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CFE Sample Questions Answers

Questions 4

According to accounting principles, ________ and ________ should be recorded or atched in the same accounting period; failing to do so violates the matching principle of AAP.

Options:

A.

Revenue and corresponding expenses

B.

Revenue and Income statement

C.

Income statement and Long-term contracts

D.

Capitalized expenses and Liabilities

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Questions 5

_________ revenues involve the recording sales of goods or services hat did not occur.

Options:

A.

Fictitious or fabricated revenues

B.

Financial revenues

C.

Red flag revenues

D.

Concealed revenues

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Questions 6

Which of the following method is NOT used to detect conflicts of interest?

Options:

A.

Tips & Complaints

B.

Review of vendor ownership files

C.

Underbillings of assets

D.

Interviews with purchasing personnel

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Questions 7

_________ assumes the business will go on indefinitely in the future.

Options:

A.

Materiality

B.

Going concern

C.

Cost

D.

Fair value

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Questions 8

Which of the following offender types in which people who take the money and run away?

Options:

A.

Absconders

B.

Long-term violators

C.

Offender types

D.

None of the above

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Questions 9

Delivery has not occurred or services have not been rendered when:

Options:

A.

Until installation and customer testing and acceptance has occurred.

B.

A written order exists but contains a right of return.

C.

Both A & B

D.

Neither A nor B

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Questions 10

Which counts sometimes can give rise to inventory theft detection?

Options:

A.

Perpetual inventory counts

B.

Physical inventory counts

C.

Concealment inventory counts

D.

None of the above

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Questions 11

Physical tampering prevention is a check tampering technique that is used to secure bankassisted controls.

Options:

A.

True

B.

False

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Questions 12

The price of an asset on which the asset is selling at on the open market in a transaction between a willing buyer and a wiling seller is called:

Options:

A.

Absolute value

B.

Fair value

C.

Cost value

D.

material value

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Questions 13

The principal way to detect omitted credits from books of account is through:

Options:

A.

Forced Balance

B.

Trend analysis

C.

Expense account

D.

None of all

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Questions 14

________ increase assets and expenses and/or decrease liabilities and/or equity

Options:

A.

Journal Entries

B.

Debit

C.

Credit

D.

None of all

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Questions 15

According to fraud tree, cash has three following schemes:

Options:

A.

Skimming, cash larceny and fraudulent disbursements

B.

Fraud analysis, skimming and cash misappropriations

C.

Cash larceny, cash distribution and fraudulent disbursements

D.

Cash distribution, skimming and fraud analysis

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Questions 16

In which approach, fraudsters produce whatever financial statements they wish, perhaps using just a typewriter or a personal computer.

Options:

A.

Organized accounting

B.

Playing the accounting

C.

Beating accounting

D.

Outside accounting system

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Questions 17

Collusion or bid-rigging between bidders is called

Options:

A.

Bribery receipt

B.

Bid solicitation

C.

To withdraw low bids

D.

Contract acceptance

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Questions 18

A voucher is:

Options:

A.

a file that includes the purchase order that was send to the vendor, the vendor invoice listing the cost and quantity of items purchased, and the internal receiving reports that verify the purchased items have been delivered.

B.

a figure that includes the sale order that was send to the dealer, the vendor invoice listing the cost and quantity of items sold, and the internal receiving reports that verify the purchased items have been delivered.

C.

a report that includes the purchase order that was send to the vendor, the vendor invoice listing the quality and quantity of items purchased, and the external receiving reports that verify the items have been sold.

D.

a mammogram that includes the purchase order that was send to the purchaser, the purchaser invoice listing the benefits and quantity of items purchased, and the internal receiving reports that verify the purchased items have been sold.

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Questions 19

Bank statement are diligently reviewed to ensure that amounts and signature have not been altered, is an activity for:

Options:

A.

Account analysis

B.

Bank reconciliation

C.

Check disbursement controls

D.

Check tampering

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Questions 20

Conflict of interest cases are more easily prevented than detected.

Options:

A.

True

B.

False

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Questions 21

One reason employees might be hesitant to use PO boxes in shell company schemes is that some businesses are specially vary of sending checks to vendors that have street addresses only.

Options:

A.

True

B.

False

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Questions 22

__________ are the amounts which are owned to other entities:

Options:

A.

Supplies

B.

Expenses

C.

Assets

D.

Liabilities

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Questions 23

___________ should be examined to see that all are properly documented and that inappropriate payments have not been made to employees.

Options:

A.

Payable cash

B.

Cash advances

C.

counterfeit checks

D.

Payable checks

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Questions 24

Accounting records are designed to be kept on subjective rather than objective evidence.

Options:

A.

True

B.

False

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Questions 25

When expenses used to produce income- all of them- should be matched in a consistent manner against that income, this is referred to:

Options:

A.

Equity

B.

Accrual basis accounting

C.

Expense

D.

Financial record

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Questions 26

In physical tampering prevention technique, hidden images can be seen only when the check is held at an angle through:

Options:

A.

High-resolution sprays

B.

Holographic safety inks

C.

Watermark backers

D.

Chrome coloring

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Questions 27

Which of the four basic measures, if properly installed and implemented may help prevent inventory fraud?

Options:

A.

Proper documentation, segregation of duties, independent checks and physical safeguards

B.

Proper documentation, segregation of duties, independent checks and inventory control

C.

Proper documentation, physical padding, independent checks and physical safeguards

D.

prenumbered affiliations, segregation of duties, independent checks and physical safeguards

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Questions 28

Fraudsters use the accounting system as a tool to generate the results they want in ___________ approach:

Options:

A.

Organized accounting

B.

