NYC Associate Fraud Investigator Practice
Exam 2026 | 100 Most Tested Questions
Collection & Verified Detailed Answers |
Tutor Verified Success Exam) Graded A+
1. What is the primary purpose of a fraud investigation?
A. To guarantee a criminal conviction
B. To determine whether fraud occurred and establish the relevant
facts
C. To punish the suspected employee
D. To recover every dollar immediately
Answer: B. To determine whether fraud occurred and establish the
relevant facts
Rationale: A fraud investigator's central responsibility is to establish
facts objectively, determine whether fraudulent conduct occurred,
and document the evidence supporting the conclusion.
2. Which principle is most important when interviewing a fraud
suspect?
A. Assume guilt before beginning
B. Use accusatory language immediately
C. Remain objective and allow the subject to explain the
circumstances
D. Reveal all evidence at the beginning
Answer: C. Remain objective and allow the subject to explain the
circumstances
,Rationale: Investigators should avoid premature conclusions. An
objective interview can produce admissions, explanations,
inconsistencies, and additional investigative leads.
3. Which document is generally considered primary evidence of a
transaction?
A. An investigator's opinion
B. A rumor from a coworker
C. The original transaction record
D. An anonymous social-media comment
Answer: C. The original transaction record
Rationale: Original business records provide direct documentation of
the transaction and are generally more reliable than hearsay or
unsupported opinions.
4. An employee submits the same expense receipt twice. This is
most appropriately classified as:
A. Duplicate reimbursement
B. Identity theft
C. Bribery
D. Money laundering
Answer: A. Duplicate reimbursement
Rationale: Submitting the same expense more than once to obtain
additional reimbursement is a common form of expense fraud.
5. What is the best first step after receiving a credible allegation of
fraud?
,A. Immediately confront the suspect
B. Delete irrelevant records
C. Assess and document the allegation and preserve potentially
relevant evidence
D. Notify the media
Answer: C. Assess and document the allegation and preserve
potentially relevant evidence
Rationale: Early preservation of evidence helps prevent alteration or
destruction of records and establishes a reliable investigative
foundation.
6. Which situation is a classic red flag for procurement fraud?
A. Multiple vendors submitting competitive bids
B. One employee repeatedly steering contracts to a company owned
by a relative
C. A purchase order being properly approved
D. A vendor submitting required documentation
Answer: B. One employee repeatedly steering contracts to a
company owned by a relative
Rationale: Undisclosed relationships between employees and vendors
can indicate conflicts of interest, favoritism, kickbacks, or other
procurement misconduct.
7. What does segregation of duties accomplish?
A. It eliminates the need for audits
B. It prevents one individual from controlling all major stages of a
transaction
C. It guarantees that fraud cannot occur
D. It increases employee compensation
, Answer: B. It prevents one individual from controlling all major
stages of a transaction
Rationale: Separating authorization, custody, recording, and
reconciliation functions reduces opportunities for fraud and makes
concealment more difficult.
8. Which is an example of an analytical fraud indicator?
A. An employee's favorite color
B. A sudden unexplained increase in vendor payments
C. The office temperature
D. An employee's job title alone
Answer: B. A sudden unexplained increase in vendor payments
Rationale: Unusual changes in transaction volume, timing, amounts,
or patterns can identify potentially fraudulent activity requiring
further investigation.
9. What should an investigator do when evidence contradicts the
investigator's initial theory?
A. Ignore the contradictory evidence
B. Destroy the evidence
C. Reassess the working theory
D. Modify the evidence
Answer: C. Reassess the working theory
Rationale: Investigations must remain evidence-driven. Contradictory
information should be evaluated rather than suppressed.
10. Which interview question is generally most appropriate at the
beginning of an investigative interview?
Exam 2026 | 100 Most Tested Questions
Collection & Verified Detailed Answers |
Tutor Verified Success Exam) Graded A+
1. What is the primary purpose of a fraud investigation?
A. To guarantee a criminal conviction
B. To determine whether fraud occurred and establish the relevant
facts
C. To punish the suspected employee
D. To recover every dollar immediately
Answer: B. To determine whether fraud occurred and establish the
relevant facts
Rationale: A fraud investigator's central responsibility is to establish
facts objectively, determine whether fraudulent conduct occurred,
and document the evidence supporting the conclusion.
2. Which principle is most important when interviewing a fraud
suspect?
A. Assume guilt before beginning
B. Use accusatory language immediately
C. Remain objective and allow the subject to explain the
circumstances
D. Reveal all evidence at the beginning
Answer: C. Remain objective and allow the subject to explain the
circumstances
,Rationale: Investigators should avoid premature conclusions. An
objective interview can produce admissions, explanations,
inconsistencies, and additional investigative leads.
3. Which document is generally considered primary evidence of a
transaction?
A. An investigator's opinion
B. A rumor from a coworker
C. The original transaction record
D. An anonymous social-media comment
Answer: C. The original transaction record
Rationale: Original business records provide direct documentation of
the transaction and are generally more reliable than hearsay or
unsupported opinions.
4. An employee submits the same expense receipt twice. This is
most appropriately classified as:
A. Duplicate reimbursement
B. Identity theft
C. Bribery
D. Money laundering
Answer: A. Duplicate reimbursement
Rationale: Submitting the same expense more than once to obtain
additional reimbursement is a common form of expense fraud.
5. What is the best first step after receiving a credible allegation of
fraud?
,A. Immediately confront the suspect
B. Delete irrelevant records
C. Assess and document the allegation and preserve potentially
relevant evidence
D. Notify the media
Answer: C. Assess and document the allegation and preserve
potentially relevant evidence
Rationale: Early preservation of evidence helps prevent alteration or
destruction of records and establishes a reliable investigative
foundation.
6. Which situation is a classic red flag for procurement fraud?
A. Multiple vendors submitting competitive bids
B. One employee repeatedly steering contracts to a company owned
by a relative
C. A purchase order being properly approved
D. A vendor submitting required documentation
Answer: B. One employee repeatedly steering contracts to a
company owned by a relative
Rationale: Undisclosed relationships between employees and vendors
can indicate conflicts of interest, favoritism, kickbacks, or other
procurement misconduct.
7. What does segregation of duties accomplish?
A. It eliminates the need for audits
B. It prevents one individual from controlling all major stages of a
transaction
C. It guarantees that fraud cannot occur
D. It increases employee compensation
, Answer: B. It prevents one individual from controlling all major
stages of a transaction
Rationale: Separating authorization, custody, recording, and
reconciliation functions reduces opportunities for fraud and makes
concealment more difficult.
8. Which is an example of an analytical fraud indicator?
A. An employee's favorite color
B. A sudden unexplained increase in vendor payments
C. The office temperature
D. An employee's job title alone
Answer: B. A sudden unexplained increase in vendor payments
Rationale: Unusual changes in transaction volume, timing, amounts,
or patterns can identify potentially fraudulent activity requiring
further investigation.
9. What should an investigator do when evidence contradicts the
investigator's initial theory?
A. Ignore the contradictory evidence
B. Destroy the evidence
C. Reassess the working theory
D. Modify the evidence
Answer: C. Reassess the working theory
Rationale: Investigations must remain evidence-driven. Contradictory
information should be evaluated rather than suppressed.
10. Which interview question is generally most appropriate at the
beginning of an investigative interview?
