NYC Associate Fraud Investigator Exam | Latest Update
2026/2027 | 200 Questions and Verified Answers | NYC DOI
Civil Service Test Prep | A+ Graded
SECTION 1: FRAUD INVESTIGATION PRINCIPLES & METHODOLOGIES (Questions 125)
1. Which of the following best describes fraud?
A) An honest mistake made during business operations
B) Intentional deception to secure unfair or unlawful gain
C) A disagreement over contract terms
D) A civil dispute between two parties
Answer: B
Rationale: Fraud involves deliberate deception with the intent to gain something unlawfully. Honest
mistakes or disputes are not considered fraud.
2. The primary purpose of a fraud investigation is to:
A) Punish all individuals suspected of wrongdoing
B) Determine facts through systematic examination of evidence
C) Eliminate all financial risks immediately
D) Replace internal management controls
Answer: B
Rationale: A fraud investigation focuses on gathering and analyzing facts to establish what occurred and
who may be responsible.
,3. The primary objective of a fraud investigator is to:
A) Issue fines
B) Detect and prevent fraudulent activity
C) Provide legal representation
D) Collect taxes
Answer: B
Rationale: Fraud investigators focus on identifying, investigating, and preventing fraudulent schemes
rather than enforcing taxes or providing legal defense.
4. Which of the following is an example of occupational fraud?
A) Credit card theft by a stranger
B) An employee embezzling company funds
C) Tax evasion by a corporation
D) Identity theft through phishing
Answer: B
Rationale: Occupational fraud occurs when employees misuse their position to commit fraud against
their employer.
,5. The Fraud Triangle consists of which three elements?
A) Opportunity, Motivation, and Rationalization
B) Intent, Collusion, and Execution
C) Aggravation, Mitigation, and Perpetration
D) Desire, Capability, and Vulnerability
Answer: A
Rationale: The Fraud Triangle states that three elements must be present for an individual to commit
fraud: a perceived unshareable financial need (motivation/pressure), an opportunity to exploit, and a
way to justify the act (rationalization).
6. Which factor should an organization NOT consider when deciding whether to investigate?
A) Possible cost of the investigation
B) Perceived strength of the predication
C) Possible public exposure resulting from the investigation
D) All of the above should be considered
Answer: D
Rationale: All of these factors—cost, strength of predication, and public exposure—should be carefully
considered before initiating an investigation.
7. Which type of evidence is generally considered the most reliable in fraud investigations?
A) Hearsay statements
, B) Documentary evidence
C) Verbal accusations
D) Internet rumors
Answer: B
Rationale: Documents, such as bank records or contracts, are concrete and verifiable, making them
highly reliable in investigations.
8. What role does chain of custody play in fraud investigations?
A) Assigns blame
B) Ensures evidence is collected, preserved, and documented properly
C) Determines financial penalties
D) Establishes witness credibility
Answer: B
Rationale: Chain of custody ensures evidence integrity by documenting who handled the evidence and
when, from collection to disposition.
9. A city employee claims 40 hours of overtime but surveillance shows them at a movie theater for 6 of
those hours. What is the best initial step?
A) Confront the employee immediately
B) Write a final report
C) Obtain time records and surveillance log for comparison
D) Ignore it because it is a minor amount
2026/2027 | 200 Questions and Verified Answers | NYC DOI
Civil Service Test Prep | A+ Graded
SECTION 1: FRAUD INVESTIGATION PRINCIPLES & METHODOLOGIES (Questions 125)
1. Which of the following best describes fraud?
A) An honest mistake made during business operations
B) Intentional deception to secure unfair or unlawful gain
C) A disagreement over contract terms
D) A civil dispute between two parties
Answer: B
Rationale: Fraud involves deliberate deception with the intent to gain something unlawfully. Honest
mistakes or disputes are not considered fraud.
2. The primary purpose of a fraud investigation is to:
A) Punish all individuals suspected of wrongdoing
B) Determine facts through systematic examination of evidence
C) Eliminate all financial risks immediately
D) Replace internal management controls
Answer: B
Rationale: A fraud investigation focuses on gathering and analyzing facts to establish what occurred and
who may be responsible.
,3. The primary objective of a fraud investigator is to:
A) Issue fines
B) Detect and prevent fraudulent activity
C) Provide legal representation
D) Collect taxes
Answer: B
Rationale: Fraud investigators focus on identifying, investigating, and preventing fraudulent schemes
rather than enforcing taxes or providing legal defense.
4. Which of the following is an example of occupational fraud?
A) Credit card theft by a stranger
B) An employee embezzling company funds
C) Tax evasion by a corporation
D) Identity theft through phishing
Answer: B
Rationale: Occupational fraud occurs when employees misuse their position to commit fraud against
their employer.
,5. The Fraud Triangle consists of which three elements?
A) Opportunity, Motivation, and Rationalization
B) Intent, Collusion, and Execution
C) Aggravation, Mitigation, and Perpetration
D) Desire, Capability, and Vulnerability
Answer: A
Rationale: The Fraud Triangle states that three elements must be present for an individual to commit
fraud: a perceived unshareable financial need (motivation/pressure), an opportunity to exploit, and a
way to justify the act (rationalization).
6. Which factor should an organization NOT consider when deciding whether to investigate?
A) Possible cost of the investigation
B) Perceived strength of the predication
C) Possible public exposure resulting from the investigation
D) All of the above should be considered
Answer: D
Rationale: All of these factors—cost, strength of predication, and public exposure—should be carefully
considered before initiating an investigation.
7. Which type of evidence is generally considered the most reliable in fraud investigations?
A) Hearsay statements
, B) Documentary evidence
C) Verbal accusations
D) Internet rumors
Answer: B
Rationale: Documents, such as bank records or contracts, are concrete and verifiable, making them
highly reliable in investigations.
8. What role does chain of custody play in fraud investigations?
A) Assigns blame
B) Ensures evidence is collected, preserved, and documented properly
C) Determines financial penalties
D) Establishes witness credibility
Answer: B
Rationale: Chain of custody ensures evidence integrity by documenting who handled the evidence and
when, from collection to disposition.
9. A city employee claims 40 hours of overtime but surveillance shows them at a movie theater for 6 of
those hours. What is the best initial step?
A) Confront the employee immediately
B) Write a final report
C) Obtain time records and surveillance log for comparison
D) Ignore it because it is a minor amount
