[2026] Practice with these CFE-Financial-Transactions-and-Fraud-Schemes dumps Certification Sample Questions
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ACFE CFE-Financial-Transactions-and-Fraud-Schemes certification is a valuable credential for professionals who specialize in fraud prevention and detection. The Financial Transactions and Fraud Schemes section of the exam covers a range of topics related to financial transactions and fraud schemes, and passing this section is essential for demonstrating proficiency in the field. By earning the CFE certification, professionals can enhance their careers and make a significant impact in the fight against fraud.
ACFE CFE-Financial-Transactions-and-Fraud-Schemes exam is a certification program designed for professionals in the field of fraud examination. CFE-Financial-Transactions-and-Fraud-Schemes exam covers various topics related to financial transactions and fraud schemes, including money laundering, asset misappropriation, and financial statement fraud. Certified Fraud Examiner - Financial Transactions and Fraud Schemes Exam certification is highly respected in the industry and is recognized globally.
NEW QUESTION # 25
Which of the following statements about skimming is CORRECT?
- A. Skimming schemes are considered on-book frauds because they leave an audit trail.
- B. Skimming schemes are generally less difficult to detect than cash larceny schemes.
- C. Skimming schemes involve the theft of cash sales but not accounts receivable payments.
- D. Skimming schemes involve stolen customer payments that were not recorded.
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: Skimming is the theft of incoming cash before it is recorded in the books. Since the payment is never recorded, no audit trail exists, making it an "off-book" scheme.
* Analysis of Incorrect Options:
* A - Incorrect; skimming can involve both sales and receivable payments.
* C - Incorrect; skimming is off-book, not on-book.
* D - Incorrect; skimming is typically harder to detect than larceny, since there is no record.
* Key Concept: Skimming vs. larceny - off-book theft of cash receipts.
Reference: ACFE Manual, Cash Receipts - Skimming Schemes.
NEW QUESTION # 26
Which of the four basic measures, if properly installed and implemented may help prevent inventory fraud?
- A. Proper documentation, segregation of duties, independent checks and physical safeguards
- B. prenumbered affiliations, segregation of duties, independent checks and physical safeguards
- C. Proper documentation, physical padding, independent checks and physical safeguards
- D. Proper documentation, segregation of duties, independent checks and inventory control
Answer: A
NEW QUESTION # 27
________ decrease assets and expenses and/or increase liabilities and/or equity.
- A. None of all
- B. Journal Entries
- C. Credit
- D. Debit
Answer: C
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Credits decrease assets and expenses while increasing liabilities and equity. They are recorded on the right-hand side of ledger accounts, forming the counterbalance to debits.
* Analysis of Incorrect Options:
* A. Journal Entries - Too general; not a directional effect.
* B. Debit - Opposite effect of credits.
* D. None of all - Incorrect because "credit" is the precise answer.
* Key Concept:Credit rules in double-entry accounting.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Accounting Concepts - Debits and Credits.
NEW QUESTION # 28
____________ is a process by which a bookkeeper records all transactions and can adjust the books.
- A. Journal Entries
- B. None of all
- C. Accounting Cycle
- D. Financial statement
Answer: A
NEW QUESTION # 29
Vertical analysis can BEST be described as:
- A. A technique for measuring the relationship between any two different financial statement amounts
- B. A technique for analyzing the percentage change in individual financial statement line items from one accounting period to the next accounting period.
- C. A technique for comparing the performance of a parent company to one of its subsidiaries
- D. A technique for analyzing the relationships among financial statement items where components are expressed as percentages of a specified base value.
Answer: D
Explanation:
Explanation/Reference: https://www.investopedia.com/articles/financial-theory/11/detecting-financial-fraud.asp
NEW QUESTION # 30
Once the expense account is closed, it becomes a historical item and probably will never be reviewed again.
- A. True
- B. False
Answer: A
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:This is True. After the closing process, expense accounts are reset to zero for the new accounting period. They remain only as part of historical financial statements and supporting records. Because of this, expense accounts can be a target for fraud concealment (fraudulent disbursements), since closed accounts are rarely scrutinized again.
* Analysis of Incorrect Options:
* B. False - Incorrect, as the closing process does make expense accounts historical.
* Key Concept:Expense accounts in fraud concealment - vulnerabilities due to being closed at period end.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Fraudulent Disbursements - Expense Account Manipulation.
NEW QUESTION # 31
Reconciling the sales records to the cash receipts is an effective way to detect a sales skimming scheme.
- A. True
- B. False
Answer: B
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Skimming involves the theft of cash before it is recorded in the accounting system. Since sales are never recorded, reconciling sales to receipts will not detect skimming-it can only detect larceny (theft after recording).
* Analysis of Incorrect Options:
* A. True - Incorrect because no discrepancy exists in the records (the sale itself is omitted).
* Key Concept: Distinction between skimming (off-book theft) and cash larceny (on-book theft).
Reference: ACFE Fraud Examiners Manual (2020), Cash Receipts: Skimming Schemes.
