CVA CVA Risk Assessment & Fraud Detection 2 — Questions and Answers
Question 1: What distinguishes a hard fraud indicator from a soft fraud indicator in CVA assessments?
- Hard indicators are definitive evidence of fraud; soft indicators suggest further scrutiny is needed (Correct answer)
- Hard indicators relate to financial documents only
- Soft indicators are reported to law enforcement immediately
- Hard indicators are gathered only during field visits
Correct answer: Hard indicators are definitive evidence of fraud; soft indicators suggest further scrutiny is needed
Hard fraud indicators constitute definitive evidence requiring escalation, while soft indicators are patterns warranting additional investigation.
Question 2: A CVA agent finds a document with altered dates. What category of fraud does this represent?
- Document tampering (Correct answer)
- Identity theft
- Perjury
- Systemic fraud
Correct answer: Document tampering
Physically or digitally altering dates on submitted documents constitutes document tampering, a specific category of fraud.
Question 3: Which internal control helps prevent conflicts of interest during CVA risk assessments?
- Rotating verifiers so agents do not repeatedly handle the same claimant's cases (Correct answer)
- Allowing agents to self-report suspected fraud
- Permitting supervisors to override risk scores without documentation
- Reducing the number of required sign-offs
Correct answer: Rotating verifiers so agents do not repeatedly handle the same claimant's cases
Rotating agents across cases prevents familiarity bias and conflicts of interest that could compromise objective risk assessment.
Question 4: Under CVA standards, how should an agent handle a suspected fraudulent claim that lacks sufficient evidence to confirm fraud?
- Flag it as suspicious, document findings, and continue monitoring (Correct answer)
- Deny the claim based on suspicion alone
- Approve the claim to avoid false accusations
- Close the file without notation
Correct answer: Flag it as suspicious, document findings, and continue monitoring
Without sufficient evidence, agents must flag suspicions, document all findings thoroughly, and continue monitoring rather than making final determinations.
Question 5: Which data anomaly technique do CVA agents use to identify outliers in large verification datasets?
- Benford's Law analysis to detect unnatural digit distributions (Correct answer)
- Simple arithmetic averaging of all submitted values
- Alphabetical sorting of claimant names
- Reviewing only the largest and smallest values
Correct answer: Benford's Law analysis to detect unnatural digit distributions
Benford's Law analysis detects unnatural digit frequency distributions in financial datasets, a widely used fraud detection technique.
Question 6: What is 'collusion' in the context of CVA fraud detection?
- Two or more parties cooperating to deceive the verification process (Correct answer)
- A claimant submitting duplicate documents
- An agent missing a verification deadline
- A supervisor approving a disputed claim
Correct answer: Two or more parties cooperating to deceive the verification process
Collusion in verification contexts refers to two or more parties working together to deceive or circumvent the verification process.
CVA CVA Risk Assessment & Fraud Detection 2
What distinguishes a hard fraud indicator from a soft fraud indicator in CVA assessments?