CFE - Fraud Investigations and Legal Issues ACFE Exam Questions and Answers

Question 1

Which of the following statements is MOST ACCURATE concerning how criminal bargaining agreements are typically handled in jurisdictions where such agreements are allowed?

A. The presiding judge generally has the discretion to determine whether either party will offer a bargaining agreement.
B. The prosecution generally has the discretion to determine whether to offer a bargaining agreement.
C. Both the prosecution and the judge determine whether to offer a bargaining agreement.
D. The defendant’s counsel determines whether to offer a bargaining agreement.

Answer : B

Question 2

If a fraud examiner needs to establish a baseline with an interviewee, which of the following questions would be MOST EFFECTIVE in accomplishing this task?

A. “What time do you usually start working each day?”
B. “How strong do you think your department’s internal controls are?”
C. “Are you familiar with the company’s anti-fraud policy?”
D. “Have any of your coworkers mentioned experiencing financial pressure?”

Answer : A

Question 3

Which of the following statements is MOST ACCURATE regarding cross-examination of witnesses m adversarial jurisdictions?

A. Opposing counsel is mostly concerned with establishing background information.
B. The primary purpose of cross-examination is for opposing counsel to uncover new information about the case.
C. If opposing counsel asks a complex question, the witnesses should avoid the question and talk about something else.
D. Opposing counsel will attempt to make witnesses contradict former statements.

Answer : D

Question 4

Which of the following statements is MOST ACCURATE regarding the volatility of digital evidence?

A. If the integrity of digital evidence is violated through alteration or destruction, then it usually can be restored by a digital forensic expert.
B. Digital evidence is less volatile than tangible evidence because tangible evidence is subject to claims of spoliation and digital evidence is not.
C. Digital evidence is more volatile than tangible evidence because digital data can be altered or destroyed more easily than tangible information
D. The failure to preserve the integrity of digital evidence collected during an investigation does not affect its admissibility in a legal proceeding.

Answer : C

Question 5

Isla, a Certified Fraud Examiner (CFE), has just stared an interview with Doug, a possible witness to a fraud. After introducing herself, Isla thanks Doug for agreeing to be interviewed early in the morning and asks him if he likes to drink coffee or tea to start his day. Isla is MOST LIKELY attempting to:

A. Develop a pattern for questioning.
B. Establish the theme of the interview.
C. Create rapport with the subject.
D. Distract the subject from the interview.

Answer : C

Question 6

Beau is an investigator at a private company in a jurisdiction in which the public has the legal right to be free from unreasonable search and seizure by government authorities. Beau receives credible information that an employee has been stealing properly from the company and selling the items on an online marketplace. Beau wants to search the employee’s workstation for evidence.
How should Beau proceed with the investigation?

A. Beau may proceed with the investigation without obtaining a search warrant.
B. Beau must obtain a search warrant before conducting the investigation.
C. Beau should bring in an unassociated third party from outside the company to conduct the search to ensure fairness.
D. Beau should request that a law enforcement agent join him in conducting the search so a search warrant is not needed.

Answer : A

Question 7

Hongwei, a fraud examiner, is conducting an admission-seeking interview with Harsha, an employee suspected of making personal purchases using the company’s credit card.
Which of the following options is the MOST EFFECTIVE phrasing for Hongwei to use when asking Harsha an admission-seeking question?

A. “Do you know all the employees who have access to the company’s credit card?”
B. “Did you misuse the company credit card by making personal purchases?”
C. “Have you heard of anyone making personal purchases using the company’s credit card?”
D. “Why did you make personal purchases using the company’s credit card?”

Answer : D

Question 8

Ralph, a Certified Fraud Examiner (CFE), has been hired to investigate bribery allegations at Pippy Inc. He is preparing to interview one of Pippy's employees who might be involved in the suspected fraud.
How should Ralph introduce himself to the interviewee?