NEW QUESTION # 32
Which of the following is NOT one of the information security goals that should be achieved to secure an e- commerce system for users and account holders?
- A. Authentication
- B. Availability of data
- C. Non-repudiation
- D. Accuracy of data
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: The key goals of information security (the CIA triad plus authentication and non-repudiation) are confidentiality, integrity, availability, authentication, and non-repudiation. While accuracy of data is important, it is not formally one of the core security goals.
* Analysis of Incorrect Options:
* A. Availability - Ensures users can access data when needed.
* C. Authentication - Confirms identities before granting access.
* D. Non-repudiation - Prevents denial of legitimate transactions.
* Key Concept: Information security objectives for fraud prevention.
Reference: ACFE Manual, Fraud Prevention and Deterrence - Cybersecurity Principles.
NEW QUESTION # 33
A method for gaining unauthorized access to a computer system whereby the attacker deceives victims into disclosing personal information or convinces them to commit acts that facilitate the attacker's intended scheme is known as:
- A. Social engineering
- B. IP spoofing
- C. Packet sniffing
- D. Electronic piggybacking
Answer: A
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: Social engineering involves manipulating or deceiving people into revealing confidential information or taking actions that aid the attacker (e.g., clicking malicious links, sharing credentials). It targets human weaknesses rather than technical vulnerabilities.
* Analysis of Incorrect Options:
* A. IP spoofing - Forging an IP address to disguise origin.
* B. Electronic piggybacking - Unauthorized use of someone else's access connection.
* C. Packet sniffing - Monitoring data traffic across a network.
* Key Concept: Cyberfraud techniques - social engineering.
Reference: ACFE Manual, Fraud Prevention and Deterrence - Social Engineering Attacks.
NEW QUESTION # 34
Ada uses her mother's government identification card to impersonate her mother and obtain health care for herself under her mother's insurance benefits. Which type of patient health care fraud scheme is Ada MOST LIKELY committing?
- A. Misrepresentations fraud
- B. Third-party fraud
- C. Multiple claims fraud
- D. Fictitious claims fraud
Answer: B
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: This is third-party fraud, where someone uses another person's identity (often a relative or acquaintance) to obtain services or benefits they are not entitled to, such as medical treatment under another's insurance.
* Analysis of Incorrect Options:
* A. Misrepresentations fraud - Usually involves false information by a legitimate patient or provider.
* B. Fictitious claims fraud - Involves billing for services that never occurred.
* D. Multiple claims fraud - Involves submitting duplicate claims for the same service.
* Key Concept: Health care fraud typologies - patient third-party impersonation.
Reference: ACFE Manual, Financial Transactions - Health Care Fraud.
NEW QUESTION # 35
Which of the following factors is NOT included in most financial statement schemes?
- A. Fictitious revenues
- B. Concealed liabilities and expenses
- C. Persuasive Evidence
- D. Improper asset valuations
Answer: C
NEW QUESTION # 36
The most common method for billing scheme is:
- A. None of the above
- B. Register
- C. Accident
- D. Tips
Answer: D
NEW QUESTION # 37
Which of the following is NOT a justifiable reason to depart from generally accepted accounting principles (GAAP)?
- A. It is a common industry practice to give particular transactions a specific accounting treatment.
- B. The transaction at issue is considered to be immaterial.
- C. Departing from GAAP will make the company appear more profitable.
- D. Adherence to GAAP would produce misleading results.
Answer: A
NEW QUESTION # 38
Which of the following would be MOST INDICATIVE of loan fraud in a draw request submitted by a construction developer?
- A. There are several inspection reports.
- B. Change orders have been included.
- C. The developer's personal account statements have been omitted.
- D. Lien releases from subcontractors are not included with the request.
Answer: D
NEW QUESTION # 39
By what accountant means that the financial figures presented by the company are at least as much as reflected in the statements, if not more.
- A. Misappropriations
- B. Conservatism
- C. Matching
- D. Fraudulent statement
Answer: B
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:The conservatism principle in accounting means that financial statements should not overstate assets or income and should anticipate possible losses. Thus, the amounts shown should be at least as much as reflected, if not more. This ensures users are not misled by overly optimistic figures.
* Analysis of Incorrect Options:
* A. Fraudulent statement - Involves intentional misrepresentation, not a principle of accounting.
* B. Misappropriations - Theft of assets, unrelated to valuation principles.
* D. Matching - Refers to aligning expenses with related revenues, not conservatism.
* Key Concept:Conservatism principle - caution in financial reporting.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Accounting Concepts - Conservatism in GAAP.
NEW QUESTION # 40
Which of the following is NOT a measure that is commonly taken by fraudsters during account takeover schemes?
- A. Obtaining email addresses and other account log-in information by sending phishing emails
- B. Placing orders for products or transferring funds from the overtaken accounts
- C. Ensuring that the contact information for the overtaken account remains the same to avoid alerting the true account holder
- D. Using log-in credentials that have been stolen from one account to attempt to gain access to other payment accounts
Answer: C
NEW QUESTION # 41
A tangible asset is one which is:
- A. Neither A nor B
- B. Capable of being appraised
- C. Capable of being perceived
- D. Both A & B
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Tangible assets are those that can be physically perceived (touched, seen, etc.) and appraised (assigned a measurable value). Examples include buildings, land, equipment, and inventory. Both characteristics are correct, making C the best choice.
