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CFE-Investigation Sample Questions Answers

Questions 4

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 memorandum 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?

Options:

A.

Referring to the informant in the memorandum using the informant's initials

B.

Using information from the informant in his final report

C.

Creating a receipt regarding the cash payment

D.

Compensating the informant with cash

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Questions 5

After completing all necessary investigative steps. Erica, a Certified Fraud Examiner (CFE), is reasonably sure that Justine, her primary suspect, committed the fraud in question. Before scheduling an admission-seeking interview with Justine, what else should Erica be reasonably sure of?

Options:

A.

That Justine will confess to the accusation when prompted

B.

That Justine's employer will take disciplinary action against Justine if she confesses

C.

That the interview's time, place, and content can De controlled

D.

That no other person was involved in the fraud n question

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Questions 6

Which of the following is TRUE of a well-written fraud examination report?

Options:

A.

The details of witness interviews should be reported in a separate memorandum.

B.

The report should discuss only the evidence that substantiates the fraud allegation

C.

All information provided by witnesses, regardless of relevance, should be included in the report.

D.

Technical terms should be included whenever possible to convey professionalism.

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Questions 7

Eugene is conducting an admission-seeking interview of a suspect. During the interview, the suspect frequently looks away from Eugene while responding to questions. Eugene can safely conclude that the suspect is dishonest due to his failure to maintain eye contact.

Options:

A.

True

B.

False

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Questions 8

Assuming that a jurisdiction has prohibited pretexting with financial institutes, which of the following actions would constitute illegal pretexting?

Options:

A.

Withdrawing another person's funds using a stolen bank account number and PIN

B.

Digging through a person's trash to obtain their bank account information

C.

Making purchases with a credit card account under a fictitious identity

D.

Falsely claiming to be the spouse of an account holder to access bank records

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Questions 9

Which of the following statements about how fraud examiners should approach fraud examinations is FALSE?

Options:

A.

In most examinations, fraud examiners should start interviewing the least involved candidates and proceed toward those who are potentially more involved.

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 adhere to the fraud theory approach.

D.

When conducting fraud examinations, fraud examiners should begin with general information that is known and then move to the more specific details.

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Questions 10

Which of the following is considered a best practice for preserving the confidentiality of a fraud investigation?

Options:

A.

Suspend all employees involved in the investigation pending the investigation's outcome.

B.

Ensure that the investigation is conducted at the direction of, or under the supervision of. a government official

C.

Avoid using email or other electronic means to transmit confidential case information

D.

Implement a blanket policy prohibiting all employees from discussing anything related to employee investigations

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Questions 11

Jana. the controller of XYZ Company, notices that the company's hotel expenses increased substantially from the prior year She wants to check to see if this increase is reasonable by comparing hotel expenses from both years to the number of days XYZ"s employees traveled. Which of the following data analysis functions would be the MOST USEFUL in helping Jana analyze these two variables?

Options:

A.

Correlation analysis

B.

Duplicate testing

C.

Verifying multiples of a number

D.

Ben ford’s Law analysis

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Questions 12

Elizabeth, a Certified Fraud Examiner (CFE), 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 several pictures and posters on the wall, 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?

Options:

A.

Move the interview to a room without pictures or wall hangings to prevent distractions

B.

Open the door so that Shannon feels free to leave at any time

C.

Place a table between her and Shannon to create a psychological barrier

D.

All of the above

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Questions 13

Which of the following is NOT a best practice for obtaining a signed statement?

Options:

A.

Add subsequent facts to the statement as an addendum.

B.

Have the suspect write out the entire statement in their own handwriting

C.

Prepare separate statements for unrelated offenses

D.

Have two individuals witness the signing of the document when possible.

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Questions 14

Which of the following is a measure that can help avoid alerting suspected perpetrators who are under investigation?

Options:

A.

Terminate the suspected employee.

B.

Notify everyone in the affected department

C.

Delay taking any action.

D.

Inform only those who need to know.

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Questions 15

Lisa, a fraud examiner at a private company, receives an anonymous call from a potential whistleblower. The whistleblower is hesitant to reveal their identity but will do so if it can be Kept fully confidential. Which of the following statements is MOST ACCURATE?

Options:

A.

Lisa may offer the whistleblower full confidentiality because they are not a suspect

B.

Lisa should explain that she will try her best to keep the whistleblower"s identity confidential.

C.

Lisa should state that she will not be able to keep the whistleblower's identity confidential because all information must be disclosed to management

D.

Lisa may promise the whistleblower full confidentiality, even if she knows her statement is untrue, because the lie is ultimately beneficial to her employer.