A. “Hello, my name is Ralph. I’m an investigator hired by Pippy Inc. I hope you can help me gather information about an issue."
B. “Hello, my name is Ralph. I’m a Certified Fraud Examiner, and I hope you can help me gather information about a possible fraud.”
C. “Hello, my name is Ralph. I’m a Certified Fraud Examiner and have been hired by Pippy Inc, to investigate a possible fraud.”
D. “Hello, my name is Ralph. I work for Pippy Inc., and I hope you can help me gather some information I’m trying to collect.”

Answer : C

Question 9

Abram, a fraud examiner, is attempting to determine the disposition of funds and assets that were acquired illicitly by Niko, a procurement employee of TLM Corp. who allegedly conducted a bribery scheme with company vendors.
Which of the following statements regarding why Abram should obtain Niko’s credit card records and statements is MOST ACCURATE?

A. Abram should obtain Niko’s credit card statements because they likely contain information about Niko’s credit history.
B. Abram should obtain Niko’s credit card records because they can reveal Niko’s spending patterns and habits.
C. Abram should obtain Niko’s credit card records because they will show detailed information about suspicious deposits.
D. Abram should obtain Niko’s credit card statements because they will show whether Niko used illicit funds to pay the credit card bills.

Answer : B

Question 10

In jurisdictions that allow for corporate criminal liability, which of the following elements is typically required for the corporation to be vicariously liable for the acts of one of its employees?

A. The employee was acting within the scope of their employment.
B. The employee who committed each element of a criminal offense was a member of management.
C. The employee committed the offense with the intention of personal benefit.
D. The employee was acting at the direction of someone in management or with their knowledge.

Answer : A

Question 11

An employee submits a reimbursement request to their company for a $250 lunch with a client.
Which of the following options would be circumstantial evidence that the employee committed an expense reimbursement scheme?

A. The client presents a receipt showing that they pad for the lunch with their own credit card.
B. The restaurant requires reservations and the restaurant’s logbook shows no record of the lunch.
C. The client provides testimony that they never had lunch with the employee.
D. An email authored by the employee is submitted in which they confess to a coworker that the lunch cost less than $250.

Answer : B

Question 12

A company stores the chemical waste from manufacturing in a warehouse near an individual’s residence. The resident files a civil lawsuit against the company and prevails at trial. As part of the court’s judgment, the company is ordered to remove the waste and is prevented from storing the waste in that location.
Which of the following options BEST describes this type of remedy?

A. Damages
B. Punitive relief
C. Injunction
D. Declaratory relief

Answer : C

Question 13

An informant offers to provide critical information to a fraud examiner in exchange for full confidentiality.
Which of the following responses can the fraud examiner offer the Informant regarding confidentiality?

A. Promise the informant that their identity will remain confidential if the information provided can be corroborated by another party.
B. Promise the informant that they will provide full confidentiality regarding the information provided.
C. Explain to the informant that they will have to reveal their identity to executive leadership.
D. Explain to the informant that they cannot guarantee qualified confidentiality, but all attempts will be made to keep their identity confidential.

Answer : D

Question 14

Emily, a fraud examiner, is tasked with collecting evidence of a payroll fraud scheme through a digital forensic investigation.
Which of the following best practices should Emily follow during the analysis phase?

A. Emily should be primarily concerned with maintaining the integrity of the data when analyzing digital evidence.
B. Emily should prioritize locating exculpatory evidence over inculpatory evidence when analyzing the collected data.
C. Emily should ensure that she uses a specific typo of software to ensure that she is able to fully recover all data.
D. Emily should use a single tool to identify, extract, and collect digital evidence because using multiple tools could skew her results.

Answer : A

Question 15

To prepare an organization for a formal fraud investigation, which of the following steps should be taken?

A. Notify all managers that an investigation will be taking place and why it will be occurring.
B. Alert the subject that they are being investigated by the organization and must comply with any requests.
C. Send an email to staff in affected departments explaining that they might be questioned as part of the investigation.
D. Inform both key decision-makers and the organization’s legal counsel when the investigation is about to start.

Answer : D

CFE - Fraud Investigations and Legal Issues v1.0

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