Free CFE-Financial-Transactions-and-Fraud-Schemes Questions for ACFE CFE-Financial-Transactions-and-Fraud-Schemes Exam [Nov-2025]
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The Association of Certified Fraud Examiners (ACFE) is a professional organization dedicated to the prevention, detection, and deterrence of fraud. One of the ways that the ACFE achieves this mission is by offering certification programs for professionals who specialize in fraud prevention and detection. The Certified Fraud Examiner (CFE) designation is one of the most respected and recognized certifications in the field of fraud.
NEW QUESTION # 12
Which of the following is the criterion for bid solicitation?
- A. Allowing the purchaser to discuss possible employment with the contractor
- B. To withdraw low bids
- C. To falsify the bid log
- D. Containing false statements
Answer: A
NEW QUESTION # 13
Which of the following is an example of a corruption scheme?
- A. Two coworkers steal confidential information from their employer and use the stolen data to start a competing business.
- B. A public company omits recurring costs from its financial statements to make the company appear more profitable than it is.
- C. A warehouse manager receives twenty laptops in a shipment but excludes five of the laptops from the records so that they can be sold to third parties.
- D. A vendor offers the use of a beach house to a government procurement agent for free after the agent awards a contract to the vendor.
Answer: D
NEW QUESTION # 14
People commit financial statement fraud to:
- A. Conceal false business performances
- B. Preserve personal status/control
- C. Maintain personal income
- D. Stand outside the accounting system
Answer: B
NEW QUESTION # 15
_____________ involves purposeful misreporting of financial information about the organization that is intended to mislead those who read it.
- A. Asset misappropriations
- B. None of above
- C. Fraudulent statement
- D. Corruption
Answer: C
NEW QUESTION # 16
Which of the following factors is NOT included in most financial statement schemes?
- A. Improper asset valuations
- B. Persuasive Evidence
- C. Concealed liabilities and expenses
- D. Fictitious revenues
Answer: B
NEW QUESTION # 17
Skimming cases can more likely to be detected by:
- A. Internal controls
- B. occupational frauds
- C. Accidents
- D. Internal audits
Answer: C
NEW QUESTION # 18
Which of the following is a condition that facilitates insider cyberfraud?
- A. Production programs are run during the business day.
- B. Access privileges are restricted to assigned job functions.
- C. Separation of duties exists in the data center.
- D. Access logs are not reviewed by management.
Answer: B
NEW QUESTION # 19
What is sometimes used to overcome well-designed internal controls of a victim company?
- A. Collusion
- B. Rubber stamp supervisors
- C. Shell company
- D. Fraudulent invoices
Answer: A
NEW QUESTION # 20
Joe's automobile insurance policy expired in June. In August, Joe was involved in an automobile accident, and his vehicle was severely damaged. After the accident, Joe contacted his insurance company and reinstated the policy. In September, Joe then submitted a claim with a September accident date for the damages that occurred to his vehicle in August. Joe has engaged in which of the following insurance schemes?
- A. Past posting
- B. Staged accident
- C. Vehicle repair
- D. Inflated damages
Answer: C
NEW QUESTION # 21
Which of the following statements describes a best practice for preventing contract and procurement fraud?
- A. Companies should have vendor-monitoring procedures that address the red flags of all vendor schemes.
- B. Companies should conduct background checks on all vendors before they are added to the vendor master file.
- C. Companies should permit the person who maintains the vendor master file to also have authority to approve payments for invoices.
- D. Companies should restrict the monitoring of their procurement activities to once a year to ensure comparability from year to year.
Answer: B
NEW QUESTION # 22
Once the expense account is closed, it becomes a historical item and probably will never be reviewed again.
- A. False
- B. True
Answer: B
NEW QUESTION # 23
Green, an employee of ABC Corporation, formed a company called Acme Consulting. He opened a bank account in Acme's name and used his home computer to create invoices from Acme for "consulting services." In reality, Acme does not provide any services at all. It is a company in name only. Green submitted the invoices from Acme Consulting to his employer, ABC Corporation. When ABC made payment on the false invoices, Green collected and deposited them. What type of scheme has Green committed?
- A. A pay and return scheme
- B. A pass-through scheme
- C. A cash larceny scheme
- D. A shell company scheme
Answer: D
Explanation:
Explanation/Reference: https://www.millerkaplan.com/is-your-business-inadvertently-paying-a-shell-company
NEW QUESTION # 24
Which of the following statements about skimming is INCORRECT?
- A. Skimming schemes are considered on-book frauds because they leave an audit trail.
