CERTIFIED FRAUD EXAMINER (CFE) EXAMINATION
QUESTIONS AND CORRECT
ANSWER&EXPLANATION|GRADED A+ STUDY GUIDE
SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. The primary focus of a Certified Fraud Examiner is to:
A. Prepare tax returns
B. Detect and prevent fraud
C. Manage payroll systems
D. Conduct marketing audits
Answer: B
Rationale: CFEs specialize in fraud detection, investigation, and prevention.
2. Fraud is best defined as:
A. Honest accounting error
B. Intentional deception for personal gain
C. Budgeting mistake
D. Revenue forecasting
Answer: B
Rationale: Fraud involves intentional misrepresentation.
3. Occupational fraud is committed by:
A. External hackers only
B. Employees or insiders
C. Government regulators
D. Customers only
Answer: B
Rationale: It occurs within an organization.
4. The Fraud Triangle consists of:
,A. Assets, liabilities, equity
B. Pressure, opportunity, rationalization
C. Income, expense, tax
D. Cash, credit, debit
Answer: B
Rationale: Explains why fraud occurs.
5. Pressure in the fraud triangle refers to:
A. Opportunity to steal
B. Financial or personal motivation
C. Audit procedures
D. Accounting rules
Answer: B
Rationale: Need or incentive to commit fraud.
6. Opportunity in fraud refers to:
A. Weak internal controls
B. High salaries
C. Strong audits
D. Legal compliance
Answer: A
Rationale: Weak systems allow fraud.
7. Rationalization in fraud means:
A. Justifying unethical behavior
B. Recording transactions
C. Auditing accounts
D. Preparing reports
Answer: A
Rationale: Fraudsters justify actions.
8. Asset misappropriation includes:
, A. Stealing company assets
B. Financial forecasting
C. Budgeting
D. Payroll planning
Answer: A
Rationale: Theft or misuse of assets.
9. Financial statement fraud involves:
A. Manipulating accounting records
B. Inventory counting
C. Payroll processing
D. Tax filing
Answer: A
Rationale: Intentional misstatement of reports.
10. Corruption in fraud includes:
A. Bribery and kickbacks
B. Asset depreciation
C. Expense recording
D. Revenue recognition
Answer: A
Rationale: Abuse of power for gain.
11. A kickback is:
A. Refund from supplier
B. Secret payment for favor
C. Salary bonus
D. Tax refund
Answer: B
Rationale: Illegal incentive payment.
12. Skimming involves:
QUESTIONS AND CORRECT
ANSWER&EXPLANATION|GRADED A+ STUDY GUIDE
SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. The primary focus of a Certified Fraud Examiner is to:
A. Prepare tax returns
B. Detect and prevent fraud
C. Manage payroll systems
D. Conduct marketing audits
Answer: B
Rationale: CFEs specialize in fraud detection, investigation, and prevention.
2. Fraud is best defined as:
A. Honest accounting error
B. Intentional deception for personal gain
C. Budgeting mistake
D. Revenue forecasting
Answer: B
Rationale: Fraud involves intentional misrepresentation.
3. Occupational fraud is committed by:
A. External hackers only
B. Employees or insiders
C. Government regulators
D. Customers only
Answer: B
Rationale: It occurs within an organization.
4. The Fraud Triangle consists of:
,A. Assets, liabilities, equity
B. Pressure, opportunity, rationalization
C. Income, expense, tax
D. Cash, credit, debit
Answer: B
Rationale: Explains why fraud occurs.
5. Pressure in the fraud triangle refers to:
A. Opportunity to steal
B. Financial or personal motivation
C. Audit procedures
D. Accounting rules
Answer: B
Rationale: Need or incentive to commit fraud.
6. Opportunity in fraud refers to:
A. Weak internal controls
B. High salaries
C. Strong audits
D. Legal compliance
Answer: A
Rationale: Weak systems allow fraud.
7. Rationalization in fraud means:
A. Justifying unethical behavior
B. Recording transactions
C. Auditing accounts
D. Preparing reports
Answer: A
Rationale: Fraudsters justify actions.
8. Asset misappropriation includes:
, A. Stealing company assets
B. Financial forecasting
C. Budgeting
D. Payroll planning
Answer: A
Rationale: Theft or misuse of assets.
9. Financial statement fraud involves:
A. Manipulating accounting records
B. Inventory counting
C. Payroll processing
D. Tax filing
Answer: A
Rationale: Intentional misstatement of reports.
10. Corruption in fraud includes:
A. Bribery and kickbacks
B. Asset depreciation
C. Expense recording
D. Revenue recognition
Answer: A
Rationale: Abuse of power for gain.
11. A kickback is:
A. Refund from supplier
B. Secret payment for favor
C. Salary bonus
D. Tax refund
Answer: B
Rationale: Illegal incentive payment.
12. Skimming involves:
