Certified Fraud Examiner (CFE) MCQ 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 Certified Fraud Examiner (CFE) MCQ flashcards as text
An employee steals cash before it is recorded in the company's accounting system. This is an example of which fraud scheme?
Answer: Skimming
Skimming is an off-book fraud where cash is stolen before it is recorded in the accounting system, making it harder to detect.
In occupational fraud, which department most commonly perpetrates billing schemes?
Answer: Accounts payable
Accounts payable employees have access to the payment process, making them the most common perpetrators of billing schemes.
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from doing which of the following?
Answer: Bribing foreign government officials to obtain business
The FCPA makes it illegal for U.S. persons and companies to bribe foreign government officials to obtain or retain business.
Which of the following best describes 'lapping' in the context of accounts receivable fraud?
Answer: Concealing a cash theft by misapplying subsequent customer payments
Lapping conceals theft of a customer's payment by applying a later customer's payment to the first account, creating a perpetual cover-up chain.
Which of the following is a PRIMARY objective of a fraud risk assessment?
Answer: Identifying inherent fraud risks and evaluating controls
A fraud risk assessment aims to identify where fraud could occur and evaluate the effectiveness of existing controls to mitigate those risks.
Under which evidentiary rule would a fraud examiner's interview notes most likely be protected from opposing counsel's discovery in a U.S. civil case?
Answer: Work product doctrine
The work product doctrine protects documents and notes prepared by or at the direction of an attorney in anticipation of litigation from opposing discovery.
Which ratio is most useful for detecting potential inventory fraud that inflates reported profits?
Answer: Gross margin ratio
An unusually high or fluctuating gross margin ratio can signal inventory overstatement, since inflating inventory reduces cost of goods sold and boosts reported margins.