FREE Certified Fraud Examiner (CFE) MCQ Questions and Answers

Question 1

What does a fraud risk assessment try to do most?

Accepted Answer

To identify areas of the organization that are susceptible to fraud

Answer

Explanation:
The main purpose of a fraud risk assessment is to find places in an organization where fraud could happen. It means looking at the internal control systems, policies, and procedures to stop fraud and determining possible weaknesses and risks.

Question 2

Which of the following is an example of a red flag on a financial statement?

Accepted Answer

A large number of bank reconciliations have not been completed

Answer

Explanation:
In a financial statement, a red flag is something like many unfinished bank reconciliations. It suggests that there may be fraud involving cash or bank accounts, which may need to be looked into further.

Question 3

Which of the following is a common form of financial statement fraud?

Accepted Answer

Overstating expenses to reduce taxes

Answer

Explanation:
One common type of financial statement fraud is overstating expenses to lower taxes. It involves making up expenses or making expenses that don't exist to lower taxable income.

Question 4

Which of these is an example of preventive control?

Accepted Answer

Segregation of duties between employees

Answer

Explanation:
Having different employees do different jobs is an example of preventive control. It means giving other jobs to additional employees so that no one has too much control over a certain process or transaction.

Question 5

Why is a fraud investigation done in the first place?

Accepted Answer

To determine if fraud has occurred

Answer

Explanation:
The main goal of a fraud investigation is to find out if fraud has happened. This could mean gathering evidence, talking to people, and looking at financial records to determine the fraud size and type.

Certified Fraud Examiner Exam Practice Test

Certified Fraud Examiner Exam Practice Test

FREE Certified Fraud Examiner (CFE) MCQ Questions and Answers