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The CFE-Investigation Exam is designed for professionals who work in the field of fraud investigation, including law enforcement officials, internal auditors, forensic accountants, and private investigators. CFE-Investigation exam covers a wide range of topics related to fraud investigation, including financial transactions, interviewing techniques, and legal issues.
NEW QUESTION # 96
Which of the following is a reason why a subject's credit card records and statements can be useful in tracing investigations?
- A. Credit card statements provide insight into the subject's litigation history
- B. Credit card records can provide leads to help identify a subjects hidden assets
- C. Credit card statements show the source of the funds used to pay a credit card bill.
- D. Credit card records can show signs that the subject has skimmed funds.
Answer: B
NEW QUESTION # 97
Which of the following is FALSE regarding link analysis?
- A. Link analysis is a poor tool to use for investigating a money laundering scheme
- B. Link analysis helps identify indirect relationships with several degrees of separation
- C. Link analysis can be used to map connections between entities that share an address
- D. Link analysis is an effective tool for demonstrating complex networks
Answer: A
Explanation:
The manual explains:
"Link analysis is very effective for identifying indirect relationships... and is particularly useful when conducting a money laundering investigation because it can track the placement, layering, and integration of money" .
Therefore, statementA is false, making it the correct choice.
NEW QUESTION # 98
Mila, a Certified Fraud Examiner (CFE), needs to obtain court records and wants to be as sure as possible that the records are accurate. In most countries the most reliable way to obtain these documents is to obtain them directly from the court authorities
- A. True
- B. False
Answer: A
NEW QUESTION # 99
Eugene is conducting an admission-seeking interview of a suspect. During the interview, the suspect frequently looks away from Eugene while responding to questions. Eugene can safely conclude that the suspect is dishonest due to his failure to maintain eye contact.
- A. True
- B. False
Answer: B
Explanation:
TheCFE Prep - Investigationswarns against relying solely on eye contact:
"Behavioural clues are harder to read ... Additionally, racial, ethnic, and economic factors should be carefully considered when observing a respondent's behaviour. Some cultures, for example, discourage looking directly at someone. Other cultures use certain body language that might be misinterpreted." Therefore, lack of eye contactcannot safely be taken as proof of dishonesty.
NEW QUESTION # 100
Which of the following is a reason why a person or organization might engage a fraud examiner to trace illicit transactions?
- A. An entity needs to find hidden relationships in big data that otherwise would not be discovered.
- B. A victim of fraud wants to facilitate the recovery of criminal proceeds.
- C. An employer wants to know if an employee is falsifying regulatory reports
- D. An attorney wants to evaluate an expert's financial report
Answer: B
Explanation:
TheFraud Examiners Manualnotes:
* "Fraud examiners are often tasked with tracing illicit transactions... For example, a victim of fraud might want a tracing search to facilitate the recovery of criminal proceeds".
NEW QUESTION # 101
Which of the following is NOT a step a fraud examiner must take before seizing evidence in a digital forensic investigation?
- A. Ensure that only trained professionals employ any software used in a forensic capacity
- B. Obtain and become familiar with any legal orders that apply to the investigation
- C. Determine whether there are privacy issues related to the item(s) to be searched.
- D. Assemble an investigation team comprised only of outside digital forensic experts
Answer: D
Explanation:
TheFraud Examiners Manuallists required steps before seizing evidence:
* Obtain legal authority.
* Review privacy issues.
* Ensure software/hardware are validated.
* Document surroundings, inspect for traps, image drives, etc.
There isno requirementto assemble a team exclusively of outside experts.
Before seizing evidence in adigital forensic investigation, the2014 International Fraud Examiners Manual outlines several critical steps:
* Obtain legal authority / review orders:
"Before obtaining evidence, ensure that there is legal authority to seize evidence and review the data associated with the evidence. This might require obtaining a warrant in a criminal matter or ensuring that internal policies authorise seizure for an internal investigation."
* Determine privacy issues:
"Before the fraud examiner can seize evidence, he must take certain steps to help ensure that the evidence will be admissible: He must determine whether there are any privacy interests in the item(s) to be searched...
In every case where it becomes necessary to seize a computer or other device capable of storing digital evidence, the investigator should consult with legal counsel."
* Use only trained professionals/software:
"It is important to allow a trained examiner to conduct a proper seizure and examination of digital evidence to help ensure that the information can be used in a legal proceeding."
#These are allvalid required steps.
In contrast, the idea that the team must be composedonly of outside digital forensic expertsisNOT a required step. The Manual stresses flexibility in team composition:
"Some organisations have their own in-house personnel... while others might prefer the use of an outside examiner. Sometimes retrieving digital data is as easy as searching the target computer's hard drive, but other times retrieval requires a thorough knowledge of computers." Thus, requiringonly outside expertsis not a standard step, since investigations may useinternal, external, or a mixof specialists depending on the situation.
NEW QUESTION # 102
Beta, a Certified Fraud Examiner (CFE). is conducting an admission-seeking interview of Gamma, a fraud suspect. After Beta gave Gamma an appropriate rationalization for his conduct, Gamma continued his denials, giving various alibis. These alibis can usually be diffused by all of the following techniques EXCEPT:
- A. Downplaying the strength of the evidence
- B. Discussing Gamma's prior deceptions
- C. Displaying physical evidence
- D. Discussing the testimony of witnesses
Answer: A
NEW QUESTION # 103
Which of the following statements would be IMPROPER if included in the fraud examination report of a Certified Fraud Examiner (CFE) who is also qualified as an accounting expert?
- A. "From my examination, it appears that the company's financial statements were not presented in accordance with generally accepted accounting principles "
- B. "The company's internal controls were wholly inadequate to prevent this type of violation and should be remediated at the earliest possible time."
