CFCI EXAM NEWEST 2026 ACTUAL EXAM COMPLETE 150 QUESTIONS AND
CORRECT ANSWERS/NEWEST UPDATE!!!
Question 1
Which of the following terms is defined as "any illegal acts characterized by deceit,
concealment, or violation of trust" used to obtain money, property, or services?
A) Larceny
B) Robbery
C) Fraud
D) Extortion
E) Embezzlement
Correct Answer: C) Fraud
Rationale: Fraud is specifically characterized by non-physical means such as deceit and the
violation of trust. Unlike robbery, which involves force, fraud relies on misrepresentation to
secure a personal or business advantage or to avoid payment.
Question 2
An employee steals cash from their employer's vault. This is an example of which specific
category of fraud?
A) External Fraud
B) Financial Fraud
C) Internal Fraud
D) Third-party Fraud
E) Identity Fraud
Correct Answer: C) Internal Fraud
Rationale: Internal fraud, also known as occupational fraud, involves the employees of the
company against which the fraud is perpetrated. Because the perpetrator is an insider with
access to the organization, it falls under the "internal" category.
Question 3
A non-employee uses a deceptive website to trick a bank into releasing customer funds. Which
type of fraud is being committed?
A) Skimming
B) Internal Fraud
C) Embezzlement
D) External Fraud
E) Shell Company Fraud
Correct Answer: D) External Fraud
Rationale: External fraud refers to deceptive conduct by non-employees. It is undertaken
for financial gain or to deprive an organization of value by individuals outside the entity's
payroll.
, 2
Question 4
Which of the following best describes "embezzlement"?
A) Offering money to a public official to influence a decision.
B) The theft or misappropriation of funds placed in one's trust or belonging to one's employer.
C) Falsely representing the financial condition of a company to shareholders.
D) Stealing a person's PII to open a new credit card.
E) Demanding payment through the threat of physical harm.
Correct Answer: B) The theft or misappropriation of funds placed in one's trust or
belonging to one's employer.
Rationale: Embezzlement occurs when a person who has been entrusted with assets (such as
an employee) illegally takes them for their own use. The key element is the violation of a
fiduciary or trust relationship.
Question 5
A CEO intentionally overstates the company's earnings to inflate stock prices and boost their
personal executive bonus. This is commonly referred to as:
A) Skimming
B) Financial Fraud
C) Check Tampering
D) Bribery
E) Identity Theft
Correct Answer: B) Financial Fraud
Rationale: Often called "cooking the books," financial fraud involves falsely representing
the financial health of an organization. This is usually done to mislead stakeholders,
lenders, or analysts for the purpose of inflating stock values or securing bonuses.
Question 6
Which type of accounts receivable fraud involves stealing cash before it is ever recorded in the
organization's accounting system?
A) Billing Scheme
B) Skimming (cash larceny)
C) Check Tampering
D) Kickback Scheme
E) Asset-based Fraud
Correct Answer: B) Skimming (cash larceny)
Rationale: Skimming is an "off-book" fraud because the cash is stolen before a record of the
transaction is made. This makes it particularly difficult to detect through traditional audits
of the accounting system.
Question 7
In a billing scheme, how does the perpetrator typically cause the employer to issue a fraudulent
, 3
payment?
A) By altering the physical numbers on a printed check.
B) By submitting invoices for fictitious goods or services.
C) By stealing a blank check from the treasurer’s office.
D) By demanding a bribe from a vendor.
E) By overstating travel expenses on a reimbursement form.
Correct Answer: B) By submitting invoices for fictitious goods or services.
Rationale: Billing schemes involve manipulating the accounts payable system. Perpetrators
submit fake invoices from "shell companies" or inflated invoices from real vendors to trick
the organization into paying for items never received.
Question 8
Which of the following is a characteristic of "check tampering"?
A) Stealing cash from the register before the sale is rung up.
B) Using a password to steal computer-generated checks or producing counterfeit checks.
C) Demanding a portion of a vendor's profit in exchange for a contract.
D) Falsifying a tax return to secure a larger loan.
E) Submitting a receipt for a personal meal as a business expense.
Correct Answer: B) Using a password to steal computer-generated checks or producing
counterfeit checks.
Rationale: Check tampering specifically involves the physical or electronic manipulation of
an organization's check-payment process. This includes unauthorized access to blank
checks or the creation of fraudulent computer-generated checks.
Question 9
An employee submits a claim for a business dinner that never actually occurred. This is an
example of which type of fraud?
A) Bribery
B) Illegal Gratuity
C) Employee reimbursement scheme
D) Corruption
E) Skimming
Correct Answer: C) Employee reimbursement scheme
Rationale: Reimbursement schemes involve making false claims for business-related
expenses (like travel or meals) or creating fictitious expenses to receive money back from
the employer.
Question 10
Which category of fraud includes bribery, illegal gratuities, and extortion?
A) Embezzlement
B) Financial Fraud
, 4
C) Identity Fraud
D) Corruption
E) External Fraud
Correct Answer: D) Corruption
Rationale: Corruption is a broad category where an employee uses their influence in a
business transaction to violate their duty to the employer for personal gain. It encompasses
bribery, illegal gratuities, and extortion.
Question 11
What is the primary difference between bribery and an illegal gratuity?
A) Bribery involves threats, while gratuities involve gifts.
B) Bribery is intended to influence a future decision; a gratuity rewards a past decision.
C) Bribery is external fraud; illegal gratuity is internal fraud.
D) Bribery involves cash; gratuities involve property.
E) There is no legal difference between the two.
Correct Answer: B) Bribery is intended to influence a future decision; a gratuity rewards a
past decision.
Rationale: Bribery is a "quid pro quo" to influence an outcome before it happens. An illegal
gratuity is a payment made to an employee after a decision has been made as a "reward"
for that favorable decision, even if there was no prior agreement.
Question 12
When a person demands payment or seeks to influence a business decision by threat of harm or
loss of business, they are committing:
A) Bribery
B) Kickback
C) Skimming
D) Extortion
E) Embezzlement
Correct Answer: D) Extortion
Rationale: Extortion is the opposite of bribery. Instead of offering a gift to influence a
decision, the perpetrator uses coercion or threats (financial, physical, or reputational) to
force a specific business outcome.
Question 13
In which type of scheme do employees and vendors work together to inflate invoices, with the
employee receiving a portion of the extra funds?
A) Skimming
B) Kickback Scheme
C) Bid Pooling
D) Lapping
CORRECT ANSWERS/NEWEST UPDATE!!!
Question 1
Which of the following terms is defined as "any illegal acts characterized by deceit,
concealment, or violation of trust" used to obtain money, property, or services?
A) Larceny
B) Robbery
C) Fraud
D) Extortion
E) Embezzlement
Correct Answer: C) Fraud
Rationale: Fraud is specifically characterized by non-physical means such as deceit and the
violation of trust. Unlike robbery, which involves force, fraud relies on misrepresentation to
secure a personal or business advantage or to avoid payment.
Question 2
An employee steals cash from their employer's vault. This is an example of which specific
category of fraud?
A) External Fraud
B) Financial Fraud
C) Internal Fraud
D) Third-party Fraud
E) Identity Fraud
Correct Answer: C) Internal Fraud
Rationale: Internal fraud, also known as occupational fraud, involves the employees of the
company against which the fraud is perpetrated. Because the perpetrator is an insider with
access to the organization, it falls under the "internal" category.
Question 3
A non-employee uses a deceptive website to trick a bank into releasing customer funds. Which
type of fraud is being committed?
A) Skimming
B) Internal Fraud
C) Embezzlement
D) External Fraud
E) Shell Company Fraud
Correct Answer: D) External Fraud
Rationale: External fraud refers to deceptive conduct by non-employees. It is undertaken
for financial gain or to deprive an organization of value by individuals outside the entity's
payroll.
, 2
Question 4
Which of the following best describes "embezzlement"?
A) Offering money to a public official to influence a decision.
B) The theft or misappropriation of funds placed in one's trust or belonging to one's employer.
C) Falsely representing the financial condition of a company to shareholders.
D) Stealing a person's PII to open a new credit card.
E) Demanding payment through the threat of physical harm.
Correct Answer: B) The theft or misappropriation of funds placed in one's trust or
belonging to one's employer.
Rationale: Embezzlement occurs when a person who has been entrusted with assets (such as
an employee) illegally takes them for their own use. The key element is the violation of a
fiduciary or trust relationship.
