CFE Practice Questions 3

Question 1

In a lapping scheme, the fraudster typically:

Accepted Answer

Uses one customer's payment to cover a previous customer's stolen payment

Answer

Lapping involves stealing one customer's payment and covering it with a subsequent customer's payment, creating a perpetual cycle.

Question 2

The Sarbanes-Oxley Act Section 302 requires which of the following?

Accepted Answer

CEOs and CFOs to personally certify the accuracy of financial reports

Answer

SOX Section 302 requires the principal executive and financial officers to personally certify the accuracy of periodic financial reports.

Question 3

Which of the following is the most effective anti-fraud control according to ACFE research?

Accepted Answer

Hotlines for reporting tips

Answer

ACFE research consistently shows that tips—often received through hotlines—are the most common method of detecting fraud.

Question 4

When conducting a fraud interview, the Cognitive Interview technique is designed to:

Accepted Answer

Maximize the amount of accurate information recalled by a witness

Answer

The Cognitive Interview is a structured questioning technique that helps witnesses recall more accurate details about events.

Question 5

A 'ghost employee' scheme involves:

Accepted Answer

Adding fictitious employees to payroll and collecting their paychecks

Answer

Ghost employee schemes involve adding nonexistent workers to payroll and diverting their paychecks to the fraudster.

Certified Fraud Examiner Exam Practice Test