Practice Test Geeks(FAC) Federal Acquisition Certification Practice Test
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Fraud Detection & Prevention Flashcards

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

Read the first 7 Fraud Detection & Prevention flashcards as text

  1. Which scheme involves a contractor employee approving payments to a fictitious vendor that the employee controls?

    Answer: Phantom vendor fraud

    Phantom vendor fraud occurs when an employee creates fictitious vendor accounts and approves fraudulent invoices, diverting funds to themselves.

  2. A prime contractor knowingly passes a subcontractor's falsely inflated invoice to the government for reimbursement. The prime contractor:

    Answer: May be liable under the False Claims Act for knowingly presenting a false claim

    Under the False Claims Act, a contractor who knowingly presents or causes to be presented a false claim—including a subcontractor's false invoice—faces treble damages and civil penalties.

  3. Which of the following is a key control to prevent fraud in the invoice payment process?

    Answer: Segregation of duties between invoice approval and payment

    Segregation of duties ensures that no single employee controls all steps of a financial transaction, reducing the opportunity for fraud.

  4. Under FAR 3.1004, contractors with contracts over $5 million and performance periods of 120 days or more must display the fraud hotline poster of which agency?

    Answer: Agency Inspector General

    FAR 3.1004 requires covered contractors to display agency IG hotline posters to encourage reporting of fraud, waste, and abuse.

  5. A contractor substitutes a cheaper, non-conforming component while billing for the specified part. This is known as:

    Answer: Product substitution fraud

    Product substitution fraud involves delivering inferior or non-conforming goods while billing as if the required specification was met.

  6. What is the role of DCAA (Defense Contract Audit Agency) in fraud prevention?

    Answer: Auditing contractor costs and internal controls on defense contracts

    DCAA performs contract audits to verify that costs claimed by contractors are allowable, allocable, and reasonable, helping detect cost fraud on defense contracts.

  7. An employee reports suspected procurement fraud to the agency IG. Under the Inspector General Act, the IG must:

    Answer: Report significant problems to the agency head and Congress

    The Inspector General Act requires IGs to keep the agency head and Congress informed of significant problems, abuses, and deficiencies relating to agency programs.