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Questions 16

Tyson, a fraud examiner, is planning an interview with Brianna. the girlfriend of the central suspect in Tyson's investigation. Previous interviews with others have revealed that Brianna tends to be very protective of her boyfriend How should Tyson approach the interview with Brianna?

Options:

A.

Avoid interviewing Brianna if possible due to Brianna's potential volatility.

B.

Conduct the interview with as little notice as possible so Brianna will be unprepared

C.

Provide Brianna with advance notice prior to the interview to inhibit resentment.

D.

Ask Brianna when she would prefer to be interviewed in an effort to provoke cooperation.

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Questions 17

Which of the following is a common characteristic that asset hiders look for in the financial vehicles they use to conceal their assets?

Options:

A.

Accessibility

B.

Transparency

C.

Exclusivity

D.

Traceability

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Questions 18

If the following statements were included in a fraud examination report of a qualified expert, which of them would be IMPROPER?

Options:

A.

"When asked a second time about the amount of funds missing, the suspect contradicted their previous testimony."

B.

"The evidence shows that between S1 million and S1.5 million in assets were transferred to an offshore account."

C.

"The organization must address the inadequate separation of accounting duties to prevent such an event from happening again."

D.

"In light of all the evidence, the suspect is most likely guilty of fraud against the organization."

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Questions 19

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 Lam/ questions?

Options:

A.

Ask questions in random order to prevent Larry from knowing what question comes next.

B.

Start with questions about known information and work toward unknown information

C.

Start with general questions and move toward specific questions

D.

Ask questions seeking general information before seeking details

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Questions 20

Gilbert is preparing to conduct a covert investigation. Before acting, he wants to wnte a memorandum documenting his plan. Which of the following pieces of information should he include in this memorandum?

Options:

A.

The information expected to be gained from the operation

B.

The identities of any confidential sources to be used in the operation

C.

His first impression regarding the subject's culpability

D.

All of the above

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Questions 21

Which of the following is TRUE of a follow-up/recommendations section in a written fraud examination report?

Options:

A.

A follow-up/recommendations section is not a required part of every written fraud examination report

B.

A follow-up/recommendations section calculates the amount of loss caused by any misconduct identified during the investigation

C.

A follow-up/recommendations section must include a list of organizational failings that contnbuted to the fraud

D.

All of the above

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Questions 22

Martin is a fraud examiner. He contacts Dianne for the purpose of conducting a routine, information-gathering interview. Dianne says that she wants her coworker. Sheila, whom Martin also plans to interview, to be present during the interview. Martin should:

Options:

A.

Interview Dianne and Sheila separately

B.

Allow Sheila to be present but only if she does not speak

C.

Interview Dianne and Sheila together by himself

D.

Interview Dianne and Sheila together, but bring in a second interviewer

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Questions 23

Shane, a Certified Fraud Examiner (CFE). is investigating Larsen. who is active on various social networking sites. Shane wants to search and extract information from Larson's social media postings so that it can be used in court as evidence Which of the following is the MOST ACCURATE statement regarding what Shane should do when conducting a social media investigation of Larsen?

Options:

A.

Shane should conduct a forensic shutdown of his computer to preserve the metadata in the social networking sites.

B.

Shane should preserve the information from the social networking sites so that it can be established as authentic if used in court.

C.

Shane should email himself the links of the postings so that he can retrieve them later.

D.

Shane should preserve the information by saving the links of the postings in his 'bookmarks"

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Questions 24

Which of the following is the MOST IMPORTANT question for a fraud examiner to ask before commencing a legal action to recover assets?

Options:

A.

"Is there a relevant statute of limitations9"

B.

"Does the suspect already have a criminal record?"

C.

"Is the suspect guilty of the fraudulent act?''

D.

"Are nonlegal recovery methods or remedies available?''

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Questions 25

When planning for the interview phase of an investigation, which of the following steps should NOT be taken by the fraud examiner?

Options:

A.

Consider what the interview is intended to accomplish and state an objective.

B.

Review the case file to ensure that important information has not been overlooked

C.

Prepare a detailed list of questions to ask the subject during the interview.

D.

Ensure that the interview is held in a venue where the subject will feel Uncomfortable

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Questions 26

Which of the following is NOT a step a fraud examiner must take before seizing evidence in a digital forensic investigation?

Options:

A.

Obtain and become familiar with any legal orders that apply to the investigation

B.

Assemble an investigation team comprised only of outside digital forensic experts

C.

Ensure that only trained professionals employ any software used in a forensic capacity

D.

Determine whether there are privacy issues related to the item(s) to be searched.

