Conducting Investigations 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 Conducting Investigations flashcards as text
In fraud investigations, the term 'chain of custody' refers to:
Answer: The documented chronological record of evidence handling from collection to court
Chain of custody documents every person who handled the evidence, ensuring its integrity and admissibility in legal proceedings.
A fraud examiner conducting a cognitive interview would MOST likely ask the subject to:
Answer: Recall events in reverse chronological order to stimulate memory
The cognitive interview technique includes recalling events in different orders (including reverse) to enhance memory retrieval.
Which of the following BEST describes a 'pretext' in the context of fraud investigations?
Answer: Misrepresenting one's identity or purpose to gather information
A pretext involves using a false identity or pretense to obtain information, which raises significant legal and ethical concerns.
When interviewing a subject who invokes their Fifth Amendment right against self-incrimination in an internal investigation, the fraud examiner should:
Answer: Consult legal counsel and document the invocation
Consulting legal counsel and documenting the invocation is the appropriate response to protect the investigation and the organization's legal position.
A net worth analysis in a fraud investigation is primarily used to:
Answer: Identify unexplained increases in a subject's wealth beyond known income
Net worth analysis compares a subject's assets and liabilities over time to identify wealth increases that cannot be explained by legitimate income.
Which of the following is an example of direct evidence in a fraud case?
Answer: A witness testifying they personally saw the suspect alter a check
Direct evidence proves a fact without requiring any inference, such as eyewitness testimony of the act itself.
During a financial statement fraud investigation, an examiner identifies that revenue appears to be significantly overstated. The MOST appropriate analytical technique to use initially would be:
Answer: Horizontal analysis comparing revenue trends over multiple periods
Horizontal analysis across multiple periods reveals unusual trends or anomalies in revenue recognition that may indicate manipulation.