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The Association of Certified Fraud Examiners (ACFE) is a professional organization dedicated to the prevention, detection, and deterrence of fraud. One of the ways that the ACFE achieves this mission is by offering certification programs for professionals who specialize in fraud prevention and detection. The Certified Fraud Examiner (CFE) designation is one of the most respected and recognized certifications in the field of fraud.
NEW QUESTION # 114
According to a survey, in principal perpetrator, males in a majority of cases, accounting for ___ percent of frauds versus ___ percent in which a female was the primary culprit.
- A. 62 versus 37
- B. 61 versus 39
- C. 62 versus 36
- D. None of the above
Answer: B
NEW QUESTION # 115
A special scheme in which employees know their employer is seeking to purchase a certain asset and take advantage of the situation by purchasing the asset themselves is:
- A. Written sale of unique assets
- B. Unauthorized sale
- C. Conflict of interest in sale
- D. Turnaround sale or flip
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:This scheme is known as a Turnaround Sale or Flip. The employee secretly purchases an asset their employer needs and then resells it to the employer at a markup, thereby profiting at the employer's expense.
* Analysis of Incorrect Options:
* A. Conflict of interest in sale - Too general; does not describe the flipping mechanism.
* C. Unauthorized sale - Not an ACFE fraud category in this context.
* D. Written sale of unique assets - Not a recognized scheme.
* Key Concept: Conflict of Interest scheme - Turnaround Sales/Flips.
Reference: ACFE Fraud Examiners Manual (2020), Conflict of Interest: Turnaround Sales.
NEW QUESTION # 116
Which of the following offender types are people who take the money and run away?
- A. Absconders
- B. Offender types
- C. Long-term violators
- D. None of the above
Answer: A
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:According to the Fraud Examiners Manual (2020 International Edition), offenders can be categorized into types. Absconders are individuals who commit fraud and immediately flee with the proceeds ("take the money and run"). They differ from long-term violators who maintain their frauds for extended periods while concealing them. Thus, the correct answer is A.
Absconders.
* Analysis of Incorrect Options:
* B. Long-term violators - These offenders commit frauds over a long period and often maintain their positions of trust while continuing the scheme.
* C. Offender types - Too vague; not a specific classification.
* D. None of the above - Incorrect, since "Absconders" directly matches.
* Key Concept:Offender Typologies - distinguishing between absconders and long-term violators in occupational fraud.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Fraud Theory - Types of Offenders
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NEW QUESTION # 117
To help prevent fraudulent billing schemes, it is recommended that companies combine the purchasing and payment functions.
- A. False
- B. True
Answer: A
Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/ACFE_Website/Content/review/cpf/07-Performance-Schemes.pdf
NEW QUESTION # 118
Collusion or bid-rigging between bidders is called
- A. Contract acceptance
- B. Bid solicitation
- C. Bribery receipt
- D. To withdraw low bids
Answer: A
NEW QUESTION # 119
The _______________ cost method of pricing would carry an asset's value on the financial statements as what it would currently cost, considering inflation.
Answer:
Explanation:
Price-level adjusted historical cost
NEW QUESTION # 120
George, a 71-year-old man, receives a fraudulent message on his computer stating that his computer has been infected by a virus. When George calls the phone number listed on the message, he speaks with a fraudster who charges him for computer repair services that are unnecessary. George has MOST LIKELY been victimized by which of the following schemes?
- A. Tech-support scheme
- B. Smishing
- C. Bait and switch scheme
- D. Pharming
Answer: A
NEW QUESTION # 121
Which of the following actions can make mobile payments more secure?
- A. Disabling the biometric features on a newer mobile device
- B. Using the same log-in credentials for all payment applications
- C. Activating biometric authentication to verify the user's identity
- D. None of the above
Answer: C
NEW QUESTION # 122
Which of the following is MOST ACCURATE concerning common methods that identity thieves use to steal information?
- A. Baiting involves leaving flash drives or similar items that have been infected with malware in places where people are likely to find them.
- B. Dumpster diving involves searching for sensitive personal information on used computers that have been purchased from a reseller.
- C. Pharming is the practice of changing a victim's email or mailing address so that the identity thief receives the victim's mail.
- D. Shoulder surfing is the practice of exploiting another person's access capability to gain access to restricted areas.
Answer: A
NEW QUESTION # 123
____________ is a summary of the account balances carried in a ledger.
- A. Balance sheet
- B. Financial statement
- C. General journal
- D. Income statement
Answer: B
NEW QUESTION # 124
Fraudsters use the accounting system as a tool to generate the results they want in ___________ approach:
- A. All of the above
- B. Playing the accounting
- C. Organized accounting
- D. beating accounting
Answer: B
NEW QUESTION # 125
All of the following items appear on the balance sheet EXCEPT:
- A. Retained earnings
- B. Assets
- C. Cost of goods sold
- D. Liabilities
Answer: A
Explanation:
Explanation/Reference: https://www.investopedia.com/articles/fundamental-analysis/10/creative-accounting-balance-sheet.asp
NEW QUESTION # 126
Organizations that had external audits actually had higher median losses and longer lasting fraud schemes than those organizations that were not audited.
