PCI PCI Financial Investigation & Asset Recovery 2

Question 1

What is 'lapping' as a financial fraud scheme?

Accepted Answer

Stealing payments from one account and covering it with funds from another

Answer

Lapping is a scheme where an employee steals a payment from one customer and then uses subsequent payments from other customers to cover the shortfall.

Question 2

What is 'ghost employee' fraud?

Accepted Answer

Adding fictitious employees to the payroll to divert funds

Answer

Ghost employee fraud involves adding fictitious persons to the payroll so that fraudsters can collect their wages.

Question 3

What does 'net worth analysis' reveal in a financial investigation?

Accepted Answer

Changes in an individual's assets and liabilities that may indicate unexplained income

Answer

Net worth analysis compares a subject's known income to changes in assets and liabilities, revealing income that cannot be explained by legitimate sources.

Question 4

In embezzlement cases, what is the significance of Benford's Law?

Accepted Answer

Naturally occurring numbers follow a predictable distribution that fraud can disrupt

Answer

Benford's Law states that in legitimate datasets the leading digit follows a specific distribution, and deviations from this pattern may indicate fraudulent data manipulation.

Question 5

What is the primary purpose of a forensic accounting examination in an investigation?

Accepted Answer

To analyze financial records to detect fraud, embezzlement, or other financial crimes

Answer

Forensic accounting applies accounting and investigative skills to analyze financial records in the context of legal proceedings or investigations.

(PCI) Professional Certified Investigator Practice Test

(PCI) Professional Certified Investigator Practice Test

PCI PCI Financial Investigation & Asset Recovery 2