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Questions 27

Which of the following is NOT true with regard to tracing the disposition of loan proceeds?

Options:

A.

Tracing loan proceeds can reveal previous civil offenses committed by the subject

B.

Tracing loan proceeds can determine if the proceeds were deposited into hidden accounts

C.

Tracing loan proceeds can uncover previously unknown witnesses

D.

Tracing loan proceeds can determine if hidden accounts were used for loan payments.

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Questions 28

Which of the following is NOT true about observing the reactions of interview subjects?

Options:

A.

The interpretation of an interview subject's reactions requires specific skills on the part of the interviewer.

B.

The observation of a subjects body language is often just as important as the observation of the words used by the subject.

C.

Emotive words should be used early in the interview to observe the respondents emotional reaction.

D.

To effectively observe reactions, an interviewer should move from less sensitive to more sensitive questions as the interview progresses.

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Questions 29

When planning for the interview phase of an investigation, which of the following steps should NOT be taken by the fraud examiner?

Options:

A.

Consider what the interview is intended to accomplish and state an objective.

B.

Review the case file to ensure that important information has not been overlooked

C.

Prepare a detailed list of questions to ask the subject during the interview.

D.

Ensure that the interview is held in a venue where the subject will feel Uncomfortable

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Questions 30

Which of the following is NOT one of the main limitations of conducting a search for public records using online databases?

Options:

A.

Online records companies are difficult to find.

B.

Fraud examiners must validate the accuracy of the records obtained online

C.

The online record might only be a brief abstract of the original.

D.

Fraud examiners often must search for public records in multiple jurisdictions.

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Questions 31

Management at Oak Company has asked Arthur, an internal auditor, to implement a data analysis program to search for warning signs of potential fraud within the company. Which of the following steps should Arthur conduct first to MOST effectively use data analysis techniques for such an initiative?

Options:

A.

Analyze the data.

B.

Cleanse and normalize the data

C.

Build a profile of potential frauds.

D.

Obtain the data.

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Questions 32

Rachel, a fraud suspect, has decided to confess to Linda, a Certified Fraud Examiner (CFE). In obtaining a verbal confession from Rachel. Linda should obtain all of the following items of information EXCEPT:

Options:

A.

The approximate beginning and end dates of the fraud

B.

A statement from Rachel that her conduct was an accident

C.

A general estimate of the amount of money involved

D.

Rachel's motive for the offense

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Questions 33

Which of the following types of data is BEST suited for a BenfordTs Law analysis?

Options:

A.

Employee identification numbers

B.

Telephone numbers

C.

A listing of payment amounts

D.

Vendor addresses

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Questions 34

Why do fraud examiners perform analysis on unstructured, or textual, data?

Options:

A.

To determine whether the footnotes to the financial statements are fairly presented

B.

To find an admission of fraud m an email or other communication that can be presented in court

C.

To categorize data to reveal patterns, sentiments, and relationships indicative of fraud

D.

To figure out whether someone is lying or telling the truth based on context duet

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Questions 35

Due to risks of illicit transactions, most jurisdictions require financial institutions to obtain information about which of the following from an institution with which they have a foreign correspondent relationship?

Options:

A.

The institution's ownership details

B.

The institution's investment portfolio

C.

The institution's client loan profiles

D.

The institution's tax statements

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Questions 36

Which of the following would be most useful in determining when a specific document file was created?

Options:

A.

The document's metadata

B.

Internet activity data

C.

The system tog

D.

Operating system partition

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Questions 37

Tony, a fraud examiner, believes that vendors might be submitting multiple invoices for the same sales with the hope that they will be paid more than once. He wants to ensure that no two invoices in the system have the same number. Which of the Mowing data analysis functions would be most useful for this test?

Options:

A.

Duplicate search

B.

Benford's Law analysis

C.

Correlation analysis

D.

Linear regression

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Questions 38

Which of the following is the LEAST ACCURATE statement about seizing a computer for examination?

Options:

A.

When taking a computer for examination, if the computer is off. it should remain off when it is removed.

B.

When seizing a computer that is running, it is acceptable for a fraud examiner to review the files contained on the machine prior to seizing it.

C.

Before removing a computer system from a scene for further analysis, it is important to document the system's setup with photographs or diagrams.

D.

When seizing a computer for examination, the seizing party should took around the area for passwords because many people leave passwords near their computers

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Questions 39

Why is it necessary to image a seized computer's hard drive for forensic analysis?

Options:

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

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Questions 40

Which of the following is FALSE regarding link analysis?

Options:

A.

Link analysis is a poor tool to use for investigating a money laundering scheme

B.

