Investigation Techniques

Which of the following can be obtained from a wire transfer record?
A. The name of the sender or originator
B. The sending institution’s accreditation type
C. The recipient’s government identification number
D. The name of the receiving institution’s registered agent

Charles, a fraud examiner, accuses George of fraud during an admission-seeking interview. George immediately denies the charge. How should Charles respond to George’s denial?
A. Counter the denial by arguing with George until further denials are futile.
B. Use a delaying tactic to interrupt the denial.
C. Remind George he has to tell the truth or face perjury.
D. Allow George to continue denying the charge.

When reporting the results of a fraud examination, it is best to include copies (not originals) of important documents in the formal report.
A. True
B. False

Which of the following is a best practice for obtaining a signed statement?
A. Make sure that everything is included in the signed statement and that no addendums are made.
B. Have two individuals witness the signing of the document when possible.
C. Include all of the subject’s offenses, whether related or not, in a single document.
D. Have the suspect write out the entire statement in his own handwriting.

Dennis, a fraud investigator, is interviewing Richard, a fraud suspect. During the interview, Dennis suspects that Richard is not answering questions honestly. To gauge Richard’s credibility, which type of question should Dennis ask?
A. Assessment
B. Open
C. Rhetorical
D. Leading

Which of the following statements concerning a well-written fraud examination report is most accurate?
A. The report should convey all information provided by witnesses.
B. The report writer should avoid technical jargon where possible.
C. Only relevant facts that support the fraud allegation should be included in the report.
D. Signed copies of the fraud examiner’s interview notes should be used to report interview details.

Which of the following should be done to prepare an organization for a formal fraud investigation?
A. Inform the subject that he is under investigation.
B. Notify key decision makers that the investigation is about to begin.
C. Notify all managers about the investigation, explaining why it is happening and who is involved.
D. Send an email to all employees explaining the investigation’s purpose.

Why is it necessary to image a seized computer’s hard drive for forensic analysis?
A. To prohibit access to the suspect computer’s hard drive by individuals not professionally trained in forensic analysis
B. To allow for the analysis of data from a suspect computer without altering or damaging the original data in any way
C. To create pictures of the suspect computer system and its wires and cables
D. To enable the retrieval of data from the suspect computer directly via its operating system

Which of the following statements would be IMPROPER if included in the fraud examination report of a CFE who is also qualified as an accounting expert?
A. “The company’s internal controls were wholly inadequate to prevent this type of violation and should be remediated at the earliest possible time.”
B. “Based on statements he made to me, it is my assessment that the suspect has a dishonest disposition.”
C. “From my examination, it appears that the company’s financial statements were not presented in accordance with generally accepted accounting principles.”
D. “The evidence shows that expenses in excess of $5 million were omitted from the company’s financial statements.”

David, an interviewer with little experience, asks Smith, the respondent, the following question: “Were you aware that the signature was forged, and why didn’t you tell anyone earlier?” This kind of question is called a _____________ question.
A. Double-negative
B. Free narrative
C. Controlled answer
D. Complex

When a Certified Fraud Examiner conducts a fraud examination, he must proceed as though:
A. The suspect is guilty.
B. After the suspect is terminated, the case will end.
C. The case will end in litigation.
D. The matter will be resolved completely internally.

Which of the following statements about data mining is INCORRECT?
A. Data mining is an effective way for fraud examiners to develop fraud targets for further investigation.
B. Data mining is the science of searching large volumes of data for patterns.
C. Data mining can be used to streamline raw data into understandable patterns.
D. Data mining is used to recover deleted data from a computer system.

Assuming that a jurisdiction has prohibited pretexting with financial institutions, which of the following actions would constitute illegal pretexting?
A. Making purchases with a credit card account under a fictitious identity
B. Digging through a person’s trash to obtain his bank account information
C. Withdrawing another person’s funds using a stolen bank account number and PIN
D. Falsely claiming to be the spouse of an account holder to access bank records

Which of the following would be most useful in determining who created a specific document file?
A. Operating system partition
B. The document’s metadata
C. The system log
D. Internet activity data

Looking at a list of expenses, Karen notices that airfare expenses have risen dramatically, but she believes that the staff actually traveled fewer days this year than last year. Which of the following data analysis functions would be the most useful in helping Karen analyze these two variables?
A. Correlation analysis
B. Gap testing
C. Duplicate testing
D. Benford’s Law analysis

Barnes, a CFE, is using data analysis to identify anomalies that might indicate fraud in XYZ Company’s accounts payable transactions. Which of the following is the most effective data analysis function that Barnes could use to look for potential fraud in accounts payable?
A. Compare book and tax depreciation and indicate variances
B. Identify paycheck amounts over a certain limit
C. Review recurring monthly expenses and compare to posted/paid invoices
D. All of the above

Bennett, a fraud examiner, is performing textual analytics on journal entry data. He developed a list of fraud keywords to search for based on the three legs of the Fraud Triangle. Which of the following fraud keywords found in the journal entry text is the best indicator of pressure to commit fraud?
A. Override
B. Deserve
C. Temporary
D. Quota

Andrew wants to use a confidential informant in his investigation. He plans to compensate the informant with cash and obtain a receipt. He also plans to identify his source in a memo and his final report using only the informant’s initials. Which of Andrew’s plans is NOT considered a best practice when using an informant?
A. Creating a receipt regarding the cash payment
B. Compensating the informant with cash
C. Using information from the informant in his final report
D. Referring to the informant in the memo using the informant’s initials

When planning for the interview phase of an investigation, which of the following steps should NOT be taken by the fraud examiner?
A. Ensure that the interview is held in a venue where the subject will feel comfortable.
B. Consider what the interview is intended to accomplish and state an objective.
C. Prepare a detailed list of questions to ask the subject during the interview.
D. Review the case file to ensure he has not overlooked important information.

