CBA Fraud Examination and Prevention

Question 1

What is the primary purpose of a fraud risk assessment in banking?

Accepted Answer

To identify and evaluate the likelihood and impact of potential fraud schemes

Answer

To calculate the total annual dollar loss from past fraud incidents

Answer

To determine staffing requirements for the fraud examination department

Answer

To assess customer satisfaction with existing fraud prevention measures

Question 2

According to the ACFE Fraud Triangle, which three elements must all be present for occupational fraud to occur?

Accepted Answer

Pressure, opportunity, and rationalization

Answer

Motivation, rationalization, and capability

Answer

Greed, access, and deception

Answer

Intent, means, and motive

Question 3

Which type of bank fraud involves an employee creating fictitious loans to generate fraudulent commissions or misappropriate proceeds?

Accepted Answer

Loan origination fraud

Answer

Check kiting

Answer

Identity theft

Answer

Embezzlement through payroll manipulation

Question 4

What is 'check kiting' in the banking context?

Accepted Answer

Exploiting float time between banks to artificially inflate account balances

Answer

Forging endorsement signatures on checks

Answer

Stealing blank checks from a customer's checkbook

Answer

Altering the dollar amount on a check after it has been issued

Question 5

Which internal control is most effective at preventing unauthorized wire transfers?

Accepted Answer

Dual control requiring two authorized individuals to initiate and approve each transfer

Answer

Monthly reconciliation of wire transfer accounts

Answer

Annual fraud awareness training for all wire transfer employees

Answer

Quarterly external auditor review of all wire transfer transactions

Question 6

Which behavioral red flag most commonly indicates potential employee embezzlement at a bank?

Accepted Answer

An employee living beyond apparent financial means who refuses to take vacation

Answer

An employee who consistently takes all scheduled vacation days

Answer

A teller who processes a high volume of customer transactions daily

Answer

An employee who frequently asks questions about internal audit procedures

Question 7

What is the primary role of a Certified Fraud Examiner (CFE) during a bank internal audit engagement?

Accepted Answer

To investigate suspected fraud, gather evidence, and support potential legal or disciplinary action

Answer

To approve all transactions above a defined dollar threshold

Answer

To manage insurance claims submitted for fraud-related losses

Answer

To conduct customer-facing fraud awareness training sessions