* Analysis of Incorrect Options:
* A. Capable of being perceived - True, but incomplete.
* B. Capable of being appraised - True, but incomplete.
* D. Neither A nor B - Incorrect since both statements are accurate.
* Key Concept:Tangible Assets - physical and measurable property owned by a business.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Accounting Concepts - Asset Classifications.
NEW QUESTION # 42
Which of the following is the MOST LIKELY result of a financial statement fraud scheme?
- A. Understated assets
- B. Overstated liabilities
- C. Understated equity
- D. Overstated revenues
Answer: B
Explanation:
Explanation/Reference: https://www.acfe.com/article.aspx?id=4294967799#:~:text=Fraud%20in%20financial%20statements%20takes,or%20understated%20liabilities%20and%20expenses.&text=The%20five%20classifications%20of%20financial,and%20expenses%2C%20and%20improper%20disclosures
NEW QUESTION # 43
People commit financial statement fraud to:
- A. Maintain personal income
- B. Conceal false business performances
- C. Stand outside the accounting system
- D. Preserve personal status/control
Answer: B
Explanation:
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Financial Statement Fraud - Motivations and Incentives.
NEW QUESTION # 44
When an incorrect total is carried from the journal to the ledger or from the ledger to the financial statements, this method is called:
- A. None of all
- B. Forced Balance
- C. Out-of-balance
- D. False balance
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:A false balance occurs when incorrect totals are intentionally carried forward from the journal to the ledger or from the ledger to the financial statements. This is often used as a concealment technique in fraud to make the books appear balanced while hiding irregularities.
* Analysis of Incorrect Options:
* A. Forced Balance - Involves adding fictitious entries to force accounts into balance.
* B. Out-of-balance - Results when entries don't match, but not specifically from carried totals.
* D. None of all - Incorrect since "false balance" is the precise term.
* Key Concept:False balance entries as concealment techniques in fraudulent bookkeeping.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Accounting Concepts - Concealment by False Balances.
NEW QUESTION # 45
When expenses used to produce income-all of them-should be matched in a consistent manner against that income, this is referred to:
- A. Equity
- B. Expense
- C. Financial record
- D. Accrual basis accounting
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Accrual basis accounting requires revenues and related expenses to be recorded in the same accounting period. This is known as the matching principle, ensuring accurate measurement of income.
* Analysis of Incorrect Options:
* A. Equity - Not relevant to matching expenses.
* C. Expense - A category of cost, not a principle.
* D. Financial record - Too general.
* Key Concept:Accrual Accounting & Matching Principle.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Accounting Concepts - Accrual Accounting and Matching Principle.
NEW QUESTION # 46
Which of the following is not a skimming scheme?
- A. Understated sales and receivables
- B. Unrecorded sales
- C. Fraud & Cost
- D. Theft of checks through the mail
Answer: C
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Common skimming schemes include unrecorded sales, theft of incoming checks, and understating sales/receivables. "Fraud & Cost" is not a recognized skimming scheme and appears to be a distractor.
* Analysis of Incorrect Options:
* A. Unrecorded sales - A classic skimming method.
* C. Theft of checks through the mail - Another recognized skimming approach (incoming receivables).
* D. Understated sales and receivables - A concealment method within skimming schemes.
* B. Fraud & Cost - Not a scheme classification.
* Key Concept:Skimming schemes vs. unrelated distractors.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Cash Receipts - Skimming Types.
NEW QUESTION # 47
The principal way to detect omitted credits from books of account is through:
- A. Trend analysis
- B. None of all
- C. Forced Balance
- D. Expense account
Answer: A
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Trend analysis is one of the most effective ways to detect omitted credits. By analyzing patterns in revenue, expenses, or balances over time, discrepancies such as missing credits become apparent. Forensic examiners rely on comparative financial analysis to identify anomalies that suggest manipulation.
* Analysis of Incorrect Options:
* A. Forced Balance - Describes concealment, not detection.
* C. Expense account - Accounts can be manipulated but are not detection methods.
* D. None of all - Incorrect, since trend analysis is correct.
* Key Concept:Analytical procedures (trend analysis) in fraud detection.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Fraud Examination Techniques - Analytical Procedures.
NEW QUESTION # 48
Martin worked in the warehouse of a large electronics distributor. When a shipment of five hundred cameras arrived, Martin stole one hundred of the units. He sent a receiving report to accounts payable indicating that all five hundred cameras arrived. However, he altered the copy used for the inventory records to indicate that only four hundred of the units were received so that the available inventory would match the perpetual inventory records. What type of scheme did Martin commit?
- A. A false sale scheme
- B. A purchasing and receiving scheme
- C. A register disbursement scheme
- D. A skimming scheme
Answer: D
Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Intro%20to%20Fraud-Chapter%20Excerpt.pdf
NEW QUESTION # 49
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