CFCI Study Guide – Updated Latest Update 2024-
2025 Actual Exam from Credible Sources with
300+ Questions and Verified Correct Answers
Golden Ticket to Guaranteed A+ Verified by
Professor
2 categories that encompass Fraud - CORRECT ANSWER: Theft (stealing money, ID,
or assets) and deception (cooking the books, lying to shareholders, employees or
partners)
2 types of employee level embezzlement - CORRECT ANSWER: 1. Looting customer
accounts such as savings and checking by teller skimming of bank funds.
2. Exploiting control weakness in the bank's operations such as account payable and
procurement.
2 types of insider fraud threat - CORRECT ANSWER: Employee level fraud and
management level fraud
20-60-20 rule of human component of fraud - CORRECT ANSWER: 20% of people will
never commit fraud
60% are fence sitters and may commit fraud if given the opportunity
20% of people are inherently dishonest
Accounts Payable (AP) or Billing Fraud - CORRECT ANSWER: Fraud committed by a
person responsible for paying company invoices, thus giving them ample opportunity to
send checks to fake invoices or shell companies.
ACH fraud - CORRECT ANSWER: A perpetrator provides the routing number and the
account number of the victim's account to the receiving company (utility, car loans, etc)
to make the required payments.
,AML Investigation Techniques - CORRECT ANSWER: 1. Evidence Collection
2. Subject Profiling
3. Covert Evidence Gathering
4. Semi-overt Evidence Gathering
5. Overt Evidence Gathering
Approximately how many primary federal laws and regulations are there that affect
banking operation? - CORRECT ANSWER: 50
Are credit rating agencies regulated by Dodd-Frank? - CORRECT ANSWER: Yes.
Dodd-Frank created an Office of Credit Rating at the Securities and Exchange
Commission (SEC), to regulate credit ratings agencies such as Moody's and Standard &
Poor's. The agencies were harshly criticized for helping to create the 2008 recession, by
misleading investors through overrating derivatives and mortgage-backed securities—
and stating that the investment tools were worth more than their actual value.
Asset-based or working capital loan fraud - CORRECT ANSWER: Business borrowers
create false invoices to document bogus receivables, or otherwise cook the books to
appear financially sound to a lending institution.
Automated Clearing House (ACH) - CORRECT ANSWER: An electronic network for
financial transactions in the U.S. The network processes batches of debits and credits
to various financial institutions allowing for fast, safe and efficient transfer of funds.
Bank employee Collusion with outsiders - CORRECT ANSWER: Organized crime rings
recruit individuals who apply for bank jobs and over time steal the PII of customers and
give it to their handlers.
Bank Secrecy Act (BSA) - CORRECT ANSWER: The BSA was the first anti-money-
laundering law passed by the federal government. It was initially designed to deter the
use of secret foreign bank accounts and to establish a mandatory audit trail for law
enforcement by establishing regulatory reporting and recordkeeping requirements to
help the government track the movement of cash and other monetary instruments into
and out of the country through the use of financial institutions.
,Bid pooling. - CORRECT ANSWER: A process by which several bidders conspire to split
contracts, thereby ensuring that each gets a certain amount of work, which does not
require collusion with an insider.
Bid-Rigging Schemes or collusion - CORRECT ANSWER: Collusive fraud wherein an
employee helps a vendor illegally obtain a contract that was supposed to involve
competitive bidding, by the employee getting a kickback.
Billing Schemes - CORRECT ANSWER: Using false documentation to cause a targeted
organization to issue a payment for false services and/or purchases.
Bribery - CORRECT ANSWER: When something of value is offered or given to
influence a business decision.
Builder Bailout Scheme - CORRECT ANSWER: Straw buyers or legitimate buyers who
are led to believe that they are getting a good deal in buying a new home such as
incentives or loan for down payments.
Business Email Compromise (BEC) - CORRECT ANSWER: These scams often begin
with a phishing email that gives a fraudster access to an executive's Email account.
Typically, the fraudster will then send an Email purporting to be from the CEO
requesting a wire transfer of a specified amount to a specified bank account. The
trusting treasury or finance employee never thinks to question its legitimacy.
