CFCI 2025 EXAM PREP MADE EASY –
COMPLETE QUESTIONS AND SOLVED
ANSWERS.
Making multiple reimbursement claim submissions. - When two or more
employees dine together
while on the road, each may submit a forged claim for reimbursement for his or her own
meal even
though a single member of the group paid the entire bill. Similar practices often occur
with shared
taxis, airport shuttle services, and other expenses. (T&E Fraud)
Management-Level self dealing - Self dealing is approving loans to ones self
(pg 87)
Manipulating interest rates - Libor (London Inter-Bank Offered Rate) is an
average interest rate calculated through submissions of interest rates by major banks
across the world. The scandal arose when it was discovered that banks were falsely
inflating or deflating their rates so as to profit from trades, or to give the impression
that they were more creditworthy than they were
Manipulating liabilities - Neglecting to record expenses and burying vendor
invoices, management can make it appear as if expenses for a particular reporting
period are lower than they actually are, thereby making earnings appear greater than
they are.
Materials Waste - Fraudster orders more material than necessary on an existing
purchase order and reports the excess s waste or scrap.
, money laundering - When illegally obtained money is put into the banking
system then using the banking system for the money to appear legitimate.
2 types of employee level embezzlement - Looting customer accounts such as
savings and checking by teller skimming o bank funds and (#2) exploiting control
weakness in the bank's operations such as account payable and procurement.
2 types of insider fraud threat - Employee level fraud and management level
fraud
20-60-20 rule of human component of fraud - 20% of people will never
commit fraud
60% are fence sitters and may commit fraud if given the opportunity
20% of people inherently dishonest (pg 29)
Accounts Payable (AP) or Billing Fraud - Fraud committed by a person
responsible for paying company invoices, thus giving them ample opportunity to send
checks to fake invoices or shell companies.
ACH fraud - A perpetrator provides the routing number and the account
number of the victim's account to the receiving company (utility, car loans, etc) to make
the required payments.
Asset-based or working capital loan fraud - business borrowers create false
invoices to document bogus receivables, or otherwise cook the books to appear
financially sound to a lending institution.
, Automated Clearing House (ACH) - An electronic network for financial
transactions in the U.S. The network processes batches of debits and credits to various
financial institutions allowing for fast, safe and efficient transfer of funds.
Bank employee Collusion with outsiders - Organized crime rings recruit
individuals who apply for bank jobs and over time steal the PII of customers and give it
to their handlers.
Bank Secrecy Act (BSA) - designed to deter the use of secret foreign bank
accounts and to establish a mandatory audit
trail for law enforcement by establishing regulatory reporting and record-keeping
requirements to help the government track the movement of cash and other monetary
instruments into and out of the country through the use of financial institutions.
Bid pooling. - A process by which several bidders conspire to split contracts,
thereby ensuring that each gets a certain amount of work, which does not require
collusion with an insider (Submission phase).
Bid splitting. - when competitive bidding is required only for contracts or
purchases over a minimum amount., a corrupt procurement employee may accept a
bribe from a vendor to split the contracts so that each of the two amounts falls below
the competitive bidding threshold. (Pre-solicitation phase)
Bid-Rigging Schemes or collusion - collusive fraud wherein an employee helps
a vendor illegally obtain a contract that was supposed to involve competitive bidding,
by the employee getting a kickback.
COMPLETE QUESTIONS AND SOLVED
ANSWERS.
Making multiple reimbursement claim submissions. - When two or more
employees dine together
while on the road, each may submit a forged claim for reimbursement for his or her own
meal even
though a single member of the group paid the entire bill. Similar practices often occur
with shared
taxis, airport shuttle services, and other expenses. (T&E Fraud)
Management-Level self dealing - Self dealing is approving loans to ones self
(pg 87)
Manipulating interest rates - Libor (London Inter-Bank Offered Rate) is an
average interest rate calculated through submissions of interest rates by major banks
across the world. The scandal arose when it was discovered that banks were falsely
inflating or deflating their rates so as to profit from trades, or to give the impression
that they were more creditworthy than they were
Manipulating liabilities - Neglecting to record expenses and burying vendor
invoices, management can make it appear as if expenses for a particular reporting
period are lower than they actually are, thereby making earnings appear greater than
they are.
Materials Waste - Fraudster orders more material than necessary on an existing
purchase order and reports the excess s waste or scrap.
, money laundering - When illegally obtained money is put into the banking
system then using the banking system for the money to appear legitimate.
2 types of employee level embezzlement - Looting customer accounts such as
savings and checking by teller skimming o bank funds and (#2) exploiting control
weakness in the bank's operations such as account payable and procurement.
2 types of insider fraud threat - Employee level fraud and management level
fraud
20-60-20 rule of human component of fraud - 20% of people will never
commit fraud
60% are fence sitters and may commit fraud if given the opportunity
20% of people inherently dishonest (pg 29)
Accounts Payable (AP) or Billing Fraud - Fraud committed by a person
responsible for paying company invoices, thus giving them ample opportunity to send
checks to fake invoices or shell companies.
ACH fraud - A perpetrator provides the routing number and the account
number of the victim's account to the receiving company (utility, car loans, etc) to make
the required payments.
Asset-based or working capital loan fraud - business borrowers create false
invoices to document bogus receivables, or otherwise cook the books to appear
financially sound to a lending institution.
, Automated Clearing House (ACH) - An electronic network for financial
transactions in the U.S. The network processes batches of debits and credits to various
financial institutions allowing for fast, safe and efficient transfer of funds.
Bank employee Collusion with outsiders - Organized crime rings recruit
individuals who apply for bank jobs and over time steal the PII of customers and give it
to their handlers.
Bank Secrecy Act (BSA) - designed to deter the use of secret foreign bank
accounts and to establish a mandatory audit
trail for law enforcement by establishing regulatory reporting and record-keeping
requirements to help the government track the movement of cash and other monetary
instruments into and out of the country through the use of financial institutions.
Bid pooling. - A process by which several bidders conspire to split contracts,
thereby ensuring that each gets a certain amount of work, which does not require
collusion with an insider (Submission phase).
Bid splitting. - when competitive bidding is required only for contracts or
purchases over a minimum amount., a corrupt procurement employee may accept a
bribe from a vendor to split the contracts so that each of the two amounts falls below
the competitive bidding threshold. (Pre-solicitation phase)
Bid-Rigging Schemes or collusion - collusive fraud wherein an employee helps
a vendor illegally obtain a contract that was supposed to involve competitive bidding,
by the employee getting a kickback.