- A. False
- B. True
Answer: B
NEW QUESTION # 127
Which of the following is a TRUE statement about counterfeit payment cards?
- A. Counterfeit payment cards can be created with blank plastic cards.
- B. The hologram on payment cards is relatively simple to reproduce.
- C. The production of counterfeit payment cards is too complicated for the use of high-speed printers.
- D. All of the above are true statements about counterfeit payment cards.
Answer: A
NEW QUESTION # 128
Depreciation is especially applicable when companies try to overvalue their assets and net worth; the lower their depreciation expense, the higher the company's profits.
- A. False
- B. True
Answer: B
NEW QUESTION # 129
Which of the following is an example of a technical security control that organizations can use to secure computer systems and communication networks?
- A. Penetration testing
- B. Human audits
- C. Data security
- D. Application security
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Technical security controls include software- and hardware-based measures such as application security, firewalls, and encryption. Application security protects against vulnerabilities in the programs employees use.
* Analysis of Incorrect Options:
* B. Human audits - Administrative control, not technical.
* C. Penetration testing - A detective measure/test, not a control itself.
* D. Data security - A broad goal, not a specific technical control.
* Key Concept: Technical security controls for preventing cyberfraud.
Reference: ACFE Fraud Examiners Manual (2020), Computer and Internet Fraud: Security Controls.
NEW QUESTION # 130
Which of the following is an example of a cash larceny scheme?
- A. Paul sold insurance policies to individuals but never filed the policies with the insurance company. He then stole the customers' payments, which he was able to do because the insurance company did not know the policies existed.
- B. Emily is an accounts receivable clerk. She stole Customer A's monthly payment. When Customer B's payment arrived, she applied it to Customer A's account. When Customer C's payment arrived, she applied it to Customer B's account.
- C. Sarah returned a $250 mirror to the store. Jenna, the cashier, recorded a $350 return on the cash register and kept the remaining $100.
- D. Mark, a cashier, knew the access code for Joe's cash register. He logged in as Joe and processed transactions as usual. He then took $50 from the register at the end of his shift.
Answer: D
NEW QUESTION # 131
Which of the following fraud schemes is MOST LIKELY to target a neighborhood of immigrants?
- A. Affinity fraud
- B. Social control scheme
- C. Bait and switch scheme
- D. Advance-fee fraud
Answer: D
NEW QUESTION # 132
Jones is an accounts payable clerk at Smith Company. He intentionally sent the wrong vendor a check for some supplies. He then called the vendor, explained his "mistake", and requested that the vendor mail back the check. Jones then intercepted the returned check and deposited it in his own account. What type of scheme did he commit?
- A. An altered payee scheme
- B. A pay and return scheme
- C. A shell company scheme
- D. A pass-through scheme
Answer: B
Explanation:
Explanation/Reference: https://www.gma-cpa.com/blog/billing-schemes-3-ways-fraudsters-can-cash-in-on-your-nonprofit#:~:text=Also%20known%20as%20a%20%E2%80%9Cpay,doesn't%20know%20it's%20occurring
NEW QUESTION # 133
Which of the following is TRUE regarding accrual-basis accounting?
- A. Expenses are recorded in the accounting system when they are paid.
- B. Revenues are generally recognized when goods are delivered to a customer.
- C. Accrual-basis accounting is simpler to use than cash-basis accounting.
- D. The accrual-basis method focuses on tracking a company's current cash flow.
Answer: B
NEW QUESTION # 134
Which of the following statements describes a best practice for preventing contract and procurement fraud?
- A. Companies should conduct background checks on all vendors before they are added to the vendor master file.
- B. Companies should have vendor-monitoring procedures that address the red flags of all vendor schemes.
- C. Companies should restrict the monitoring of their procurement activities to once a year to ensure comparability from year to year.
- D. Companies should permit the person who maintains the vendor master file to also have authority to approve payments for invoices.
Answer: A
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: Conducting vendor background checks before adding them to the master file is a strong preventive control against shell companies, conflicts of interest, and vendor collusion. It helps ensure vendor legitimacy before business begins.
* Analysis of Incorrect Options:
* B - Too broad; monitoring should focus on practical red flags, not "all schemes."
* C - Violates segregation of duties, increasing fraud risk.
* D - Monitoring should be ongoing, not limited to once a year.
* Key Concept: Procurement fraud prevention through vendor due diligence and segregation of duties.
Reference: ACFE Manual, Corruption - Contract and Procurement Fraud Controls.
NEW QUESTION # 135
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The CFE-Financial-Transactions-and-Fraud-Schemes certification exam covers various topics related to detecting and preventing fraud in financial transactions. These topics include but are not limited to financial statement fraud, asset misappropriation, bribery and corruption, money laundering, and cybercrime. CFE-Financial-Transactions-and-Fraud-Schemes exam is designed to assess the candidate's knowledge of fraud schemes, understanding of accounting principles and financial statements, and ability to conduct fraud investigations.
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