C.N.P - CORRECT ANSWER: Card not present transactions
CAATs - CORRECT ANSWER: computer assisted audit techniques
Carding - CORRECT ANSWER: An offense in which the Internet is used to traffic in and
exploit the stolen credit card, bank account, and other personal identification information
of hundreds of thousands of victims globally.
, Cashier check fraud - CORRECT ANSWER: Suspect agrees to purchase an item from a
victim and sends a check for more than the agreed upon price. The victim is instructed
to send the difference. Check bounces victim is out.
Certificate of Deposit (CD) fraud - CORRECT ANSWER: Since the CD is usually not
touched by the account holder until maturity it gives the employee opportunity to not
record deposits.
Chapter 1 review points - CORRECT ANSWER: • Statistical picture of fraud. The
numbers do not lie: Fraud is a huge worldwide problem—for all organizations.
• Financial services fraud. Seventy-four percent of financial institutions experienced
attempted payment fraud (check fraud, ACH fraud, or credit card fraud in 2020).
• 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 constantly thinking up new ways to target financial services institutions.
Chapter 2 Review points - CORRECT ANSWER: • External fraudsters are a varied and
demographically diverse group, which makes it difficult for fraud fighters to profile these
criminals. The best approach to detecting and preventing external fraud against
financial institutions is to understand the red flags of these crimes.
• Internal fraudsters do have common behavioral and personality traits, which helps to
detect suspicious activity before it is too late.
• Up to 80 percent of employees are either totally honest or honest to the point that they
will not steal except in situations in which the opportunity to do so presents itself. And
even then, these "fence sitters" may err on the side of honesty. The remaining 20
percent of your organization's employees are fundamentally dishonest and will go out of
their way to commit fraud.
• Internal fraud can be divided into two categories: employee level and management
level. There is an inverse ratio between the level of the organization at which fraud is
committed and the amount of financial loss resulting from frauds committed at each
level. Thus, while management-level frauds are committed less frequently than
2025 Actual Exam from Credible Sources with
300+ Questions and Verified Correct Answers
Golden Ticket to Guaranteed A+ Verified by
Professor
2 categories that encompass Fraud - CORRECT ANSWER: Theft (stealing money, ID,
or assets) and deception (cooking the books, lying to shareholders, employees or
partners)
2 types of employee level embezzlement - CORRECT ANSWER: 1. Looting customer
accounts such as savings and checking by teller skimming of bank funds.
2. Exploiting control weakness in the bank's operations such as account payable and
procurement.
2 types of insider fraud threat - CORRECT ANSWER: Employee level fraud and
management level fraud
20-60-20 rule of human component of fraud - CORRECT ANSWER: 20% of people will
never commit fraud
60% are fence sitters and may commit fraud if given the opportunity
20% of people are inherently dishonest
Accounts Payable (AP) or Billing Fraud - CORRECT ANSWER: Fraud committed by a
person responsible for paying company invoices, thus giving them ample opportunity to
send checks to fake invoices or shell companies.
ACH fraud - CORRECT ANSWER: A perpetrator provides the routing number and the
account number of the victim's account to the receiving company (utility, car loans, etc)
to make the required payments.
,AML Investigation Techniques - CORRECT ANSWER: 1. Evidence Collection
2. Subject Profiling
3. Covert Evidence Gathering
4. Semi-overt Evidence Gathering
5. Overt Evidence Gathering
Approximately how many primary federal laws and regulations are there that affect
banking operation? - CORRECT ANSWER: 50
Are credit rating agencies regulated by Dodd-Frank? - CORRECT ANSWER: Yes.
Dodd-Frank created an Office of Credit Rating at the Securities and Exchange
Commission (SEC), to regulate credit ratings agencies such as Moody's and Standard &
Poor's. The agencies were harshly criticized for helping to create the 2008 recession, by
misleading investors through overrating derivatives and mortgage-backed securities—
and stating that the investment tools were worth more than their actual value.