Which of the following is TRUE of a follow-up/recommendations section in a written fraud examination report?
A. A follow-up/recommendations section must include a list of organizational failings that contributed to the fraud
B. A follow-up/recommendations section is not a required part of every written fraud examination report
C. A follow-up/recommendations section calculates the amount of loss caused by any misconduct identified during the investigation
D. All of the above

Which of the following is NOT one of the purposes of closing questions in a routine interview?
A. To reduce testimony to a signed, written statement
B. To gather additional facts
C. To reconfirm facts
D. To close the interview positively and maintain goodwill

Which of the following is NOT a common use of public sources of information?
A. Locating people and their assets
B. Corroborating or refuting witness statements
C. Obtaining background information on individuals
D. Searching an individual’s income tax filings

It is recommended that information in a fraud examination report be presented alphabetically with respect to parties and document titles.
A. True
B. False

Why do fraud examiners perform analysis on unstructured, or textual, data?
A. To determine whether the footnotes to the financial statements are fairly presented
B. To categorize data to reveal patterns, sentiments, and relationships indicative of fraud
C. To figure out whether someone is lying or telling the truth based on context clues
D. To find an admission of fraud in an email or other communication that can be presented in court

During an interview, Sam tells the fraud examiner he saw the subject in the supply room three times. As he continues, he begins to become confused as to whether he saw the subject on a fourth occasion and on what dates he saw the subject. Which of the following describes the communication inhibitor in this situation?
A. Altruistic appeal
B. Chronological confusion
C. Inferential confusion
D. Unconscious behavior

Arnold, a Certified Fraud Examiner for Integra Wealth, learns that Keene, an accounts payable clerk, recently purchased an expensive ski boat. Arnold also knows that Keene recently purchased a vacation home on a nearby lake. Arnold has sufficient predication to:
A. Conduct discreet inquiries into Keene’s responsibilities as an accounts payable clerk.
B. Notify management of the possibility that Keene has committed fraudulent acts.
C. Search Keene’s mobile phone for evidence of misconduct.
D. Directly accuse Keene of having committed fraud.

Thompson, a CFE, was hired to trace Keeler’s assets. To trace the assets, Thompson uses Keeler’s books and records to analyze the relationship between his receipt and subsequent disposition of funds or assets. Which tracing method did Thompson use?
A. The asset method
B. The direct method
C. The comparative assets method
D. The indirect method

Jackson, a Certified Fraud Examiner, is beginning his interview of Randall. He thinks that Randall might have information about a coworker’s involvement in a fraudulent disbursement scheme. Before Jackson begins asking serious questions, what should he get from Randall?
A. A commitment for assistance
B. A signed indemnity form
C. A list of references
D. A list of his previous employers
Which of the following is the MOST ACCURATE statement concerning the volatility of digital evidence?
A. If the integrity of digital evidence is violated, it often can be restored through a digital cleansing process.
B. Digital evidence is more volatile than tangible evidence because the rules of admissibility for digital evidence are stricter than such rules for tangible evidence.
C. The failure to preserve the integrity of digital evidence could result in evidence being deemed inadmissible in a legal proceeding.
D. Digital evidence is more volatile than tangible evidence because digital evidence is subject to claims of spoliation, whereas tangible evidence is not.

Which of the following is INCORRECT with regard to locating individuals using online records?
A. Obtaining a past address of the subject should be the first step in trying to locate a subject using online records.
B. Before engaging in a search, the fraud examiner should know the most powerful and useful types of searches.
C. Online records are very useful in locating subjects whose whereabouts are unknown.
D. If an individual has moved, obtaining a past address is usually of no help.

Which of the following data analysis functions is used to determine whether company policies are met by employee transactions, such as verifying that traveling employees book their accommodations at approved hotels?
A. The compliance verification function
B. The join function
C. The gap testing function
D. The correlation analysis function

Which of the following statements about how fraud examiners should approach fraud examinations is FALSE?
A. When conducting fraud examinations, fraud examiners should adhere to the fraud theory approach.
B. When conducting fraud examinations, fraud examiners should start with specific details and move toward more general information.
C. When conducting fraud examinations, fraud examiners should begin with general information that is known and then move to the more specific details.
D. In most examinations, fraud examiners should start interviewing the least involved candidates and proceed toward those who are potentially more involved.

Which of the following is NOT one of the main limitations of conducting a search for public records using online databases?
A. Fraud examiners often must search for public records in multiple jurisdictions.
B. Online records companies are difficult to find.
C. Fraud examiners must validate the accuracy of the records obtained online.
D. The online record might only be a brief abstract of the original.

Boyd, a CFE, was hired to trace Lott’s financial transactions. During his investigation, Boyd obtains records of electronic payments Lott made during the past five years. Which of the following are these records most likely to reveal?
A. The division and distribution of Lott’s assets
B. The assets that Lott has purchased
C. If Lott is skimming his employer’s funds
D. The funds Lott has tied up in real property

Which of the following is a common characteristic that asset hiders look for in the financial vehicles they use to conceal their assets?
A. Traceability
B. Liquidity
C. Inaccessibility
D. Transparency

Misty, a fraud investigator, is interviewing Larry, who she suspects has been embezzling company funds. Which of the following is NOT a recommended sequence in which Misty should ask Larry questions?
A. Start with general questions and move toward specific questions.
B. Ask questions seeking general information before seeking details.
C. Start with questions about known information and work toward unknown information.
D. Ask questions in random order to prevent Larry from knowing what question comes next.

Christopher, a fraud examiner, is conducting an admission-seeking interview with Jennifer, an employee suspected of stealing cash. Which of the following is the LEAST effective phrasing for Christopher to use when posing an admission-seeking question to Jennifer?
A. “Why did you take the money?”
B. “What did you do with the money?”
C. “Did you steal the money?”
D. “How much of the money do you have left?”

Which of the following situations would probably NOT require access to nonpublic records to develop evidence?
A. Analyzing an individual’s personal mobile phone records
B. Accessing banking records to trace assets
C. Obtaining personal health care records
D. Reviewing a company’s business filings

Alana is the former girlfriend of Oscar, a fraud suspect. She approaches Bianca, a fraud examiner at Oscar’s company, and offers to provide critical information about Oscar’s fraud. However, she requests full confidentiality in return for her assistance. Which of the following is the most appropriate response for Bianca to make?
A. Explain that Alana may have qualified confidentiality, but that no absolute assurances can be given.
B. Promise Alana that her identity will not become known.
C. Promise Alana unqualified confidentiality over all information provided.
D. Explain that nothing may be confidential because all information must be disclosed to the company.

Gilbert is preparing to conduct a covert investigation. Before acting, he wants to write a memo documenting his plan. Which of the following pieces of information should he include in this memo?
A. His first impression regarding the subject’s culpability
B. The identities of any confidential sources to be used in the operation
C. The information expected to be gained from the operation
D. All of the above

Which of the following general statements about a fraud investigation plan is CORRECT?
A. An investigation plan should identify the scope of the investigation.
B. An investigation plan should establish which individuals violated the law.
C. An investigation plan should promise a particular investigation outcome.
D. An investigation plan should notify all employees about the investigation.

Which of the following sources of information is usually considered to be the MOST important in tracing a subject’s assets?
A. Credit card statements
B. Surveillance footage
C. Paystubs
D. Financial institution records

Baker, a Certified Fraud Examiner, is assigned to the internal audit department of the ABC Company. He is getting ready to conduct an interview with another company employee who might be involved in a fraud. In general, what title should Baker use in his introduction to the employee?
A. Baker should omit a title altogether
B. Certified Fraud Examiner
C. Investigator
D. Auditor

Elizabeth, a Certified Fraud Examiner, is conducting an admission-seeking interview with Shannon, a fraud suspect. Shannon is seated approximately five feet away from Elizabeth in an empty room. The room has one window, no wall hangings, and the door is closed. According to admission-seeking interview best practices, what change should Elizabeth make to the interview environment to increase the chances of the interview’s success?
A. Place a table between her and Shannon to create a psychological barrier
B. Move the interview to a room without a window to prevent outside distractions
C. Open the door so that Shannon feels free to leave at any time
D. All of the above

Which of the following is the most accurate statement about seizing a computer for examination?
A. When seizing a computer for examination, the party seizing the computer should not waste time looking around the area for passwords because password-protected data is private and therefore legally protected.
B. Before removing a computer system from a scene for further analysis, it is important to document the system’s setup with photographs or diagrams.
C. When taking a computer for examination, if the computer is off, it should be turned on before it is removed.
D. When seizing a computer that is running, it is acceptable to review the files contained on the machine prior to seizing it.

Baker, a Certified Fraud Examiner, contacts Delta for the purpose of conducting a routine, information-gathering interview. Delta expresses a desire that his coworker, Matthew, whom Baker also plans to interview, be interviewed at the same time. Baker should:
A. Interview Delta and Matthew at the same time by himself.
B. Interview Delta and Matthew at the same time, but bring in a second interviewer.
C. Interview Delta and Matthew separately.
D. Allow Matthew to be present as a silent observer.

Which of the following is a common method that fraudsters use to hide their ill-gotten gains?
A. Placing assets in probate
B. Creating a will to allocate assets at death
C. Purchasing a used vehicle
D. Transferring assets into foreign trusts

Susan, a Certified Fraud Examiner, is conducting an admission-seeking interview of Beth, a fraud suspect. After Susan gave Beth a suitable rationalization for her conduct, Beth continued her denials, giving various alibis. Which of the following would be the LEAST effective technique for Susan to use in this situation?
A. Displaying all the evidence she has against Beth at once
B. Convincing Beth of the strength of the evidence against her
C. Discussing Beth’s prior deceptions
D. Discussing the testimony of other witnesses

When evidence of fraud arises, management should respond, in part, by:
A. Documenting the initial response
B. Informing those suspected of misconduct
C. Disciplining the suspected employee
D. Removing any litigation holds

Which of the following is an example of a closed question?
A. “When were you promoted to manager of the department?”
B. “Why did you come to work early that day?”
C. “What do you like about your current position?”
D. “What are your thoughts about the commission program?”

Which of the following is a reason why a subject’s credit card records are useful in tracing investigations?
A. Credit card records contain information about the division and distribution of the subject’s assets.
B. Credit card records provide insight into the subject’s litigation history.
C. Credit card records show the movements and habits of the subject.
D. Credit card statements show the source of the funds used to pay a credit card bill.

Which of the following is considered good practice when selecting the participants on a team assembled to investigate fraud?
A. Select team members with a close professional relationship with the subject
B. Select team members who are the most qualified, regardless of their personalities
C. Select team members who possess untraditional knowledge that can contribute to the investigation
D. All of the above

Which of the following is the most appropriate measure when seeking to avoid alerting suspected perpetrators who are under investigation?
A. Delay taking any action.
B. Disclose the investigation to all employees.
C. Terminate the suspected employee.
D. Investigate during nonbusiness hours.

Maria, a fraud suspect, arrives at an interview with David, a fraud examiner, smelling of marijuana smoke. Maria’s apparent drug use will likely cause her behavioral clues to be:
A. More difficult to read
B. More honest
C. Unaffected
D. Easier to read

Tom is conducting a fraud examination for a company and suspects one of the company’s vendors (a one-person operation) of fraudulent billing. Tom wants to obtain a copy of the suspect individual’s credit report and personal data from a third-party information broker. If Tom works in a jurisdiction that regulates the distribution of personal credit information, he cannot obtain the suspect’s personal credit data under any circumstances.
A. True
B. False

A fraud examiner contacts a witness regarding an interview. If the respondent says, “I’m too busy,” how should the fraud examiner react?
A. Point out that the interviewer is already there.
B. Caution him that avoidance of the interview will be considered suspicious.
C. Explain that the respondent will be subject to discipline if he does not participate.
D. Offer to come back at a later time.

Which of the following is NOT a step a fraud examiner must take before seizing evidence in a digital forensic investigation?
A. Obtain and become familiar with any applicable legal orders.
B. Ensure that all forensic equipment is being used properly.
C. Verify that all forensic equipment is new and has never been used before.
D. Determine whether there are privacy issues related to the item(s) to be searched.

Which of the following statements concerning real property records is MOST ACCURATE?
A. A property’s historical price is generally only available to the tax authority and the property owner.
B. Real property records often contain the identity of the party that financed the purchase of the property, if applicable.
C. Real property records usually contain a property owner’s credit report.
D. In most jurisdictions, there are no publicly available real property records.

Which of the following is NOT a purpose of an admission-seeking interview?
A. To encourage a culpable person to confess
B. To obtain a valid confession
C. To establish that the accused mistakenly committed the act
D. To obtain a written statement acknowledging the facts

Sarah is conducting an admission-seeking interview of a suspect. Throughout the interview, the suspect makes little eye contact with Sarah. Based on this information alone, can Sarah conclude that the suspect is being deceptive?
A. No, because avoiding eye contact is not directly linked to deception.
B. No, because this is not enough information to conclude that the suspect is being deceptive.
C. Yes, because avoiding eye contact is a sign of deception in all cultures.
D. Yes, because it is safe to assume that suspects who avoid eye contact are most likely being deceptive.

Naveed, a fraud suspect, has decided to confess to Omar, a Certified Fraud Examiner. In obtaining a verbal confession from Naveed, Omar should obtain all of the following items of information EXCEPT:
A. A general estimate of the amount of money involved
B. A statement from Naveed that his conduct was an accident
C. The approximate number of instances
D. The location of any residual assets
Which of the following is a unique challenge of cloud forensics not faced in traditional forensic practices?
A. Lack of prosecutorial interest
B. Lack of trust from cloud providers
C. Lack of information accessibility
D. Lack of adequate data

Fraud examination reports should be written with which of the following audiences in mind?
A. Investors and owners
B. The media
C. Opposing legal counsel
D. All of the above

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 they store copied images indefinitely.
B. Many copiers have internal hard drives that might contain information relevant to a fraud examination.
C. Most copiers store, process, and transmit data in a cloud environment.
D. Many copiers connect via parallel cables, which store and transmit copy job data.

A law enforcement officer receives a reliable tip from an informant that a government employee is soliciting bribes in exchange for awarding contracts to the employee’s agency. To investigate, the officer poses as a potential contractor and contacts the suspect employee about the possibility of getting a contract with the agency. In the course of the conversation, the suspect demands a cash payment for the officer to be considered for upcoming contracts. If the suspect claims entrapment at trial, then which of the following is most likely to occur?
A. The suspect’s claim will succeed because the investigator used deceit.
B. The suspect’s claim will fail because the investigator had adequate predication.
C. The suspect’s claim will fail because the investigator is a law enforcement agent.
D. The suspect’s claim will succeed because the investigator lacked probable cause.

Which of the following is a red flag indicating that a subject is seeking to conceal ill-gotten assets through a loan repayment?
A. The subject refinances his loan at a lower interest rate.
B. The subject makes a large paydown on his loan.
C. The subject uses an online banking service to make a loan payment.
D. The subject shows concern for making his loan repayments on time.

