Practice Test Geeks(CFS) Certified Fraud Specialist Practice Test
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Legal Aspects & Regulatory Compliance 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. In a civil fraud case, the standard of proof required to prevail is:

    Answer: Preponderance of the evidence

    Civil fraud claims require proof by a preponderance of the evidence (more likely than not), though some jurisdictions require clear and convincing evidence.

  2. Which statute makes it a federal crime to conduct a financial transaction involving proceeds from specified unlawful activity with intent to promote that activity?

    Answer: Money Laundering Control Act (18 U.S.C. § 1956)

    18 U.S.C. § 1956 criminalizes conducting financial transactions with proceeds of specified unlawful activity when done to promote, conceal, or evade reporting.

  3. Under the attorney-client privilege, communications are protected only when they are made:

    Answer: Between a client and attorney for the purpose of seeking legal advice

    Attorney-client privilege protects confidential communications between a client and their attorney made for the purpose of obtaining legal advice.

  4. A Deferred Prosecution Agreement (DPA) differs from a Non-Prosecution Agreement (NPA) primarily in that a DPA:

    Answer: Files charges that are held in abeyance pending compliance

    In a DPA, the government files criminal charges but agrees to defer prosecution if the company meets compliance conditions, whereas an NPA involves no filed charges.

  5. Under the Foreign Corrupt Practices Act, which of the following is a valid affirmative defense?

    Answer: The payment was a reasonable and bona fide business expenditure

    The FCPA provides an affirmative defense for payments that were reasonable, bona fide expenditures directly related to the promotion or performance of a contract.

  6. Which IRS form must U.S. persons file to report a financial interest in or signature authority over foreign financial accounts exceeding $10,000?

    Answer: FinCEN Form 114 (FBAR)

    FinCEN Form 114, known as the FBAR, must be filed annually by U.S. persons with foreign financial account balances exceeding $10,000 at any point during the year.

  7. The legal concept that evidence obtained through an unlawful search cannot be used in criminal proceedings is known as the:

    Answer: Exclusionary rule

    The exclusionary rule bars the use of evidence obtained in violation of the Fourth Amendment in criminal prosecutions.