Bribery and Corruption Flashcards
7 cards from real CFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bribery and Corruption flashcards as text
A city council member votes to award a construction contract to a firm after receiving concealed campaign contributions from the firm's owner. This BEST describes which corruption scheme?
Answer: Political corruption through improper campaign contributions
Using concealed campaign contributions to influence an official vote on a government contract constitutes political corruption, a form of public sector bribery.
Which of the following is the MOST effective internal control to prevent bribery in a company's procurement function?
Answer: Mandatory rotation of procurement personnel and segregation of contract approval duties
Personnel rotation disrupts established corrupt relationships while segregation of duties prevents any single employee from both selecting vendors and approving payments.
Under the FCPA's internal controls provision, which type of company is subject to the requirement?
Answer: Issuers whose securities are registered with the SEC or required to file reports with the SEC
The FCPA's internal controls provisions apply to 'issuers,' meaning companies whose securities are registered under or required to file reports with the SEC.
An employee is told by a foreign customs official that goods will be held indefinitely unless a payment is made to release them. This BEST illustrates:
Answer: Economic extortion
When a public official demands payment under threat of harm or withholding a service, it constitutes economic extortion rather than voluntary bribery.
A fraud examiner reviewing contracts notices a vendor consistently wins bids by exactly 1% below the next lowest competitor. This pattern MOST suggests:
Answer: The winning vendor has access to competitors' confidential bid information through a corrupt insider
Consistently winning by a narrow margin that closely tracks competitors' bids strongly suggests bid leakage—an insider is sharing competitor pricing with the winning vendor.
Which of the following is the ACFE's recommended first step when a fraud examiner suspects a bribery scheme but lacks direct evidence?
Answer: Conduct a detailed lifestyle analysis of suspected employees
Lifestyle analysis—comparing known income to observed spending and assets—can reveal unexplained wealth that suggests undisclosed bribery income without tipping off the suspect.
In the context of corruption, 'state capture' refers to:
Answer: When private entities corrupt government processes to shape laws and regulations in their favor
State capture describes a systemic form of grand corruption where private interests subvert government institutions to obtain favorable policies, laws, or contracts.