- B. Skimming schemes are generally more difficult to detect than cash larceny schemes.
- C. Skimming schemes can involve the theft of either cash sales or accounts receivable payments.
- D. Skimming schemes involve stolen customer payments that have not yet been recorded.
Answer: A
Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Intro%20to%20Fraud-Chapter%20Excerpt.pdf
NEW QUESTION # 25
Which of the following is NOT the aspect of inventory purchase?
- A. inventory for the year 2 will be much greater than year 1.
- B. might be some fraud scheme in inventory.
- C. Increase sales in year 2 are unexpected and purchase of inventory does not keep pace with the sales.
- D. Inventory purchases purposely increase in year 1 only to be liquidated in year 2.
Answer: A
NEW QUESTION # 26
White used a company vehicle for unauthorized, personal purposes while working in a different city. He provided false written and oral information regarding the use of the vehicle. The vehicle was returned without damages. What type of fraud did White commit?
- A. An expense reimbursement scheme
- B. White did not commit fraud
- C. A financial statement fraud scheme
- D. A misuse of a noncash asset
Answer: D
NEW QUESTION # 27
Occupational fraud and abuse is a (an) __________ of doing business, in much the same way that we pay expenses for electricity, taxes and wages.
- A. Balance sheet
- B. Expense
- C. Financial record
- D. Equity
Answer: B
NEW QUESTION # 28
A fraudster creates a fictitious identity by combining a person's real government identification number with a fabricated name and birthdate. This scheme can BEST be described as:
- A. Simulated identity theft
- B. Criminal identity theft
- C. Traditional identity theft
- D. Synthetic identity theft
Answer: D
NEW QUESTION # 29
Which of the following scenarios does NOT describe a card skimming or shimming scheme?
- A. When paying for a drink at a vending machine, a customer inserts their credit or debit card into a fraudulent device that scans and records their card information.
- B. A gadget attached to an ATM is used to fraudulently scan and record customers' credit or debit card information while a small camera records their PINs.
- C. While processing a payment outside of the customer's view, a retail employee uses a small device to scan and record the customer's credit or debit card information.
- D. After processing a customer's payment, a server returns with the receipt but keeps the credit or debit card hoping that the customer does not notice.
Answer: B
Explanation:
Explanation/Reference: https://www.experian.com/blogs/ask-experian/shimming-is-the-latest-credit-card-scam/#:~:text='Shimming'%20is%20an%20update%20on,number%20on%20the%20dark%20web
NEW QUESTION # 30
According to SAB 104, for the revenue to be typically considered realized or realizable and earned, which of the following criteria is NOT met:
- A. Services has been rendered
- B. Timings have been met
- C. Collectability is reasonably assured
- D. Persuasive evidence of an arrangement exists
Answer: B
NEW QUESTION # 31
Which of the following is an example of a cash larceny scheme?
- A. Paul sold insurance policies to individuals but never filed the policies with the insurance company. He then stole the customers' payments, which he was able to do because the insurance company did not know the policies existed.
- B. Emily is an accounts receivable clerk. She stole Customer A's monthly payment. When Customer B's payment arrived, she applied it to Customer A's account. When Customer C's payment arrived, she applied it to Customer B's account.
- C. Sarah returned a $250 mirror to the store. Jenna, the cashier, recorded a $350 return on the cash register and kept the remaining $100.
- D. Mark, a cashier, knew the access code for Joe's cash register. He logged in as Joe and processed transactions as usual. He then took $50 from the register at the end of his shift.
Answer: D
NEW QUESTION # 32
Accounts receivable that never get collected are a common sign of fictitious revenue schemes.
- A. False
- B. True
Answer: B
Explanation:
Explanation/Reference: https://www.brainscape.com/flashcards/financial-statement-fraud-4459788/packs/6637157
NEW QUESTION # 33
Pilar had to purchase computer equipment for ABC Corporation, her employer. Pilar created a shell company, used the shell company to purchase used computer equipment, and then resold that equipment to ABC Corporation at an increased price. This is an example of a:
- A. Need recognition scheme
- B. Pay and return scheme
- C. Pass-through scheme
- D. Cash larceny scheme
Answer: C
NEW QUESTION # 34
Which of the following is a method that a fraudster might use to conceal inventory shrinkage?
- A. Selling merchandise without recording the sale
- B. All of the above
- C. Falsely increasing the perpetual inventory record
- D. Writing off stolen inventory as scrap
Answer: B
NEW QUESTION # 35
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