RCMS Financial Crimes & Fraud Prevention Flashcards

Which element of a strong anti-fraud program involves reviewing financial transactions for anomalies using data analytics?

Answer: Continuous transaction monitoring

Continuous transaction monitoring uses data analytics to flag unusual patterns that may indicate fraud, enabling proactive detection.

Under the Dodd-Frank Act, whistleblowers who report securities violations to the SEC may receive monetary awards of what percentage of sanctions collected?

Answer: 10 to 30 percent

Dodd-Frank authorizes the SEC to award whistleblowers between 10% and 30% of sanctions over $1 million collected from enforcement actions.

A compliance officer reviewing expense reports notices multiple claims just below the approval threshold. This pattern most likely indicates:

Answer: Structuring to avoid approval controls

Submitting claims just below approval thresholds is a structuring tactic used to circumvent internal controls, similar to smurfing in AML.

Which internal control specifically helps detect ghost employee fraud in payroll?

Answer: Periodic reconciliation of payroll records to HR-approved employee lists

Reconciling payroll records against HR-approved active employee lists regularly exposes ghost employees added by fraudsters.

The ACFE's Fraud Prevention Check-Up recommends that organizations with effective anti-fraud programs experience fraud losses that are approximately what percentage lower than those without such programs?

Answer: 50 percent lower

ACFE research consistently finds that organizations with proactive anti-fraud controls suffer losses roughly 50% lower than those without them.

Which of the following is the best example of a detective control in a fraud prevention framework?

Answer: Surprise audits of petty cash funds

Surprise audits are detective controls because they identify fraud after it has occurred, rather than preventing it from happening.