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ACFE CFE Financial Transactions and Fraud Schemes Certified Fraud Examiner – Financial Transactions and Fraud Schemes Exam Online Training

Question #1

One reason employees might be hesitant to use PO boxes in shell company schemes is that some businesses are specially vary of sending checks to vendors that have street addresses only.

  • A . True
  • B . False

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Correct Answer: B
Question #2

Another way to eliminate competition in the solicitation phase of the selection process is to:

  • A . Solicit bid from fictitious suppliers
  • B . Solicit transaction from fictitious vendors
  • C . Solicit bid-splitting from fictitious vendors
  • D . None of the above

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Correct Answer: A
Question #3

_________ assumes the business will go on indefinitely in the future.

  • A . Materiality
  • B . Going concern
  • C . Cost
  • D . Fair value

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Correct Answer: B
Question #4

According to SAB 104, for the revenue to be typically considered realized or realizable and earned, which of the following criteria is NOT met:

  • A . Persuasive evidence of an arrangement exists
  • B . Services has been rendered
  • C . Timings have been met
  • D . Collectability is reasonably assured

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Correct Answer: C
Question #5

The person or persons who have access to __________ are often the targets of unethical

vendors seeking an advantage in the process.

  • A . Bid-splitting
  • B . Sealed bids
  • C . General purchasing
  • D . Tailor specifications

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Correct Answer: B
Question #6

A typical issue involving material and fraud would be:

  • A . Fraudulent statement
  • B . Misappropriations
  • C . Civil lawsuit
  • D . Quality control

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Correct Answer: B
Question #7

A technique by which checks are numbered using a new technique that is revealed by a colored highlighter pen or by a bright light held behind the check is called:

  • A . Microline numbering
  • B . Holographic safety border
  • C . Embossed pearlescent numbering
  • D . None of the above

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Correct Answer: B
Question #8

___________ is to allow the owner, investors, creditors and others with an interest to know

the appropriate book worth of the business at a particular date.

  • A . Equity
  • B . Balance sheet
  • C . Income statement
  • D . Financial record

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Correct Answer: B
Question #9

Which of the following search is used for unusually high incidence of returns and allowances scheme?

  • A . Allowances by vendors
  • B . Disposals of allowances than reorders
  • C . Returns and allowances
  • D . None of the above

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Correct Answer: C
Question #10

The amount of cash on hand in a register may be compared to the amount showing in the register tape in order to detect _______.

  • A . Employee theft
  • B . Recorded sales
  • C . Internal audits
  • D . Occupational frauds

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Correct Answer: A

Question #11

CORRECT TEXT

_________ is defined as a person who works for the victim organization and who is primary

culprit

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Correct Answer: Principal perpetrator
Question #12

One final means of concealing a register scheme, as with many kinds of fraud, is to destroy all records of the transaction.

  • A . True
  • B . False

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Correct Answer: A
Question #13

According to Marshall, ______ are probable future economic benefits obtained or

controlled by a particular entity as a result of past transactions or events.

  • A . Assets
  • B . Liabilities
  • C . Credentials
  • D . None of above

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Correct Answer: A
Question #14

When situational pressures and perceived opportunities are low and personal integrity is high, occupational fraud is much more likely to occur than when the opposite is true.

  • A . True
  • B . False

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Correct Answer: B
Question #15

Larceny is the scheme in which an employee simply takes inventory from the company premises without attempting to conceal it in the books and records.

  • A . True
  • B . False

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Correct Answer: A
Question #16

Physical tampering prevention is a check tampering technique that is used to secure bank assisted controls.

  • A . True
  • B . False

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Correct Answer: B
Question #17

Maintain the presence of a manager or supervisor near the area of the cash register as a deterrent to theft is a prevention for:

  • A . Fraudulent statement scheme
  • B . Asset misappropriation scheme
  • C . Larceny scheme
  • D . Register disbursement scheme

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Correct Answer: D
Question #18

People commit financial statement fraud to:

  • A . Conceal false business performances
  • B . Preserve personal status/control
  • C . Maintain personal income
  • D . Stand outside the accounting system

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Correct Answer: B
Question #19

Delivery has not occurred or services have not been rendered when:

  • A . Until installation and customer testing and acceptance has occurred.
  • B . A written order exists but contains a right of return.
  • C . Both A & B
  • D . Neither A nor B

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Correct Answer: B
Question #20

_____________ involves purposeful misreporting of financial information about the

organization that is intended to mislead those who read it.

  • A . Fraudulent statement
  • B . Corruption
  • C . Asset misappropriations
  • D . None of above

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Correct Answer: A

Question #21

A process by which several bidders conspire to split contracts up and ensure that each gets a certain amount of work is called:

  • A . Bid opening
  • B . Fictitious Bidding
  • C . Bid pooling
  • D . Bid log

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Correct Answer: C
Question #22

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 . True
  • B . False

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Correct Answer: A
Question #23

Verify supporting documentation on outstanding checks written for a material amount is a test used to conduct for:

  • A . Check disbursement
  • B . Bank confirmation
  • C . Bank confirmation
  • D . Cut-off statements

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Correct Answer: C
Question #24

____________ is a process by which a bookkeeper records all transactions and can adjust

the books.

  • A . Journal Entries
  • B . Accounting Cycle
  • C . Financial statement
  • D . None of all

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Correct Answer: A
Question #25

The act of an official or fiduciary person who unlawfully and wrongfully uses his station or character to procure some benefit, contrary to duty and rights of others is called:

  • A . Conflict of interest
  • B . Corruption
  • C . Bribery
  • D . Overbilling

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Correct Answer: B
Question #26

A shell company scheme in which actual goods or services are sold to the victim company is known as:

  • A . Maintenance scheme
  • B . Allocation scheme
  • C . Distribution scheme
  • D . Pass-through scheme

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Correct Answer: D
Question #27

How many accounts are affected in fraudulent accounting entries and therefore same

number of categories on the financial statement?

  • A . One
  • B . At least two
  • C . More than two
  • D . None of above

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Correct Answer: A
Question #28

Which of the following is NOT the method for stealing inventory and other assets?

  • A . Larceny schemes
  • B . Asset requisition and transfer
  • C . Purchasing and receiving schemes
  • D . Sales & Equipment handling

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Correct Answer: D
Question #29

Assets that are long-lived and that differ from property, plant and equipment hat has been purchased outright or acquired under a capital lease are:

  • A . Tangible Assets
  • B . Intangible Assets
  • C . Forced Assets
  • D . None of above

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Correct Answer: B
Question #30

Bank statement are diligently reviewed to ensure that amounts and signature have not been altered, is an activity for:

  • A . Account analysis
  • B . Bank reconciliation
  • C . Check disbursement controls
  • D . Check tampering

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Correct Answer: C

Question #31

The behavior profile of employees who are involved in bribery schemes may include:

  • A . Gambling habit
  • B . Extravagant lifestyle
  • C . Drug and/or alcohol addiction
  • D . All of the above

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Correct Answer: D
Question #32

________ increase assets and expenses and/or decrease liabilities and/or equity

  • A . Journal Entries
  • B . Debit
  • C . Credit
  • D . None of all

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Correct Answer: B
Question #33

A voucher is:

  • A . a file that includes the purchase order that was send to the vendor, the vendor invoice listing the cost and quantity of items purchased, and the internal receiving reports that verify the purchased items have been delivered.
  • B . a figure that includes the sale order that was send to the dealer, the vendor invoice
    listing the cost and quantity of items sold, and the internal receiving reports that verify the
    purchased items have been delivered.
  • C . a report that includes the purchase order that was send to the vendor, the vendor invoice listing the quality and quantity of items purchased, and the external receiving reports that verify the items have been sold.
  • D . a mammogram that includes the purchase order that was send to the purchaser, the purchaser invoice listing the benefits and quantity of items purchased, and the internal receiving reports that verify the purchased items have been sold.

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Correct Answer: A
Question #34

If the assets are intentionally purchased by the company but simply misappropriated by the fraudster, this is referring to as:

  • A . Inventory larceny scheme
  • B . Asset receiving scheme
  • C . Fraudulent purchase
  • D . Falsify shipping

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Correct Answer: A
Question #35

Which are check tempering frauds in which an employee prepares a fraudulent check and submits it usually along with legitimate checks to an authorized maker who signs it without a proper review?

  • A . Endorse check scheme
  • B . Legitimate check scheme
  • C . Payable check scheme
  • D . Concealed check scheme

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Correct Answer: D
Question #36

Employees with the authority to grant discounts in order to skim revenues may use which authority?

  • A . False discounts
  • B . Recording a discount on sale procedure
  • C . Internal discount sales audits
  • D . None of the above

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Correct Answer: A
Question #37

Skimming is:

  • A . The removal of cash from a victim entity prior to its entry in an accounting system.
  • B . The addition of cash from a victim entity prior to its entry in an accounting system.
  • C . The removal of cash from a victim entity after its entry in an accounting system.
  • D . None of above

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Correct Answer: A
Question #38

The principal way to detect omitted credits from books of account is through:

  • A . Forced Balance
  • B . Trend analysis
  • C . Expense account
  • D . None of all

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Correct Answer: B
Question #39

CORRECT TEXT

___________ allows the fraud examiner to inspect key attributes on a smaller portion (or

sample) of those documents.

