CFCI STUDY GUIDE EXAM 2026
COMPREHENSIVE EXAMINATION TEST
WITH ACCURATE FULL SOLUTIONS
⩥ bribery. Answer: when something of value is offered or given to
influence a business decision
⩥ Illegal Gratuities. Answer: when something of value is given to an
employee to reward a business decision.
⩥ Extortion. Answer: when a person demands payment or seeks to
influence a business decision by threat of harm through loss of business
or personal injury.
⩥ Kickback Schemes. Answer: involving employees and vendors, often
using inflated billing or invoices for which the employee is paid a
portion of the inflated or fictitious invoice.
⩥ credit card fraud. Answer: the creation, sale, or use of a counterfeit
credit card, or the use of a stolen credit or debit card.
⩥ C.N.P. Answer: Card not present transactions
,⩥ identity fraud. Answer: involves the unauthorized use of another
person's personal data for illegal financial benefit. Involves abusing the
stolen information to transact personal business in the victim's name.
⩥ identity theft. Answer: the fraudulent acquisition or stealing of
confidential personal information.
⩥ 2 categories that encompass Fraud. Answer: Theft (stealing money,
ID, or assests) and deception (cooking the books, lying to shareholders,
employees or partners)
⩥ Myth #1 of the Financial Services. Answer: "We have very little fraud
here" ex: subprime mortgage fraud
⩥ Myth #2 of Financial Services. Answer: "Ethics and training
compliance has us covered" Fraud is not always covered in ethics policy
or training.
⩥ Myth #3 of Financial Services. Answer: "Fraud is an unavoidable cost
of doing business" Fraud is usually not serious enough to destroy a
financial service firm, it is much more than necessary cost of doing
business.
⩥ Chapter 1 review points. Answer: • The numbers do not lie: Fraud is a
huge worldwide problem—for all organizations.
, • Financial services fraud. Seventy-one percent of financial institutions
experienced attempted payment fraud (check fraud, ACH fraud, or credit
card fraud in 2017).
• Definitions of fraud. The broad definition of fraud is illegal activity
representing either theft or deception, or a combination of both.
• Myths about fraud. It is easy to become complacent about fraud, but
doing so can be very costly.
Fraud does occur in every organization, and is potentially serious
enough to cause major long-term damage.
• Main types of fraud. Countless varieties of fraud threaten financial
institutions. Fraudsters are con-
stantly thinking up new ways to target financial services institutions.
⩥ 20-60-20 rule of human component of fraud. Answer: 20% of people
will never commit fraud
60% are fence sitters and may commit fraud if given the opportunity
20% of people inherently dishonest (pg 29)
⩥ 2 types of insider fraud threat. Answer: Employee level fraud and
management level fraud
⩥ Inverse ratio between the level of organization at which fraud is
committed. Answer: Management level fraud is committed less
frequently than employee level fraud however the financial loss is
greater. (pg 30)
COMPREHENSIVE EXAMINATION TEST
WITH ACCURATE FULL SOLUTIONS
⩥ bribery. Answer: when something of value is offered or given to
influence a business decision
⩥ Illegal Gratuities. Answer: when something of value is given to an
employee to reward a business decision.
⩥ Extortion. Answer: when a person demands payment or seeks to
influence a business decision by threat of harm through loss of business
or personal injury.
⩥ Kickback Schemes. Answer: involving employees and vendors, often
using inflated billing or invoices for which the employee is paid a
portion of the inflated or fictitious invoice.
⩥ credit card fraud. Answer: the creation, sale, or use of a counterfeit
credit card, or the use of a stolen credit or debit card.
⩥ C.N.P. Answer: Card not present transactions
,⩥ identity fraud. Answer: involves the unauthorized use of another
person's personal data for illegal financial benefit. Involves abusing the
stolen information to transact personal business in the victim's name.
⩥ identity theft. Answer: the fraudulent acquisition or stealing of
confidential personal information.
⩥ 2 categories that encompass Fraud. Answer: Theft (stealing money,
ID, or assests) and deception (cooking the books, lying to shareholders,
employees or partners)
⩥ Myth #1 of the Financial Services. Answer: "We have very little fraud
here" ex: subprime mortgage fraud
⩥ Myth #2 of Financial Services. Answer: "Ethics and training
compliance has us covered" Fraud is not always covered in ethics policy
or training.
⩥ Myth #3 of Financial Services. Answer: "Fraud is an unavoidable cost
of doing business" Fraud is usually not serious enough to destroy a
financial service firm, it is much more than necessary cost of doing
business.
⩥ Chapter 1 review points. Answer: • The numbers do not lie: Fraud is a
huge worldwide problem—for all organizations.
, • Financial services fraud. Seventy-one percent of financial institutions
experienced attempted payment fraud (check fraud, ACH fraud, or credit
card fraud in 2017).
• Definitions of fraud. The broad definition of fraud is illegal activity
representing either theft or deception, or a combination of both.
• Myths about fraud. It is easy to become complacent about fraud, but
doing so can be very costly.
Fraud does occur in every organization, and is potentially serious
enough to cause major long-term damage.
• Main types of fraud. Countless varieties of fraud threaten financial
institutions. Fraudsters are con-
stantly thinking up new ways to target financial services institutions.
⩥ 20-60-20 rule of human component of fraud. Answer: 20% of people
will never commit fraud
60% are fence sitters and may commit fraud if given the opportunity
20% of people inherently dishonest (pg 29)
⩥ 2 types of insider fraud threat. Answer: Employee level fraud and
management level fraud
⩥ Inverse ratio between the level of organization at which fraud is
committed. Answer: Management level fraud is committed less
frequently than employee level fraud however the financial loss is
greater. (pg 30)
