CFCI Study Guide questions and answers 2026\2027 A+
Grade
Fraud
- correct answer "Any illegal acts characterized by deceit, concealment, or violation of trust. These acts
are not dependent upon the perpetrated by individuals and organizations to obtain money, property, or
services; to avoid payment or loss of services; or to secure personal or business ad-vantage."
Main types of fraud
- correct answer Internal Fraud and External Fraud
Internal Fraud
- correct answer which involves the employees of the company against which the fraud is perpetrated
External Fraud
- correct answer deceptive conduct by non-employees that
deprives the organization of value, and/or is undertaken for financial gain.
embezzlement
- correct answer theft or misappropriation of funds placed in one's trust or belonging to one's employer.
financial fraud
- correct answer "cooking the books." This type of
fraud generally refers to falsely representing the financial condition of the company, so as to inflate the
value of stock, fraudulently boost executive bonuses, or otherwise mislead shareholders, lenders,
employees, investment analysts, or other users of the information.
,Skimming (cash larceny)
- correct answer Accounts receivable fraud, this
involves simply stealing cash before it enters the organization's accounting system.
Billing Schemes
- correct answer Perpetrated by employees who cause their employer to issue a payment to a false
supplier by submitting invoices for fictitious goods or services, inflated invoices, or invoices for personal
purchases.
check tampering
- correct answer taking advantage of employee access to blank company checks, using a password to
steal computer-generated checks, or producing counterfeit checks.
Employee reimbursement scheme
- correct answer making false claims for reimbursement, or inflating or creating fictitious business
expenses. (Travel /meal reimbursement.
corruption
- correct answer Bribery, illegal gratuities, and/or extortion.
bribery
- correct answer when something of value is offered or given to influence a business decision
Illegal Gratuities
- correct answer when something of value is given to an employee to reward a business decision.
Extortion
- correct 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
- correct 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
- correct answer the creation, sale, or use of a counterfeit credit card, or the use of a stolen credit or
debit card.
C.N.P
- correct answer Card not present transactions
identity fraud
- correct 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
- correct answer the fraudulent acquisition or stealing of confidential personal information.
2 categories that encompass Fraud
- correct answer Theft (stealing money, ID, or assests) and deception (cooking the books, lying to
shareholders, employees or partners)
Myth #1 of the Financial Services
- correct answer "We have very little fraud here" ex: subprime mortgage fraud
Myth #2 of Financial Services
- correct answer "Ethics and training compliance has us covered" Fraud is not always covered in ethics
policy or training.
Myth #3 of Financial Services
- correct 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
- correct 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).
Grade
Fraud
- correct answer "Any illegal acts characterized by deceit, concealment, or violation of trust. These acts
are not dependent upon the perpetrated by individuals and organizations to obtain money, property, or
services; to avoid payment or loss of services; or to secure personal or business ad-vantage."
Main types of fraud
- correct answer Internal Fraud and External Fraud
Internal Fraud
- correct answer which involves the employees of the company against which the fraud is perpetrated
External Fraud
- correct answer deceptive conduct by non-employees that
deprives the organization of value, and/or is undertaken for financial gain.
embezzlement
- correct answer theft or misappropriation of funds placed in one's trust or belonging to one's employer.
financial fraud
- correct answer "cooking the books." This type of
fraud generally refers to falsely representing the financial condition of the company, so as to inflate the
value of stock, fraudulently boost executive bonuses, or otherwise mislead shareholders, lenders,
employees, investment analysts, or other users of the information.
,Skimming (cash larceny)
- correct answer Accounts receivable fraud, this
involves simply stealing cash before it enters the organization's accounting system.
Billing Schemes
- correct answer Perpetrated by employees who cause their employer to issue a payment to a false
supplier by submitting invoices for fictitious goods or services, inflated invoices, or invoices for personal
purchases.
check tampering
- correct answer taking advantage of employee access to blank company checks, using a password to
steal computer-generated checks, or producing counterfeit checks.
Employee reimbursement scheme
- correct answer making false claims for reimbursement, or inflating or creating fictitious business
expenses. (Travel /meal reimbursement.
corruption
- correct answer Bribery, illegal gratuities, and/or extortion.
bribery
- correct answer when something of value is offered or given to influence a business decision
Illegal Gratuities
- correct answer when something of value is given to an employee to reward a business decision.
Extortion
- correct 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
- correct 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
- correct answer the creation, sale, or use of a counterfeit credit card, or the use of a stolen credit or
debit card.
C.N.P
- correct answer Card not present transactions
identity fraud
- correct 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
- correct answer the fraudulent acquisition or stealing of confidential personal information.
2 categories that encompass Fraud
- correct answer Theft (stealing money, ID, or assests) and deception (cooking the books, lying to
shareholders, employees or partners)
Myth #1 of the Financial Services
- correct answer "We have very little fraud here" ex: subprime mortgage fraud
Myth #2 of Financial Services
- correct answer "Ethics and training compliance has us covered" Fraud is not always covered in ethics
policy or training.
Myth #3 of Financial Services
- correct 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
- correct 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).
