NYC Associate Fraud Investigator Exam 2026/2027
Practice Questions, Verified Answers & Detailed Explanations | NYC Civil
Service Study Guide
Section 1: Fraud Investigation Principles & Methodologies (Questions 1–25)
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. What is the fraud triangle?
A) Profit, Oversight, Risk
B) Pressure, Opportunity, Rationalization
C) Planning, Execution, Concealment
D) Access, Authority, Intent
Answer B: — Pressure, Opportunity, Rationalization
Rationale: The fraud triangle identifies three conditions typically present
when fraud occurs: pressure/incentive, opportunity, and rationalization. ---
3. Which of the following is NOT a category used in the fraud triangle plus
inquiry paradigm?
A) Theft investigative techniques
B) Concealment investigative techniques
C) Action investigative techniques
D) Conversion investigative techniques
Answer C: — Action investigative techniques
Rationale: The fraud triangle plus inquiry paradigm includes theft,
concealment, and conversion investigative techniques. Action is not a
recognized category. ---
,4. When beginning an investigation, it is important that fraud examiners use
techniques that will:
A) Not arouse suspicion
B) Identify the perpetrator
C) Determine the amount of the fraud
D) Identify when the fraud occurred
Answer A: — Not arouse suspicion
Rationale: The primary concern at the beginning of an investigation is to not
arouse suspicion, which could lead to destruction of evidence or flight of the
perpetrator. ---
5. Which of the following is the most useful method in identifying possible
suspects when beginning a fraud investigation?
A) Preparing an identification chart
B) Preparing a vulnerability chart
C) Preparing a surveillance log
D) Hiring a PI to tail the subject
Answer B: — Preparing a vulnerability chart
Rationale: A vulnerability chart maps weaknesses in internal controls and
identifies who had opportunity and access, helping narrow the pool of
potential suspects. ---
, 6. What is the PRIMARY difference between a fraud investigation and an
audit?
A) Audits are always confidential
B) Fraud investigations focus on intentional wrongdoing; audits focus on
compliance and accuracy
C) Investigations are conducted by accountants
D) Audits require warrants
Answer B: — Fraud investigations focus on intentional wrongdoing; audits
focus on compliance and accuracy
Rationale: Audits focus on compliance with laws, regulations, and policies,
and may identify errors or weaknesses. Fraud investigations specifically target
intentional wrongdoing and deceptive conduct. ---
7. Which of the following is an example of "occupational fraud"?
A) Identity theft by a stranger
B) Credit card fraud by an external hacker
C) An employee embezzling funds from their employer
D) Phishing scams targeting customers
Answer C: — An employee embezzling funds from their employer
Rationale: Occupational fraud involves the misuse of one's position for
personal gain through organized schemes. It includes asset misappropriation,
Practice Questions, Verified Answers & Detailed Explanations | NYC Civil
Service Study Guide
Section 1: Fraud Investigation Principles & Methodologies (Questions 1–25)
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. What is the fraud triangle?
A) Profit, Oversight, Risk
B) Pressure, Opportunity, Rationalization
C) Planning, Execution, Concealment
D) Access, Authority, Intent
Answer B: — Pressure, Opportunity, Rationalization
Rationale: The fraud triangle identifies three conditions typically present
when fraud occurs: pressure/incentive, opportunity, and rationalization. ---
3. Which of the following is NOT a category used in the fraud triangle plus
inquiry paradigm?
A) Theft investigative techniques
B) Concealment investigative techniques
C) Action investigative techniques
D) Conversion investigative techniques
Answer C: — Action investigative techniques
Rationale: The fraud triangle plus inquiry paradigm includes theft,
concealment, and conversion investigative techniques. Action is not a
recognized category. ---
,4. When beginning an investigation, it is important that fraud examiners use
techniques that will:
A) Not arouse suspicion
B) Identify the perpetrator
C) Determine the amount of the fraud
D) Identify when the fraud occurred
Answer A: — Not arouse suspicion
Rationale: The primary concern at the beginning of an investigation is to not
arouse suspicion, which could lead to destruction of evidence or flight of the
perpetrator. ---
5. Which of the following is the most useful method in identifying possible
suspects when beginning a fraud investigation?
A) Preparing an identification chart
B) Preparing a vulnerability chart
C) Preparing a surveillance log
D) Hiring a PI to tail the subject
Answer B: — Preparing a vulnerability chart
Rationale: A vulnerability chart maps weaknesses in internal controls and
identifies who had opportunity and access, helping narrow the pool of
potential suspects. ---
, 6. What is the PRIMARY difference between a fraud investigation and an
audit?
A) Audits are always confidential
B) Fraud investigations focus on intentional wrongdoing; audits focus on
compliance and accuracy
C) Investigations are conducted by accountants
D) Audits require warrants
Answer B: — Fraud investigations focus on intentional wrongdoing; audits
focus on compliance and accuracy
Rationale: Audits focus on compliance with laws, regulations, and policies,
and may identify errors or weaknesses. Fraud investigations specifically target
intentional wrongdoing and deceptive conduct. ---
7. Which of the following is an example of "occupational fraud"?
A) Identity theft by a stranger
B) Credit card fraud by an external hacker
C) An employee embezzling funds from their employer
D) Phishing scams targeting customers
Answer C: — An employee embezzling funds from their employer
Rationale: Occupational fraud involves the misuse of one's position for
personal gain through organized schemes. It includes asset misappropriation,