- C. "The evidence shows that expenses in excess of $5 million were omitted from the company's financial statements "
- D. "Based on statements the suspect made to me. it is my assessment that the suspect has a dishonest disposition."
Answer: D
Explanation:
Fraud examiners mustnot opine on guilt, innocence, intent, or disposition. Reports should focus onfacts and expert conclusions within their field. The Manual stresses:
"The fraud examiner should refrain from expressing opinions as to the guilt or innocence of any person or entity. Such conclusions are reserved for the trier of fact" (Fraud Examiners Manual, Reporting section).
Options A, B, and D relate toaccounting and internal control assessments, which fall within an accounting expert's scope. OnlyCis improper because it speculates about the suspect's character or intent, which is outside the CFE's role.
NEW QUESTION # 104
If you are seizing a computer for forensic analysis, why is it generally necessary to seize any copiers connected to it?
- A. Most copiers today are nonimpact copiers, meaning that they store copied images indefinitely.
- B. Most copiers store, process, and transmit data m a cloud environment
- C. Many copiers connect via parallel cables, which store and transmit copy job data.
- D. Many copiers have internal hard drives that might contain information relevant to a fraud examination
Answer: D
Explanation:
The2014 International Fraud Examiners ManualandCFE Prep - Investigationsexplicitly state:
"Like some printers, copiers and other multifunction machines might have internal storage devices that store relevant data. In fact, almost every copier built since 2002 has a hard drive that stores images of documents the machines have copied, scanned, or emailed. Some copiers store user access records and a history of copies made. ... when seizing a computer for forensic analysis, it is generally necessary to seize any copiers and scanners connected to it." Thus, the correct answer isC.
NEW QUESTION # 105
Cynthia is preparing to conduct a covert investigation Prior to conducting surveillance of her subject, she creates a memorandum outlining the basis for her operation. Which of the following pieces of information should she Include In her memorandum?
- A. Her first impression regarding the subject's culpability
- B. All of the above
- C. The name of the subject she will be observing
- D. The identities of any confidential sources to be used in the operation
Answer: B
NEW QUESTION # 106
Beta, a Certified Fraud Examiner (CFE). is conducting an admission-seeking interview of Gamma, a fraud suspect. After Beta gave Gamma an appropriate rationalization for his conduct, Gamma continued his denials, giving various alibis. These alibis can usually be diffused by all of the following techniques EXCEPT:
- A. Displaying physical evidence
- B. Discussing the testimony of witnesses
- C. Downplaying the strength of the evidence
- D. Discussing Gamma's prior deceptions
Answer: D
Explanation:
During admission-seeking interviews, when suspects persist with denials or alibis, examiners are trained to diffuse them. Accepted techniques include:
* Discussing testimony of witnesses,
* Displaying physical evidence, and
* Downplaying the strength of evidence.
However, manuals caution that discussing a suspect'sprior deceptionsis not an effective or recommended method to diffuse alibis. It risks confrontation and may damage rapport, reducing chances of confession.
Therefore, optionCis the exception.
NEW QUESTION # 107
Which of the following is NOT a function of a fraud examination report?
- A. To corroborate previously known facts
- B. To add credibility to the fraud examiner's work
- C. To convey all the evidence necessary for other parties to thoroughly evaluate the case
- D. To communicate the fraud examiner s qualifications for providing opinions about the case
Answer: D
NEW QUESTION # 108
Which of the following sets of numbers could a fraud examiner MOST LIKELY benefit from running a Benford's Law analysis on?
- A. Telephone numbers
- B. Vendor invoice amounts
- C. Bank account numbers
- D. Employee identification numbers
Answer: B
Explanation:
Benford's Law applies to naturally occurring sets of numbers such asinvoice amounts, expense reports, and transaction data. The Fraud Examiners Manual shows Benford's Law tests applied to vendor payments to detect anomalies like duplicate or inflated invoices. Telephone numbers, employee IDs, and bank account numbers areassigned numbersand do not follow Benford's distribution, so they are unsuitable for this test.
NEW QUESTION # 109
Baker, a Certified Fraud Examiner (CFE). is getting prepared to conduct a lengthy and complex interview. To prepare himself. Baker should:
- A. Avoid bringing any notes with him to the interview
- B. Writs down a detailed list of questions in advance
- C. Take only the documents he wishes to go over
- D. Write down key points to go over with the respondent
Answer: D
Explanation:
When preparing for interviews, fraud examiners should avoid scripting detailed questions. Instead, they prepare notes of key points to cover.
From the Fraud Examiners Manual:
"Whenever possible, do not prepare a list of predetermined questions to ask the subject. The interview should flow freely. The interviewer might, however, want to develop alist of key points to coverduring the interview".
Therefore, the best preparation method is to note key points instead of detailed questions.
NEW QUESTION # 110
Caroline a fraud examiner is conducting an admission-seeking interview with John an employee suspected of stealing cash. Which of the following is the MOST effective phrasing for Caroline to use when posing an admission-seeking question to John?
- A. ''Why did you take the money?"
- B. Do you know who look the money?"
- C. "What do you know about the stolen money'"
- D. "Did you steal the money?''
Answer: A
NEW QUESTION # 111
Which of the following is a common characteristic that asset hiders look for in the financial vehicles they use to conceal their assets?
- A. Exclusivity
- B. Traceability
- C. Transparency
- D. Accessibility
Answer: B
NEW QUESTION # 112
A fraud examiner contacts a witness regarding an interview. If the respondent says, 'I'm too busy' how should the fraud examiner react?
- A. Explain that the respondent will be subject to discipline if they do not participate
- B. Stress that the interview will be short
- C. Caution the witness that avoidance of the Interview will be considered suspicious
- D. Inquire about a owe convenient time
Answer: B
NEW QUESTION # 113
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