Practice Test Geeks(CFS) Certified Fraud Specialist Practice Test
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Financial Transactions & Reporting Flashcards

7 cards from real CFS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. A bank teller processes multiple cash deposits just under $10,000 over several days for the same customer. What term describes this activity?

    Answer: Structuring (smurfing)

    Structuring, also called smurfing, involves breaking large cash amounts into smaller transactions to evade the $10,000 CTR filing threshold.

  2. Under the Bank Secrecy Act, a financial institution must file a Suspicious Activity Report (SAR) within how many days of detecting a suspicious transaction?

    Answer: 30 days

    SARs must be filed within 30 days of initial detection of the suspicious activity, or 60 days if no suspect can be identified.

  3. Which financial statement is most useful for detecting fictitious revenue schemes because it shows cash collected vs. revenue recognized?

    Answer: Statement of cash flows

    The statement of cash flows reveals discrepancies between reported revenue and actual cash receipts, exposing fictitious revenue schemes.

  4. A company records a sale at year-end but ships the goods in the following quarter. This is an example of which fraud scheme?

    Answer: Improper revenue cutoff

    Improper revenue cutoff involves recording revenue in the wrong period, such as booking sales before goods are actually delivered.

  5. What does the term 'round-tripping' refer to in the context of financial fraud?

    Answer: A company selling assets to a counterparty and buying them back to inflate revenue

    Round-tripping involves two companies exchanging assets or cash with no economic substance, artificially inflating each other's revenue.

  6. Which ratio is a key red flag indicator when accounts receivable grows much faster than revenue?

    Answer: Days sales outstanding (DSO)

    Rising DSO relative to peers or prior periods suggests that receivables are not being collected, possibly because they are fictitious.

  7. In a lapping scheme, a fraudster covers a misappropriated payment from Customer A by applying a later payment from which source?

    Answer: Customer B's subsequent payment

    In lapping, the fraudster uses Customer B's payment to post against Customer A's account, perpetually shifting the shortage forward.