Link analysis can be used to map connections between entities that share an address

C.

Link analysis helps identify indirect relationships with several degrees of separation

D.

Link analysis is an effective tool for demonstrating complex networks

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Questions 41

Leslie, a fraud examiner for ACME Corporation, suspects that a salesperson for another company has defrauded ACME. Leslie wants to obtain a copy of the suspect individual's credit report and personal data from a third-party information broker If Leslie works in a jurisdiction that regulates the distribution of personal credit information, she generally can obtain the information if she has the consent of the individual.

Options:

A.

True

B.

False

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Questions 42

Marcus is trying to locate the financial statements of Acme Airlines, a multinational publicly traded corporation. Which of the following sources would be MOST EFFECTIVE for finding this information?

Options:

A.

Commercial filings

B.

Civil litigation records

C.

Organizational filings

D.

Regulatory securities records

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Questions 43

Which of the following is a recommended strategy when conducting admission-seeking interviews?

Options:

A.

Increase sympathy while downplaying implications of wrongdoing.

B.

Ensure that accusations are made in the presence of a third party to avoid potential liability

C.

Emphasize a lack of morality in the subject's actions to induce them into confessing.

D.

Use time constraints as a means to pressure the subject into making a confession.

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Questions 44

Which of the following statements concerning access to nonpublic records is FALSE?

Options:

A.

When civil litigation has commenced, a party often may obtain a subpoena or legal order for an individual's relevant bank records.

B.

A fraud examiner can request a business's bank records even if the business is not legally obligated to comply.

C.

An audit clause can be designed to allow a party to inspect the books of a business partner or vendor.

D.

During the government's criminal investigation, a fraud examiner not employed by the government has a right to access relevant documents that the government has obtained.

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Questions 45

Which of the following statements concerning access to nonpublic records is MOST ACCURATE?

Options:

A.

Once a criminal case is filed, all records obtained by the government are considered public records

B.

Nonpublic records cannot be obtained by subpoena or legal order in a civil action

C.

In most junsdictions. banks are allowed to turn over a suspect's account information directly to a fraud victim when there is adequate evidence of wrongdoing.

D.

The government usually will not share nonpublic records with a fraud victim during an investigation into the underlying fraud.

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Questions 46

When documenting interviews, it is best practice for the interviewer to.

Options:

A.

Covertly record all interviews with potential suspects.

B.

Note impressions regarding the subject's guilt or innocence.

C.

Err on the side of taking too few notes rather than too many.

D.

Write down verbatim all the information that the subject provides

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Questions 47

Which of the following sets of numbers could a fraud examiner MOST LIKELY benefit from running a Benford’s Law analysis on?

Options:

A.

Telephone numbers

B.

Vendor invoice amounts

C.

Employee identification numbers

D.

Bank account numbers

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Questions 48

Which of the following is the MOST ACCURATE statement regarding the analysis phase in digital forensic investigations?

Options:

A.

When analyzing data for evidence, fraud examiners should look for exculpatory evidence But not inculpatory evidence

B.

During the analysis phase, it is best to use just one forensic tool for identifying, extracting, and collecting digital evidence

C.

The primary concern when analyzing digital evidence is to maintain the integrity of the data at all times

D.

The analysis phase of digital forensic investigations should not commence unless it is venfied that the suspect devices do not contain relevant data

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Questions 49

If your suspect is spending suspected illicit funds on consumables (e.g.. travel and entertainment) and you need to prove their illicit income circumstantially, which of the following methods of tracing assets would yield the BEST result?

Options:

A.

expenditures method

B.

The consumables method

C.

The income method

D.

The asset method

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Questions 50

Pedro, a Certified Fraud Examiner (CFE). is conducting an admission-seeking interview of Manuel, a fraud suspect. After Pedro diffused Manuel's alibis. Manuel became withdrawn and stowty began to slouch m his chair, bowing his head and beginning to cry. What should Pedro do now?

Options:

A.

Leave the room for a short lime

B.

Ask Manuel to sit up straight

C.

Demand that Manuel stop crying.

D.

Present an alternative question.

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Questions 51

Assuming that a jurisdiction has prohibited pretexting against financial institutions, which of the following actions would constitute illegal pretexting?

Options:

A.

Intentionally making false statements on loan applications

B.

Stealing a person's mail lo obtain the person's bank account number

C.

Impersonating an account holder to access their bank records

D.

Setting up a bank account in an assumed name

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Exam Code: CFE-Investigation
Exam Name: Certified Fraud Examiner (CFE) - Investigation
Last Update: Oct 15, 2025
Questions: 170
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