Playing the accounting

C.

beating accounting

D.

All of the above

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Questions 29

____________ corrupt employees can cause inventory to be fraudulently delivered to themselves or accomplices.

Options:

A.

False shipping slip

B.

False packing slip

C.

Fraudulent inventory slip

D.

False credit slip

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Questions 30

___________ should be examined to see that all are properly documented and that inappropriate payments have not been made to employees.

Options:

A.

Payable cash

B.

Cash advances

C.

counterfeit checks

D.

Payable checks

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Questions 31

In which of the following process, all bidders are legally supposed to be placed on the same plane of equality, bidding on the same terms and conditions?

Options:

A.

Bid-rigging

B.

Kickbacks

C.

Competitive bidding

D.

Bid solicitation

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Questions 32

The difference between assets and liabilities is called:

Options:

A.

Equity

B.

Expense

C.

Revenue

D.

Income statement

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Questions 33

___________ is to allow the owner, investors, creditors and others with an interest to know the appropriate book worth of the business at a particular date.

Options:

A.

Equity

B.

Balance sheet

C.

Income statement

D.

Financial record

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Questions 34

Verify supporting documentation on outstanding checks written for a material amount is a test used to conduct for:

Options:

A.

Check disbursement

B.

Bank confirmation

C.

Bank confirmation

D.

Cut-off statements

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Questions 35

The most common method for billing scheme is:

Options:

A.

Register

B.

Tips

C.

Accident

D.

None of the above

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Questions 36

Depreciation is especially applicable when companies try to overvalue their assets and net worth; the lower their depreciation expense, the higher the company’s profits.

Options:

A.

True

B.

False

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Questions 37

____________ is a summary of the account balances carried in a ledger.

Options:

A.

Balance sheet

B.

Income statement

C.

Financial statement

D.

General journal

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Questions 38

In ___________ scheme, an employee creates false vouchers or submits false invoices to the employer.

Options:

A.

Sale requisition

B.

Purchase requisition

C.

Voucher handling

D.

Cash generating

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Questions 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.

Options:

A.

Fraudulent statement

B.

Misappropriations

C.

Conservatism

D.

Matching

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Questions 40

Larceny is the scheme in which an employee simply takes inventory from the company premises without attempting to conceal it in the books and records.

Options:

A.

True

B.

False

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Questions 41

The principle behind full disclosure is:

Options:

A.

Any material deviation from GAAP must be explained to the reader of the financial information.

B.

Any material deviation from SAS must be explained to the writer oh the financial information.

C.

Any material deviation from GAAP must be explained to writer of the financial information.

D.

None of above

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Questions 42

______________ can be detected by closely examining the documentation submitted with the cash receipts.

Options:

A.

Voided purchases

B.

Fictitious refunds

C.

Approved transaction

D.

None of the above

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Questions 43

By removing a tangible asset from the business (a debit), the books will be ___________ by the exact amount of the tangible asset misappropriated.

Options:

A.

Journal Entries

B.

Out-of-balance

C.

False debits

D.

None of all

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Questions 44

In Cressey’s fraud triangle, its three of the legs are Opportunity, Pressure and

Options:

A.

Violation

B.

Isolation

C.

Rationalization

D.

None of the above

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Questions 45

The seller’s price to the buyer is not fixed or determinable when:

Options:

A.

When the price is not contingent on some future events

B.

The transaction includes an option to exchange the product for others.

C.

A service or membership fee is not subject predictable cancellation during the contract period.

D.

Payment terms are not extended for a substantial period.

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Questions 46

Which sale occurs when the accomplice of the employee-fraudster “buys” merchandise, but the employee does not ring up the sale, and the accomplice takes the merchandise without making any payment?

Options:

A.

Whole sale

B.

Fake sale

C.

Fraudster sale

D.

Preliminary sale

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Questions 47

Another way to eliminate competition in the solicitation phase of the selection process is to:

Options:

A.

Solicit bid from fictitious suppliers

B.

Solicit transaction from fictitious vendors

C.

Solicit bid-splitting from fictitious vendors

D.

None of the above

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Questions 48

A running count that records how much inventory should be on hand is referred to:

Options:

A.

Altered inventory

B.

Perpetual inventory

C.

Shrinking inventory

D.

Fictitious inventory

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Questions 49

Financial statement fraud is committed by:

Options:

A.

Organized criminals

B.

Mid and lower level employees

C.

Senior Management

D.

All of the above

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Questions 50

Which of the following is NOT standard of generally accepted accounting principles?

Options:

A.

Conservatism

B.

Cost

C.

Full disclosure

D.

Quality control

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Questions 51

______________ can be detected by closely examining the documentation submitted with the cash receipts.

Options:

A.

Voided purchases

B.

Fictitious refunds

C.

Approved transaction

D.

None of the above

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Questions 52

Statistical sampling enables the examiner to predict the occurrence rate for the population and therefore determine with some accuracy the error rate, or the potential for fraud.

Options:

A.

True

B.

False

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Questions 53

When employees avoid detection in a refund scheme to keep the sizes of the disbursement low, is referred to:

Options:

A.

Small disbursements

B.

Very small disbursements

C.

Simple disbursements

D.

None of the above

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Questions 54

The most common method for billing scheme is:

Options:

A.

Register

B.

Tips

C.

Accident

D.

None of the above

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Questions 55

In physical tampering prevention technique, hidden images can be seen only when the check is held at an angle through:

Options:

A.

High-resolution sprays

B.

Holographic safety inks

C.

Watermark backers

D.

Chrome coloring

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Exam Code: CFE
Exam Name: Certified Fraud Examiner
Last Update: Jul 14, 2024
Questions: 186
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