Asset-based or working capital loan fraud - CORRECT ANSWER: Business borrowers
create false invoices to document bogus receivables, or otherwise cook the books to
appear financially sound to a lending institution.
Automated Clearing House (ACH) - CORRECT ANSWER: An electronic network for
financial transactions in the U.S. The network processes batches of debits and credits
to various financial institutions allowing for fast, safe and efficient transfer of funds.
Bank employee Collusion with outsiders - CORRECT ANSWER: Organized crime rings
recruit individuals who apply for bank jobs and over time steal the PII of customers and
give it to their handlers.
Bank Secrecy Act (BSA) - CORRECT ANSWER: The BSA was the first anti-money-
laundering law passed by the federal government. It was initially designed to deter the
use of secret foreign bank accounts and to establish a mandatory audit trail for law
enforcement by establishing regulatory reporting and recordkeeping requirements to
help the government track the movement of cash and other monetary instruments into
and out of the country through the use of financial institutions.
,Bid pooling. - CORRECT ANSWER: A process by which several bidders conspire to split
contracts, thereby ensuring that each gets a certain amount of work, which does not
require collusion with an insider.
Bid-Rigging Schemes or collusion - CORRECT ANSWER: Collusive fraud wherein an
employee helps a vendor illegally obtain a contract that was supposed to involve
competitive bidding, by the employee getting a kickback.
Billing Schemes - CORRECT ANSWER: Using false documentation to cause a targeted
organization to issue a payment for false services and/or purchases.
Bribery - CORRECT ANSWER: When something of value is offered or given to
influence a business decision.
Builder Bailout Scheme - CORRECT ANSWER: Straw buyers or legitimate buyers who
are led to believe that they are getting a good deal in buying a new home such as
incentives or loan for down payments.
Business Email Compromise (BEC) - CORRECT ANSWER: These scams often begin
with a phishing email that gives a fraudster access to an executive's Email account.
Typically, the fraudster will then send an Email purporting to be from the CEO
requesting a wire transfer of a specified amount to a specified bank account. The
trusting treasury or finance employee never thinks to question its legitimacy.
C.N.P - CORRECT ANSWER: Card not present transactions
CAATs - CORRECT ANSWER: computer assisted audit techniques
Carding - CORRECT ANSWER: An offense in which the Internet is used to traffic in and
exploit the stolen credit card, bank account, and other personal identification information
of hundreds of thousands of victims globally.
, Cashier check fraud - CORRECT ANSWER: Suspect agrees to purchase an item from a
victim and sends a check for more than the agreed upon price. The victim is instructed
to send the difference. Check bounces victim is out.
Certificate of Deposit (CD) fraud - CORRECT ANSWER: Since the CD is usually not
touched by the account holder until maturity it gives the employee opportunity to not
record deposits.
Chapter 1 review points - CORRECT ANSWER: • Statistical picture of fraud. The
numbers do not lie: Fraud is a huge worldwide problem—for all organizations.
• Financial services fraud. Seventy-four percent of financial institutions experienced
attempted payment fraud (check fraud, ACH fraud, or credit card fraud in 2020).
• 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 constantly thinking up new ways to target financial services institutions.
Chapter 2 Review points - CORRECT ANSWER: • External fraudsters are a varied and
demographically diverse group, which makes it difficult for fraud fighters to profile these
criminals. The best approach to detecting and preventing external fraud against
financial institutions is to understand the red flags of these crimes.
• Internal fraudsters do have common behavioral and personality traits, which helps to
detect suspicious activity before it is too late.
• Up to 80 percent of employees are either totally honest or honest to the point that they
will not steal except in situations in which the opportunity to do so presents itself. And
even then, these "fence sitters" may err on the side of honesty. The remaining 20
percent of your organization's employees are fundamentally dishonest and will go out of
their way to commit fraud.
• Internal fraud can be divided into two categories: employee level and management
level. There is an inverse ratio between the level of the organization at which fraud is
committed and the amount of financial loss resulting from frauds committed at each
level. Thus, while management-level frauds are committed less frequently than
