ACFE Certified Fraud Examiner (CFE) Exam Prep FREE Sample Exam

Treating a routine repair as a capital asset rather than an expense will have which immediate effect?

Understate assets and overstate expenses

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Have no effect on net income

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Understate liabilities

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Overstate assets and understate current expenses

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A buyer repeatedly specifies a brand only one favored vendor supplies, without a business justification, and that vendor wins at high prices. As a disbursement risk, this may facilitate:

Competitive bidding among many suppliers

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A billing or kickback arrangement by steering purchases to a cooperating vendor

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Lower total cost through standardization proven by the prices

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A register disbursement scheme

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Two competing bidders agree in advance which of them will submit the low bid on each project, rotating wins. This is:

Bid rigging through bid rotation

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A joint venture disclosed to the buyer

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Complementary purchasing

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A conflict of interest by an employee

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Why should evaluators document strengths, weaknesses, and the basis for scores contemporaneously?

Contemporaneous records make the decision auditable and make post hoc rationalization of a steered award harder

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Documentation guarantees the favored vendor wins

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Scores are never reviewed after award

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Written records replace the need for conflicts screening

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A client’s in-house counsel obtains records from a third-party payroll provider through a court-issued subpoena and gives them to the examiner. What should the examiner record on receiving them?

Nothing, because subpoenaed records need no tracking

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The source, the legal process by which they were obtained, the date received, and an inventory, entering them into custody like any other evidence

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Only a summary of the interesting pages

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A note that the records are automatically privileged

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Which conduct plainly crosses a legal and ethical boundary in a workplace interview?

Asking the employee about their duties

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Taking notes during the conversation

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Threatening physical harm or promising legal immunity the examiner cannot grant to obtain statements

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Scheduling the interview during work hours

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An interviewee demands to bring their personal lawyer into a company internal interview at company expense. What is the general position?

The company must pay for the lawyer

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The interview must be cancelled permanently

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The employee may consult their own counsel at their own expense, but company counsel does not represent them and the company generally controls its own interview process with counsel's guidance

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The employee's lawyer may direct the company's investigation

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What should a victim company weigh when deciding whether to file a civil fraud suit against a judgment-proof former employee?

Nothing, because every judgment is automatically paid by the court

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Only the emotional satisfaction of filing

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Whether the examiner wants additional billable work

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Collectability: even a successful judgment has limited value if the defendant lacks assets or income to satisfy it, weighed against deterrence, insurance, and other recovery paths

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Counsel for a client asks the examiner who prepared a factual report to join settlement talks and argue aggressively that the other side’s executive is a liar who should pay triple. What boundary should the examiner maintain?

Take the advocacy role because the examiner knows the facts best

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Stay within the examiner's role of presenting factual findings and analysis, declining to become an advocate whose credibility depends on a negotiated outcome

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Argue as requested but omit the role from any engagement records

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Threaten the other side with criminal referral to force settlement

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Proactive fraud audits differ from routine internal audits in that they:

Are performed only after allegations arise

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Deliberately hunt for indicators of specific fraud schemes in high-risk data and processes before any allegation exists

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Focus exclusively on financial statement opinion work

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Are announced years in advance in all cases

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An assessment identifies a scheme in which a buyer creates a shell vendor and approves its invoices. Reviewers then list vendor-master change approvals, independent address and bank-detail verification, and segregation between vendor creation and payment approval next to the scenario. What activity are the reviewers performing?

Conducting a disciplinary review of the buyer

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Calculating the organization's overall risk appetite

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Mapping existing controls to the specific steps of the identified scheme to see where it would be prevented or detected

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Closing the risk because controls have been listed

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Two similar expense-fraud allegations in different divisions were handled very differently: one preserved records immediately and used trained investigators, the other confronted the subject first and lost key documents. What program weakness does this reveal?

The divisions have different expense policies by design

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Expense fraud is too minor to justify any protocol

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The second division's manager should be given sole authority over future cases

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Investigation protocols are not standardized or followed across the organization, undermining consistency, evidence quality, and fairness

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ACFE Certified Fraud Examiner (CFE) Exam Prep FREE Sample Exam — Fixed Set

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