA mandates that financial institutions file a CTR for any cash transaction exceeding $10,000, creating a paper trail that forensic examiners can use to trace large cash movements.

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

Structuring involves deliberately making multiple smaller cash transactions to stay below the $10,000 CTR threshold — it is itself a federal crime under 31 U.S.C. § 5324.

Question 3

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

Accepted Answer

Layering

Answer

Layering is the second stage of money laundering, involving complex financial transactions — wire transfers, currency conversions, shell companies — designed to obscure the audit trail.

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

The FCPA prohibits U.S. persons and companies from bribing foreign government officials to gain business advantages, and also requires accurate books and records.

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

Tracing involves following the path of specific funds through a series of transactions to establish where money came from and where it ultimately went.

(CFE) Certified Forensic Examiner Practice Test

(CFE) Certified Forensic Examiner Practice Test

CFE Forensic Accounting & Financial Fraud Investigation 3