If your suspect is spending suspected illicit funds on consumables (e.g., travel and entertainment) and you need to prove his illicit income circumstantially, which of the following methods of tracing assets would yield the best result?
A. The expenditures method
B. The asset method
C. The application of funds method
D. The income method

Scarlett, a Certified Fraud Examiner, is conducting an admission-seeking interview of Plum, a fraud suspect. After Scarlett diffused Plum’s alibis, Plum became withdrawn and slowly began to slouch in his chair, bowing his head. What should Scarlett do now?
A. Insist that Plum sit up straight.
B. Present an alternative question.
C. Say nothing else until Plum confesses.
D. Discourage Plum from showing emotion.

During an interview of a fraud suspect, the interviewer states: “I can see why you altered the financial statements; you were trying to prevent the massive employee layoffs that would have followed the company’s financial collapse.” Which of the following best describes the facilitator that the interviewer is using?
A. Extrinsic rewards
B. Catharsis
C. Altruism
D. Recognition

Which of the following is a reason why a person or organization might engage a fraud examiner to trace illicit transactions?
A. An organization wants to find hidden relationships between trading instruments.
B. An employer wants to know if an employee is falsifying regulatory reports.
C. A judgment creditor needs to identify the judgment debtor’s assets.
D. An attorney wants to evaluate an expert’s financial report.

Which of the following is an example of a leading question?
A. “Do you usually go out for lunch or do you prefer to eat at the office?”
B. “When did you first notice the manipulation of the receivables?”
C. “Weren’t you in charge of ensuring that new vendors are properly vetted?”
D. “Was anyone else involved in the project?”

Which of the following types of information would LEAST likely be found when searching external sources without the subject’s consent or a legal order?
A. Background information on a subject
B. Private business tax records
C. Ownership of a vendor or competitor
D. Location of a subject’s assets

During an interview, Alex asked a fraud suspect if he could retrieve the suspect’s account records from his bank. The suspect said yes but did not provide consent in writing. Although the suspect orally consented, the suspect’s bank is not required to allow Alex to access the suspect’s account records at this point.
A. True
B. False

Amanda needs to know the location of the principal office and the date of incorporation of a company she is investigating. Which of the following sources would most likely contain these items of information?
A. The comprehensive litigation file in the local court in the jurisdiction in which the company is headquartered
B. The contractual records of any real property owned by the corporation
C. The company’s income tax filings
D. The organizational filing with the government of the jurisdiction in which the company is incorporated

An investigator is preparing to administer what is likely to be an intense and extended interview with a fraud suspect. To organize his thoughts prior to the interview, the fraud examiner should:
A. Make a list of key points to go over with the respondent.
B. Memorize a detailed list of questions, but avoid bringing a written list to the interview.
C. Develop a list of questions ranked in order of importance.
D. Provide the suspect with a list of questions to ensure detailed responses.

Marilyn, a Certified Fraud Examiner, is reasonably sure that Shelly, her primary suspect, committed the fraud in question. Before scheduling an admission-seeking interview with Shelly, Marilyn should be reasonably sure of all of the following EXCEPT:
A. That the interview’s subject matter can be controlled
B. That no other person was involved in the fraud in question
C. That the interview’s time and location can be controlled
D. That all reasonable investigative steps have been taken

Which of the following is the MOST ACCURATE statement regarding the analysis phase in digital forensic investigations?
A. When analyzing data for evidence, fraud examiners should look for inculpatory evidence but not exculpatory evidence.
B. During the analysis phase, it is best to use a combination of the various forensic tools that can assist in identifying, extracting, and collecting digital evidence.
C. The analysis phase of forensic investigations should not commence unless it is verified that the suspect devices do not contain relevant data.
D. The primary concern when analyzing digital evidence is to protect the collected information from seizure.

Which of the following statements about the process of obtaining a verbal confession is NOT true?
A. The transition from the accusation to the confession should occur when the accused supplies the first detailed information about the offense.
B. The three general approaches to obtaining a verbal confession are chronologically, by transaction, or by event.
C. Fraudsters tend to overestimate the amount of funds involved in the offense to relieve themselves of the guilt of their dishonest actions.
D. If the subject lies about an aspect of the offense in the process of confessing, it is best to proceed initially as if the falsehood has been accepted as truth.

While taking notes during an interview, the interviewer should do all of the following EXCEPT:
A. Record only the pertinent facts that the subject provides.
B. Err on the side of taking too many notes rather than too few.
C. Ensure that notes for each interview are recorded on a separate document.
D. Avoid making notes regarding the subject’s guilt or innocence.

If an important witness becomes hostile and argumentative during an interview, the interviewer generally should:
A. Refute the witness’s arguments.
B. Terminate the interview.
C. Avoid reacting to the witness.
D. Try to reason with the witness.

Which of the following is the most accurate statement about fraud response plans?
A. A fraud response plan should outline how every fraud examination should be conducted regardless of the type of fraud.
B. A fraud response plan should create an environment to maximize risk and minimize the potential for success.
C. A fraud response plan outlines the actions an organization will take when suspicions of fraud have arisen.
D. A fraud response plan should be complex and extremely detailed to most effectively protect against fraud.