Question 5
A CEO intentionally overstates the company's earnings to inflate stock prices and boost their
personal executive bonus. This is commonly referred to as:
A) Skimming
B) Financial Fraud
C) Check Tampering
D) Bribery
E) Identity Theft
Correct Answer: B) Financial Fraud
Rationale: Often called "cooking the books," financial fraud involves falsely representing
the financial health of an organization. This is usually done to mislead stakeholders,
lenders, or analysts for the purpose of inflating stock values or securing bonuses.
Question 6
Which type of accounts receivable fraud involves stealing cash before it is ever recorded in the
organization's accounting system?
A) Billing Scheme
B) Skimming (cash larceny)
C) Check Tampering
D) Kickback Scheme
E) Asset-based Fraud
Correct Answer: B) Skimming (cash larceny)
Rationale: Skimming is an "off-book" fraud because the cash is stolen before a record of the
transaction is made. This makes it particularly difficult to detect through traditional audits
of the accounting system.
Question 7
In a billing scheme, how does the perpetrator typically cause the employer to issue a fraudulent
, 3
payment?
A) By altering the physical numbers on a printed check.
B) By submitting invoices for fictitious goods or services.
C) By stealing a blank check from the treasurer’s office.
D) By demanding a bribe from a vendor.
E) By overstating travel expenses on a reimbursement form.
Correct Answer: B) By submitting invoices for fictitious goods or services.
Rationale: Billing schemes involve manipulating the accounts payable system. Perpetrators
submit fake invoices from "shell companies" or inflated invoices from real vendors to trick
the organization into paying for items never received.
Question 8
Which of the following is a characteristic of "check tampering"?
A) Stealing cash from the register before the sale is rung up.
B) Using a password to steal computer-generated checks or producing counterfeit checks.
C) Demanding a portion of a vendor's profit in exchange for a contract.
D) Falsifying a tax return to secure a larger loan.
E) Submitting a receipt for a personal meal as a business expense.
Correct Answer: B) Using a password to steal computer-generated checks or producing
counterfeit checks.
Rationale: Check tampering specifically involves the physical or electronic manipulation of
an organization's check-payment process. This includes unauthorized access to blank
checks or the creation of fraudulent computer-generated checks.
Question 9
An employee submits a claim for a business dinner that never actually occurred. This is an
example of which type of fraud?
A) Bribery
B) Illegal Gratuity
C) Employee reimbursement scheme
D) Corruption
E) Skimming
Correct Answer: C) Employee reimbursement scheme
Rationale: Reimbursement schemes involve making false claims for business-related
expenses (like travel or meals) or creating fictitious expenses to receive money back from
the employer.
Question 10
Which category of fraud includes bribery, illegal gratuities, and extortion?
A) Embezzlement
B) Financial Fraud
, 4
C) Identity Fraud
D) Corruption
E) External Fraud
Correct Answer: D) Corruption
Rationale: Corruption is a broad category where an employee uses their influence in a
business transaction to violate their duty to the employer for personal gain. It encompasses
bribery, illegal gratuities, and extortion.
Question 11
What is the primary difference between bribery and an illegal gratuity?
A) Bribery involves threats, while gratuities involve gifts.
B) Bribery is intended to influence a future decision; a gratuity rewards a past decision.
C) Bribery is external fraud; illegal gratuity is internal fraud.
D) Bribery involves cash; gratuities involve property.
E) There is no legal difference between the two.
Correct Answer: B) Bribery is intended to influence a future decision; a gratuity rewards a
past decision.
Rationale: Bribery is a "quid pro quo" to influence an outcome before it happens. An illegal
gratuity is a payment made to an employee after a decision has been made as a "reward"
for that favorable decision, even if there was no prior agreement.
Question 12
When a person demands payment or seeks to influence a business decision by threat of harm or
loss of business, they are committing:
A) Bribery
B) Kickback
C) Skimming
D) Extortion
E) Embezzlement
Correct Answer: D) Extortion
Rationale: Extortion is the opposite of bribery. Instead of offering a gift to influence a
decision, the perpetrator uses coercion or threats (financial, physical, or reputational) to
force a specific business outcome.
Question 13
In which type of scheme do employees and vendors work together to inflate invoices, with the
employee receiving a portion of the extra funds?
A) Skimming
B) Kickback Scheme
C) Bid Pooling
D) Lapping
