CFCI STUDY GUIDE – UPDATED EXAM
WITH ALL NEEDED TO PASS
Fraud m- mcorrect manswers-"Any millegal macts mcharacterized mby mdeceit,
mconcealment, mor mviolation mof mtrust. mThese macts mare mnot mdependent mupon
mthe mperpetrated mby mindividuals mand morganizations mto mobtain mmoney,
mproperty, mor mservices; mto mavoid mpayment mor mloss mof mservices; mor mto
msecure mpersonal mor mbusiness mad-vantage."
Main mtypes mof mfraud m- mcorrect manswers-Internal mFraud mand mExternal
mFraud
,Internal mFraud m- mcorrect manswers-Activities mthat mmay mbe mcriminal,
mcommitted mwithin man morganization, mtypically mby mthe memployee magainst mthe
memployer.
External mFraud m- mcorrect manswers-Deceptive mconduct mby mnon-employees
mthat
deprives mthe morganization mof mvalue, mand/or mis mundertaken mfor mfinancial
mgain.
Embezzlement m- mcorrect manswers-The mtheft mof mmoney, mproperty, mor mother
massets mof mthe memployer.
Larceny m- mcorrect manswers-The mtaking maway mof mthe mproperty mof manother,
mwith mthe mintent mto mconvert mit mto mhis/her mown muse.
Financial mFraud m- mcorrect manswers-"Cooking mthe mbooks." mThis mtype mof
mfraud mgenerally mrefers mto mfalsely mrepresenting mthe mfinancial mcondition mof
mthe mcompany, mso mas mto minflate mthe mvalue mof mstock, mfraudulently mboost
mexecutive mbonuses, mor motherwise mmislead mshareholders, mlenders,
memployees, minvestment manalysts, mor mother musers mof mthe minformation.
Skimming m(cash mlarceny) m- mcorrect manswers-Accounts mreceivable mfraud, mthis
minvolves msimply mstealing mcash mbefore mit menters mthe morganization's
maccounting msystem.
Billing mSchemes m- mcorrect manswers-Using mfalse mdocumentation mto mcause ma
mtargeted morganization mto missue ma mpayment mfor mfalse mservices mand/or
mpurchases.
Check mTampering m- mcorrect manswers-Common mmethod m(Taking madvantage
mof memployee maccess mto mblank mcompany mchecks, musing ma mpassword mto
steal mcomputer-generated mchecks mor mproducing mcounterfeit mchecks).
Employee mreimbursement mscheme m- mcorrect manswers-Making mfalse mclaims
mfor mreimbursement mor minflating mor mcreating mfictitious mbusiness mexpenses.
m(Travel m/meal mreimbursement.
Corruption m- mcorrect manswers-Bribery, millegal mgratuities, mand/or mextortion.
Bribery m- mcorrect manswers-When msomething mof mvalue mis moffered mor mgiven
mto minfluence ma mbusiness mdecision.
Illegal mGratuities m- mcorrect manswers-When msomething mof mvalue mis mgiven mto
man memployee mto mreward ma mbusiness mdecision.
, Extortion m- mcorrect manswers-When ma mperson mdemands mpayment mor mseeks
mto minfluence ma mbusiness mdecision mby mthreat mof mharm mthrough mloss mof
mbusiness mor mpersonal minjury.
Kickback mSchemes m- mcorrect manswers-Forms mof mcorruption minvolving
memployees mand mvendors, moften musing minflated mbilling mor minvoices mfor
mwhich mthe memployee mis mpaid ma mportion mof mthe minflated mor mfictitious
minvoice.
Credit mCard mFraud m- mcorrect manswers-The mcreation, msale, mor muse mof ma
mcounterfeit mcredit mcard, mor mthe muse mof ma mstolen mcredit mor mdebit mcard.