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Correct Answer: Statistical sampling
Question #40

Which of the following offender types in which people who take the money and run away?

  • A . Absconders
  • B . Long-term violators
  • C . Offender types
  • D . None of the above

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Correct Answer: A

Question #41

CORRECT TEXT

The _______________ cost method of pricing would carry an asset’s value on the financial

statements as what it would currently cost, considering inflation.

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Correct Answer: Price-level adjusted historical cost
Question #42

The scheme which reduces victim companies to issue fraudulent payments for goods or services that they have not received is called:

  • A . Bogus claims
  • B . Billing scheme
  • C . Reliance billing
  • D . Misappropriate claims

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Correct Answer: A
Question #43

The most common method for billing scheme is:

  • A . Register
  • B . Tips
  • C . Accident
  • D . None of the above

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Correct Answer: B
Question #44

CORRECT TEXT

One of the simplest ways to justify unacceptable conduct and avoid guilt feelings is to invent a good reason for ________.

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Correct Answer: Embezzling
Question #45

Which of the following method is NOT used to detect conflicts of interest?

  • A . Tips & Complaints
  • B . Review of vendor ownership files
  • C . Underbillings of assets
  • D . Interviews with purchasing personnel

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Correct Answer: C
Question #46

Which check tampering red flag may indicate employees have embezzled cash and charged the embezzlement to expense accounts?

  • A . Voided checks
  • B . Payable checks
  • C . Missing checks
  • D . Duplicate checks

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Correct Answer: C
Question #47

In physical tampering prevention technique, hidden images can be seen only when the check is held at an angle through:

  • A . High-resolution sprays
  • B . Holographic safety inks
  • C . Watermark backers
  • D . Chrome coloring

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Correct Answer: C
Question #48

Physical assets including _________ and ________ are the most commonly

misappropriated noncash asset in our study.

  • A . Interest & Collusion
  • B . Inventory & Equipment
  • C . Inventory & Purchase
  • D . Sales & Equipment

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Correct Answer: B
Question #49

One final means of concealing a register scheme, as with many kinds of fraud, is to destroy all records of the transaction.

  • A . True
  • B . False

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Correct Answer: A
Question #50

__________ can be defined as conduct detrimental to the organization and to the

employee.

  • A . Employee deviance
  • B . Employee theft
  • C . Employee fraud
  • D . All of the above

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Correct Answer: A

Question #51

The most common method for billing scheme is:

  • A . Register
  • B . Tips
  • C . Accident
  • D . None of the above

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Correct Answer: B
Question #52

Which check tampering red flag may indicate employees have embezzled cash and charged the embezzlement to expense accounts?

  • A . Voided checks
  • B . Payable checks
  • C . Missing checks
  • D . Duplicate checks

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Correct Answer: C
Question #53

_________ revenues involve the recording sales of goods or services hat did not occur.

  • A . Fictitious or fabricated revenues
  • B . Financial revenues
  • C . Red flag revenues
  • D . Concealed revenues

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Correct Answer: A
Question #54

In which phase of competitive bidding process, fraudsters attempt to influence the selection of a contractor by restricting the pool of competitors from whom bids are sought?

  • A . Need recognition
  • B . Solicitation
  • C . False specification
  • D . Submission

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Correct Answer: B
Question #55

When an incorrect total is carried from the journal to the ledger or from ledger to the financial statements, this method is called:

  • A . Forced Balance
  • B . Out-of-balance
  • C . False balance
  • D . None of all

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Correct Answer: A
Question #56

The excess credits (or debits) on the income statement are used to decrease (or increase) the equity account.

  • A . True
  • B . False

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Correct Answer: B
Question #57

__________ may be defined as the offering, giving, receiving or soliciting anything of value

to influence an official act.

  • A . Corruption
  • B . Diverting business to vendors
  • C . Bribery
  • D . Lacking approval authority

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Correct Answer: C
Question #58

The forms that allow noncash assets to be moved from one location in a company to another can be used to facilitate the misappropriation of those assets are called:

  • A . Inventory usages
  • B . Fake sales
  • C . Asset requisition
  • D . All of the above

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Correct Answer: C
Question #59

Which of the following are used in a short term skimming scheme?

  • A . Unrecorded sales, understated sales and theft of incoming checks
  • B . Unrecorded sales, understated sales and dual endorsements
  • C . False company accounts, understated sales and theft of incoming checks
  • D . Understated sales, theft of incoming checks and check-for-currency substitutions

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Correct Answer: A
Question #60

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 . Conflict of interest in sale
  • B . Turnaround sale or flip
  • C . Unauthorized sale
  • D . Written sale of unique assets

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Correct Answer: B
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