Certified Fraud Examiner (CFE) set 1
from ACFE Questions and Answers
(2024/2025) Already Passed
Which of the following is a key characteristic of occupational fraud?
A) It only occurs in large corporations.
B) It involves external criminal activities only.
C) It is committed by employees or individuals within an organization.
D) It is limited to financial fraud.
✔✔C) It is committed by employees or individuals within an organization.
What is the first step in conducting a fraud examination?
A) Analyzing financial records.
B) Interviewing potential witnesses.
C) Identifying and assessing the fraud risk.
D) Filing a report with law enforcement.
✔✔C) Identifying and assessing the fraud risk.
Which of the following is a common method for detecting fraud in an organization?
1
,A) Increased hiring of employees.
B) Regular financial audits and reviews.
C) Ignoring employee complaints.
D) Limiting access to financial systems.
✔✔B) Regular financial audits and reviews.
Which of the following is an example of asset misappropriation?
A) Falsifying financial reports to mislead investors.
B) A manager using company funds for personal purchases.
C) Colluding with suppliers to inflate purchase prices.
D) Engaging in insider trading activities.
✔✔B) A manager using company funds for personal purchases.
What does the term “fraud triangle” refer to?
A) The three main types of fraud in the workplace.
B) The three components that contribute to the likelihood of fraud: pressure, opportunity, and
rationalization.
C) A classification system for different fraud schemes.
2
, D) The three phases of a fraud investigation.
✔✔B) The three components that contribute to the likelihood of fraud: pressure, opportunity,
and rationalization.
What is the role of internal controls in preventing fraud?
A) To increase the complexity of financial records.
B) To detect fraud after it occurs.
C) To reduce opportunities for fraud by ensuring proper oversight and accountability.
D) To provide employees with legal protection.
✔✔C) To reduce opportunities for fraud by ensuring proper oversight and accountability.
Which of the following is an example of financial statement fraud?
A) An employee taking office supplies for personal use.
B) A manager overstating revenues to meet financial targets.
C) A supplier overcharging for goods and services.
D) An employee making fraudulent insurance claims.
✔✔B) A manager overstating revenues to meet financial targets.
3
from ACFE Questions and Answers
(2024/2025) Already Passed
Which of the following is a key characteristic of occupational fraud?
A) It only occurs in large corporations.
B) It involves external criminal activities only.
C) It is committed by employees or individuals within an organization.
D) It is limited to financial fraud.
✔✔C) It is committed by employees or individuals within an organization.
What is the first step in conducting a fraud examination?
A) Analyzing financial records.
B) Interviewing potential witnesses.
C) Identifying and assessing the fraud risk.
D) Filing a report with law enforcement.
✔✔C) Identifying and assessing the fraud risk.
Which of the following is a common method for detecting fraud in an organization?
1
,A) Increased hiring of employees.
B) Regular financial audits and reviews.
C) Ignoring employee complaints.
D) Limiting access to financial systems.
✔✔B) Regular financial audits and reviews.
Which of the following is an example of asset misappropriation?
A) Falsifying financial reports to mislead investors.
B) A manager using company funds for personal purchases.
C) Colluding with suppliers to inflate purchase prices.
D) Engaging in insider trading activities.
✔✔B) A manager using company funds for personal purchases.
What does the term “fraud triangle” refer to?
A) The three main types of fraud in the workplace.
B) The three components that contribute to the likelihood of fraud: pressure, opportunity, and
rationalization.
C) A classification system for different fraud schemes.
2
, D) The three phases of a fraud investigation.
✔✔B) The three components that contribute to the likelihood of fraud: pressure, opportunity,
and rationalization.
What is the role of internal controls in preventing fraud?
A) To increase the complexity of financial records.
B) To detect fraud after it occurs.
C) To reduce opportunities for fraud by ensuring proper oversight and accountability.
D) To provide employees with legal protection.
✔✔C) To reduce opportunities for fraud by ensuring proper oversight and accountability.
Which of the following is an example of financial statement fraud?
A) An employee taking office supplies for personal use.
B) A manager overstating revenues to meet financial targets.
C) A supplier overcharging for goods and services.
D) An employee making fraudulent insurance claims.
✔✔B) A manager overstating revenues to meet financial targets.
3