Which of the following should generally be included in a written fraud examination report?
A. A section that states why the fraud examination was conducted
B. A section that briefly describes the approach used to examine the fraud
C. A section that identifies the scope of the examination
D. All of the above

Kate is conducting an admission-seeking interview with Julian, a fraud suspect. During the interview, Julian unwittingly reveals incriminating information that could only be known by the offender. Which of the following statements is most accurate regarding how Kate should note this information?
A. Kate should note the information in a manner that suggests to Julian that he has been caught.
B. Kate should note the information in detail so that nothing is forgotten.
C. Kate should not note the information because notes should never be taken during an admission-seeking interview.
D. Kate should note the information briefly and in an inconspicuous manner.

Which of the following is NOT a function of a fraud examination report?
A. To convey all the evidence necessary for other parties to thoroughly evaluate the case
B. To corroborate previously known facts
C. To add credibility to the fraud examination
D. To communicate the fraud examiner’s opinion of the case to parties in a judicial proceeding

While studying key documents previously in a fraud suspect’s possession, a fraud examiner, who is also a forensic document examiner, discovers very faint written indentations on a blank page. Which of the following would be the BEST method for revealing the text of the indentations?
A. Shading the indentations lightly with a dull pencil to reveal the text
B. Applying a few drops of liquid and observing the liquid’s flow in the indentations
C. Shining a bright-beam light at an oblique angle across the flat writing to reveal the text’s shadows
D. Using the scratch method on the surface of the paper to uncover the text

Which of the following is a method of tracing assets that would yield the best result when several of the subject’s assets or liabilities have changed during the period under examination and the subject’s financial records are not available?
A. Regression analysis
B. Benford’s Law analysis
C. Bank deposit method
D. Net-worth method

Which of the following is considered a best practice for preserving the confidentiality of a fraud investigation?
A. Use email or other electronic means to transmit all confidential case information.
B. Ensure that the investigation is conducted at the direction of, or under the supervision of, a legal professional.
C. Suspend all employees involved in the investigation pending the investigation outcome.
D. Implement a blanket policy prohibiting all employees from discussing anything related to employee investigations.

Steve, a Certified Fraud Examiner, was interviewing Mitchell, a fraud suspect. During the interview, Mitchell seemed preoccupied and unconcerned; he alternately chewed on his pen cap and picked at a loose piece of fabric on the arm of his chair during direct questions about the fraud. From this conduct, Steve is likely to conclude that Mitchell:
A. Is telling the truth
B. Is feeling bored by the interview process
C. Is being deceptive
D. Does not know the answers to Steve’s questions

Which of the following types of questions should the interviewer extensively use during the information phase of the interview?
A. Negative questions
B. Open questions
C. Leading questions
D. Closed questions

Which of the following is NOT an advantage to using link analysis in a fraud investigation?
A. Link analysis helps identify indirect relationships with several degrees of separation.
B. Link analysis visually displays financial ratio analysis.
C. Link analysis is an effective tool to demonstrate complex networks.
D. Link analysis allows the investigator to discover patterns in data.

A fraud examiner suspects that an employee who is tasked with meeting new customers over business dinners to discuss their accounts is using those meetings to proposition the customers and steal business from his employer. If the fraud examiner wanted to pose as a new customer and meet with the employee, which of the following would best describe the fraud examiner’s method?
A. An entrapment operation
B. An undercover operation
C. A surveillance operation
D. A source operation

Tim, a suspect in a kickback scheme, is being interviewed by Carlos, a fraud examiner. As the interview progresses, Carlos notices that Tim is exhibiting signs of stress, such as repeatedly touching his face, crossing and uncrossing his legs, and darting his eyes around the room. Carlos should conclude that Tim’s behavior is the result of deception.
A. True
B. False

Talia has been hired by SBS Inc. to implement a new data analysis program to search for warning signs of potential fraud within the company. Which of the following steps should Talia conduct first to most effectively use data analysis techniques for such an initiative?
A. Identify the relevant data.
B. Cleanse and normalize the data.
C. Build a profile of potential frauds.
D. Monitor the data.

Mary, the payroll manager at Reed Co., suspects that there might be a ghost employee scheme occurring. She wants to ensure no two employees on the payroll have the same government identification number. Which of the following data analysis functions would be most useful for this test?
A. Linear regression
B. Benford’s Law analysis
C. Correlation analysis
D. Duplicate search

When a fraud examiner is conducting an examination and is in the process of collecting documents, he should:
A. Organize all the documents obtained in chronological order.
B. Establish a document database early in the investigation.
C. Dust all physical key documents for fingerprints.
D. Make copies of originals and leave the originals where they were found.

Bob wants to search the Internet for information on Ponzi schemes. He searches the phrase “Ponzi schemes,” enclosed by quotation marks, in a search engine. What results will this search produce?
A. The search will return sites in which the exact phrase “Ponzi schemes” appears in their text.
B. The search will return sites in which the words “Ponzi” and “schemes” appear within three or more words of each other on the page.
C. The search will return sites in which the words “Ponzi” and “schemes” appear anywhere on the page, even if not next to each other.
D. The search will return sites in which the exact phrase “Ponzi schemes” appears in the title.

While executing a search warrant on a suspect’s home, a fraud examiner discovers a document that appears to have indented writings on it and that likely contains a latent fingerprint, both of which would be useful evidence. Which of the following statements is INCORRECT?
A. The fraud examiner should place the evidence in a container labeled with his initials, the date, and where the document was obtained.
B. The fraud examiner should wear a pair of protective gloves when handling the document.
C. The fraud examiner should dust and check the document using fingerprint powder before storing it.
D. The fraud examiner should preserve the document in a sealable, acid-free paper envelope.