C.N.P m- mcorrect manswers-Card mnot mpresent mtransactions
Identity mTheft m- mcorrect manswers-The mfraudulent macquisition mor mstealing mof
mconfidential mpersonal minformation mthrough msocial mengineering.
Identity mFraud m- mcorrect manswers-Involves mthe munauthorized muse mof
manother mperson's mpersonal mdata mfor millegal mfinancial mbenefit. mInvolves
mabusing mthe mstolen minformation mto mtransact mpersonal mbusiness min mthe
mvictim's mname.
Wildcat mBanking m- mcorrect manswers-An mextreme mform mof mwhat mwas mcalled
mfree mbanking. m"A mbank mthat missued mnotes mwithout madequate msecurity min
mthe mperiod mbefore mthe mestablishment mof mthe mnational mbanking msystem min
m1864".
2 mcategories mthat mencompass mFraud m- mcorrect manswers-Theft m(stealing
mmoney, mID, mor massets) mand mdeception m(cooking mthe mbooks, mlying mto
mshareholders, memployees mor mpartners)
Savings mand mLoan mCrisis m- mcorrect manswers-The mfailure mof mabout m1000
msavings mand mloan mbanks mas ma mresult mof mrisky mbusiness mpractices. mThe
mroots mof mthe mS&L mcrisis mlay min mexcessive mlending, mspeculation, mand
mrisk-taking mdriven mby mthe mmoral mhazard mcreated mby mderegulation mand
mtaxpayer mbailout mguarantees.
Myth m#1 mof mthe mFinancial mServices m- mcorrect manswers-"We mhave mvery
mlittle mfraud mhere" mex: msubprime mmortgage mfraud
Myth m#2 mof mFinancial mServices m- mcorrect manswers-"Ethics mand mtraining
mcompliance mhas mus mcovered" mFraud mis mnot malways mcovered min methics
mpolicy mor mtraining.
Myth m#3 mof mFinancial mServices m- mcorrect manswers-"Fraud mis man
munavoidable mcost mof mdoing mbusiness" mFraud mis musually mnot mserious
WITH ALL NEEDED TO PASS
Fraud m- mcorrect manswers-"Any millegal macts mcharacterized mby mdeceit,
mconcealment, mor mviolation mof mtrust. mThese macts mare mnot mdependent mupon
mthe mperpetrated mby mindividuals mand morganizations mto mobtain mmoney,
mproperty, mor mservices; mto mavoid mpayment mor mloss mof mservices; mor mto
msecure mpersonal mor mbusiness mad-vantage."
Main mtypes mof mfraud m- mcorrect manswers-Internal mFraud mand mExternal
mFraud
,Internal mFraud m- mcorrect manswers-Activities mthat mmay mbe mcriminal,
mcommitted mwithin man morganization, mtypically mby mthe memployee magainst mthe
memployer.
External mFraud m- mcorrect manswers-Deceptive mconduct mby mnon-employees
mthat
deprives mthe morganization mof mvalue, mand/or mis mundertaken mfor mfinancial
mgain.
Embezzlement m- mcorrect manswers-The mtheft mof mmoney, mproperty, mor mother
massets mof mthe memployer.
Larceny m- mcorrect manswers-The mtaking maway mof mthe mproperty mof manother,
mwith mthe mintent mto mconvert mit mto mhis/her mown muse.
Financial mFraud m- mcorrect manswers-"Cooking mthe mbooks." mThis mtype mof
mfraud mgenerally mrefers mto mfalsely mrepresenting mthe mfinancial mcondition mof
mthe mcompany, mso mas mto minflate mthe mvalue mof mstock, mfraudulently mboost
mexecutive mbonuses, mor motherwise mmislead mshareholders, mlenders,
memployees, minvestment manalysts, mor mother musers mof mthe minformation.
Skimming m(cash mlarceny) m- mcorrect manswers-Accounts mreceivable mfraud, mthis
minvolves msimply mstealing mcash mbefore mit menters mthe morganization's
maccounting msystem.
