CFS Financial Transactions & Reporting 2

Question 1

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

Accepted Answer

Structuring (smurfing)

Answer

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

Question 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?

Accepted Answer

30 days

Answer

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

Question 3

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

Accepted Answer

Statement of cash flows

Answer

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

Question 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?

Accepted Answer

Improper revenue cutoff

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

(CFS) Certified Fraud Specialist Practice Test

(CFS) Certified Fraud Specialist Practice Test

CFS Financial Transactions & Reporting 2