Practice Questions Flashcards

Under the ACFE's Fraud Tree, which category does expense reimbursement fraud fall under?

Answer: Asset Misappropriation

Expense reimbursement fraud is a form of asset misappropriation under the fraudulent disbursements branch.

A shell company scheme is best described as:

Answer: Submitting invoices from a fictitious vendor controlled by the fraudster

A shell company scheme involves creating a fake vendor entity to submit fraudulent invoices and divert payments.

Which analytical technique compares an organization's financial ratios to industry benchmarks to identify anomalies?

Answer: Ratio analysis

Ratio analysis compares financial metrics to industry norms or historical data to identify potential fraud indicators.

The Foreign Corrupt Practices Act (FCPA) primarily prohibits U.S. companies from:

Answer: Bribing foreign government officials to obtain business

The FCPA prohibits U.S. persons and companies from paying bribes to foreign officials to obtain or retain business.

Which element is NOT required to prove occupational fraud in a civil case?

Answer: The perpetrator had a prior criminal record

Prior criminal history is not a required element of civil fraud; the elements focus on the act, reliance, and resulting harm.

When a fraudster intercepts an incoming check and deposits it into their own account, this is called:

Answer: Stolen checks

Stolen check schemes occur when an employee intercepts checks payable to the employer and converts them for personal use.

Which of the following best defines a 'red flag' in fraud examination?

Answer: An indicator that suggests fraud may be present but does not prove it

A red flag is a warning sign or indicator that may suggest fraud but requires further investigation to confirm.