Billing mSchemes m- mcorrect manswers-Using mfalse mdocumentation mto mcause ma
mtargeted morganization mto missue ma mpayment mfor mfalse mservices mand/or
mpurchases.
Check mTampering m- mcorrect manswers-Common mmethod m(Taking madvantage
mof memployee maccess mto mblank mcompany mchecks, musing ma mpassword mto
steal mcomputer-generated mchecks mor mproducing mcounterfeit mchecks).
Employee mreimbursement mscheme m- mcorrect manswers-Making mfalse mclaims
mfor mreimbursement mor minflating mor mcreating mfictitious mbusiness mexpenses.
m(Travel m/meal mreimbursement.
Corruption m- mcorrect manswers-Bribery, millegal mgratuities, mand/or mextortion.
Bribery m- mcorrect manswers-When msomething mof mvalue mis moffered mor mgiven
mto minfluence ma mbusiness mdecision.
Illegal mGratuities m- mcorrect manswers-When msomething mof mvalue mis mgiven mto
man memployee mto mreward ma mbusiness mdecision.
, Extortion m- mcorrect manswers-When ma mperson mdemands mpayment mor mseeks
mto minfluence ma mbusiness mdecision mby mthreat mof mharm mthrough mloss mof
mbusiness mor mpersonal minjury.
Kickback mSchemes m- mcorrect manswers-Forms mof mcorruption minvolving
memployees mand mvendors, moften musing minflated mbilling mor minvoices mfor
mwhich mthe memployee mis mpaid ma mportion mof mthe minflated mor mfictitious
minvoice.
Credit mCard mFraud m- mcorrect manswers-The mcreation, msale, mor muse mof ma
mcounterfeit mcredit mcard, mor mthe muse mof ma mstolen mcredit mor mdebit mcard.
C.N.P m- mcorrect manswers-Card mnot mpresent mtransactions
Identity mTheft m- mcorrect manswers-The mfraudulent macquisition mor mstealing mof
mconfidential mpersonal minformation mthrough msocial mengineering.
Identity mFraud m- mcorrect manswers-Involves mthe munauthorized muse mof
manother mperson's mpersonal mdata mfor millegal mfinancial mbenefit. mInvolves
mabusing mthe mstolen minformation mto mtransact mpersonal mbusiness min mthe
mvictim's mname.
Wildcat mBanking m- mcorrect manswers-An mextreme mform mof mwhat mwas mcalled
mfree mbanking. m"A mbank mthat missued mnotes mwithout madequate msecurity min
mthe mperiod mbefore mthe mestablishment mof mthe mnational mbanking msystem min
m1864".
2 mcategories mthat mencompass mFraud m- mcorrect manswers-Theft m(stealing
mmoney, mID, mor massets) mand mdeception m(cooking mthe mbooks, mlying mto
mshareholders, memployees mor mpartners)
Savings mand mLoan mCrisis m- mcorrect manswers-The mfailure mof mabout m1000
msavings mand mloan mbanks mas ma mresult mof mrisky mbusiness mpractices. mThe
mroots mof mthe mS&L mcrisis mlay min mexcessive mlending, mspeculation, mand
mrisk-taking mdriven mby mthe mmoral mhazard mcreated mby mderegulation mand
mtaxpayer mbailout mguarantees.
Myth m#1 mof mthe mFinancial mServices m- mcorrect manswers-"We mhave mvery
mlittle mfraud mhere" mex: msubprime mmortgage mfraud
Myth m#2 mof mFinancial mServices m- mcorrect manswers-"Ethics mand mtraining
mcompliance mhas mus mcovered" mFraud mis mnot malways mcovered min methics
mpolicy mor mtraining.
Myth m#3 mof mFinancial mServices m- mcorrect manswers-"Fraud mis man
munavoidable mcost mof mdoing mbusiness" mFraud mis musually mnot mserious