Toole, a CFE, is searching social media sites for evidence in a fraud investigation. Which of the following is the MOST ACCURATE statement regarding what Toole should do when mining social media sites for evidence of fraud?
A. Toole should preserve the information by saving the links of the postings in his “bookmarks.”
B. Toole should preserve the metadata by printing out the Web pages of each posting.
C. Toole should preserve the information from the sites so that it can be established as authentic if used in court.
D. Tool should conduct a forensic shutdown of his computer to preserve the metadata in the social networking sites.

Janet suspects that a local restaurant is being used as a front business for a criminal operation. Which of the following types of records would be the MOST likely to help Janet discover who owns the restaurant building?
A. Building permit records
B. Commercial filings
C. Local court records
D. Voter registration records

Which of the following is a recommended strategy when conducting admission-seeking interviews?
A. Express disgust with the subject’s actions to induce him into confessing.
B. Ensure that accusations are made in the presence of a third party to avoid potential liability.
C. Increase sympathy while downplaying implications of wrongdoing.
D. Use time constraints as a means to pressure the subject into making a confession.

Which of the following terms refers to a process of resolving allegations of fraud from inception to disposition?
A. Forensic methodology
B. Fraud assessment
C. Fraud examination
D. Fraud theory

Which of the following statements concerning chain of custody is CORRECT?
A. The record of the chain of custody needs to include the fraud examiner’s opinion of why the evidence was collected
B. The best way to document chain of custody is for the fraud examiner to sign an affidavit swearing to the evidence’s contents
C. The record of the chain of custody needs to include from whom the items of evidence were received
D. All of the above

Tyson, a fraud examiner, is planning an interview with George, the boyfriend of the central suspect in Tyson’s investigation. Previous interviews with others have revealed that George tends to be very protective of his girlfriend. How should Tyson approach the interview with George?
A. Avoid interviewing George if possible due to George’s potential volatility.
B. Conduct the interview with as little notice as possible so George will be unprepared.
C. Ask George when he would prefer to be interviewed in an effort to provoke cooperation.
D. Provide George with advance notice prior to the interview to inhibit resentment.

Which of the following types of data is best suited for a Benford’s Law analysis?
A. A listing of cash disbursement amounts
B. Vendor addresses
C. Invoice numbers
D. Employee identification numbers

Which of the following questions would be most effective when starting the calibration process during an interview?
A. “Are you familiar with company policies regarding ethics?”
B. “How long have you been in this department?”
C. “Do you know who had access to the file?”
D. “Have you committed any misconduct against the company?”

Which of the following is the MOST ACCURATE statement about the privacy of information shared through social media?
A. It is legal to search for information that is posted and made available to the public.
B. The Social Media Privacy Treaty is a binding international treaty that makes it illegal for employers to seek social media login credentials from job applicants and employees.
C. If fraud examiners access information that is posted on a social media site without authorization, they could be held liable for invasion of privacy by false light.
D. A fraud examiner cannot be held liable for violating a user’s privacy if he hacks or breaks into areas of the site that the user designated as private because all social media information is public.

Sam needs to obtain the most accurate court records possible in a particular jurisdiction concerning a fraud suspect. The best place for Sam to look is a global database that compiles court cases from various jurisdictions.
A. True
B. False

An investigator for a country’s criminal investigative body is conducting a criminal investigation into suspected bribery by a local government official and needs to compel the production of documents located in a foreign country. The two governments have entered a treaty by which they agree to assist one another in criminal law enforcement matters. Which of the following should the investigator use to obtain the documents?
A. Judgment NOV
B. Mutual legal assistance (MLA)
C. Subpoena ad testificandum
D. Request for production

Which of the following is NOT true with regard to tracing the disposition of loan proceeds?
A. Tracing loan proceeds can determine if the proceeds were deposited into hidden accounts.
B. Tracing loan proceeds can uncover previously hidden assets.
C. Tracing loan proceeds can determine if hidden accounts were used for loan payments.
D. Tracing loan proceeds can identify the presence of internal control weaknesses.

Which of the following is NOT one of the basic types of informational questions interviewers use to gather unbiased factual information?
A. Chronological
B. Open
C. Leading
D. Closed

Which of the following is NOT a good practice when searching the Internet for information?
A. Use multiple search engines.
B. Use common, vague keywords.
C. Exclude articles and pronouns.
D. Use filters to focus searches.

Vishal, a Certified Fraud Examiner, has just initiated an interview with Steve, a fraud suspect. After a short introduction, Vishal jokes about the fact that he and Steve are wearing the same tie and then proceeds to ask Steve about the previous night’s major sporting event. Vishal is attempting to:
A. Establish rapport.
B. Exhibit passive listening.
C. Establish the interview theme.
D. Calibrate the witness.

Martin, a fraud examiner, is conducting an interview of Stephen, a fraud suspect. Although Stephen heard all of the questions during the introductory part of the interview, he began asking Martin to repeat almost every question when they became more focused. If Stephen is being deceptive, which of the choices below is most likely the cause of Stephen’s behavior?
A. Stephen is delaying the answer so he has more time to think of what to say.
B. Stephen is trying to make sure he understands the question so that he will not make a misstatement.
C. Stephen is testing Martin’s ability to ask consistent questions.
D. Stephen is having trouble recalling the events or details related to Martin’s questions.

Hudson is investigating Ejecta Corporation and is able to obtain a copy of the account opening documents for Ejecta’s commercial bank account. Which of the following documents is Hudson most likely to find in these records?
A. A copy of the corporate resolution of Ejecta’s board authorizing the opening of the account
B. A list of all shareholders
C. A record of all shareholders’ meeting minutes
D. A copy of Ejecta’s board-authorized personnel policies

Jackson, a forensic investigator for a government agency, is conducting a criminal investigation into the alleged embezzlement of funds from the government’s Welfare Department (WD). Gordon, a WD employee, is the prime suspect. Jackson obtains a court order authorizing him to seize Gordon’s personal computer for forensic examination. Which of the following is the MOST ACCURATE statement?
A. If Gordon’s computer is running, Jackson may retrieve data from the computer directly via its normal interface if the evidence that he needs exists only in the form of volatile data.
B. If Gordon’s computer is off, Jackson should not turn it on unless he plans to use an encryption device that can guarantee that the system’s hard drive will not be accessed during startup.
C. If Gordon’s computer is running, Jackson should perform a graceful shutdown by turning it off using the normal shutdown process.
D. If Gordon’s computer is off and Jackson needs evidence that exists only in the form of volatile data, he should turn the computer on and retrieve data directly via the computer’s normal interface.

Which of the following types of files is the most difficult to recover during a digital forensic examination?
A. Deleted link (shortcut) files
B. Hidden files
C. Deleted emails
D. Overwritten files

Beta, a Certified Fraud Examiner, is conducting an admission-seeking interview of Delta, a fraud suspect. In establishing a rationalization, Beta said to Delta: “I know you didn’t do this for yourself; it was for your family.” This technique seeks to establish rationalization by:
A. Reducing Delta’s stress about possibly losing his job
B. Establishing that Delta didn’t know the action was wrong
C. Reducing Delta’s perception of the legal seriousness of the matter
D. Claiming the action was for altruistic reasons

Which of the following is the most accurate statement about Financial Intelligence Units (FIUs)?
A. Financial institutions file reports detailing suspicious or unusual financial activity with FIUs.
B. FIUs oversee the commodities markets and are an information source for all types of registration and disciplinary information regarding entities in the futures industry.
C. FIUs are self-regulatory organizations (SROs) that exercise authority to create and enforce regulations and standards in the financial industry.
D. FIUs monitor compliance with and enforce the rules of the financial markets in which they operate.

Which of the following statements concerning access to nonpublic records is MOST ACCURATE?
A. Once a criminal case is filed, all records obtained by the government are considered public records.
B. The government usually will not share nonpublic records with a fraud victim during an investigation into the underlying fraud.
C. Nonpublic records cannot be obtained by subpoena or legal order in a civil action.
D. In most jurisdictions, banks are allowed to turn over a suspect’s account information directly to a fraud victim when there is adequate evidence of wrongdoing.

Stephen is investigating the assets of ABC Shipping Corporation and wants to discover who financed the company’s new office furniture and computers. Which of the following sources, if available, would be most effective for finding this information?
A. Civil court records in the jurisdiction of the purchase
B. Organizational filings in the jurisdiction where the company is incorporated
C. The company’s regulatory securities records
D. Commercial filings involving the assets

Cynthia, a forensic investigator, is investigating Tony for alleged conspiracy and fraud in connection with the sale of land. Cynthia suspects that Tony used steganography to hide communications amongst members of his criminal conspiracy in image files. Cynthia has seized Tony’s personal computer, and she plans to analyze it for communications hidden in image files. Which of the following is a method that Cynthia can use to detect the use of steganography?
A. Looking for visual anomalies in jpeg, bmp, gif, and other image files
B. Conducting a timeframe analysis to determine when events occurred on Tony’s computer system
C. Reviewing the system and application logs that are present on Tony’s computer system
D. Identifying and comparing the logical partition size to physical drive size to identify any deleted partitions or unused disk space

Butler, a CFE, needs to obtain a copy of a statement that the CEO of Accord Investments, a venture capital firm, posted on the firm’s website sometime last year. Unfortunately, the quote has been removed from the website. Which of the following resources should Butler consult to find an earlier version of the Web page he needs?
A. The invisible Web
B. The free Web
C. The deep Web
D. The Internet archives

Which of the following is TRUE about observing the reactions of interview subjects?
A. Emotive words should be used early in the interview to observe the respondent’s emotional reaction.
B. The observation of body language is much less important than observing the words used by the subject.
C. To effectively observe reactions, an interviewer should alternate between sensitive and nonsensitive questions early in the interview.
D. The interpretation of an interview subject’s reactions requires specific skills on the part of the interviewer.

Which of the following pieces of information is usually contained on the signature card of a personal bank account?
A. The locations of any trust funds held by the person opening the account
B. The identification number of the person opening the account
C. The birth certificate and marriage records of the person opening the account
D. The thumbprint of the person opening the account

Orlando is conducting a fraud examination regarding Fast Freight, a large publicly traded corporation, and wants to find the current officers and directors of the company. Which of the following would be the best source of information for this purpose?
A. Regulatory securities records
B. The company’s corporate bylaws
C. Real property records
D. Commercial filings

 

 

 

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