CPI Financial Investigation & Fraud Detection

Question 1

What is the primary purpose of conducting an asset search during a financial investigation?

Accepted Answer

To identify and locate assets that may be subject to recovery or judgment

Answer

Asset searches identify and locate assets such as real property, vehicles, bank accounts, and investments that may be recoverable in civil judgments or relevant to fraud investigations.

Question 2

Which financial document is most useful for tracing the flow of funds in a fraud investigation?

Accepted Answer

Bank statements and transaction records

Answer

Bank statements and transaction records provide a chronological record of all deposits, withdrawals, and transfers, making them the primary tool for tracing the flow of funds.

Question 3

Benford's Law is used in financial investigations primarily to:

Accepted Answer

Detect anomalies in naturally occurring numerical data sets

Answer

Benford's Law states that in naturally occurring data sets, leading digits follow a predictable distribution; deviations from this pattern can indicate manipulated or fabricated financial data.

Question 4

Which type of fraud involves an employee creating fictitious vendors and submitting invoices to steal funds from an employer?

Accepted Answer

Billing scheme fraud

Answer

Billing scheme fraud occurs when an employee creates fictitious or inflated vendor invoices, causing the company to pay for goods or services never received.

Question 5

What is a 'shell company' in the context of financial fraud investigations?

Accepted Answer

A corporation with no active business operations used to obscure ownership or transactions

Answer

A shell company is a legal entity with no genuine business operations, often used to conceal the true ownership of assets, launder money, or obscure fraudulent transactions.

(CPI) Certified Professional Investigator Practice Test

(CPI) Certified Professional Investigator Practice Test

CPI Financial Investigation & Fraud Detection