CFCI Study Guide (2025/2026 Latest Exam
Prep) | Complete Certified Fire Code Inspector
Review & Practice Q&A PDF
Fraud - correct answer"Any illegal acts characterized by deceit, concealment, or
violation of trust. These acts are not dependent upon the perpetrated by individuals and
organizations to obtain money, property, or services; to avoid payment or loss of
services; or to secure personal or business ad-vantage."
Main types of fraud - correct answerInternal Fraud and External Fraud
Internal Fraud - correct answerwhich involves the employees of the company against
which the fraud is perpetrated
External Fraud - correct answerdeceptive conduct by non-employees that
deprives the organization of value, and/or is undertaken for financial gain.
embezzlement - correct answertheft or misappropriation of funds placed in one's trust or
belonging to one's employer.
financial fraud - correct answer"cooking the books." This type of
fraud generally refers to falsely representing the financial condition of the company, so
as to inflate the value of stock, fraudulently boost executive bonuses, or otherwise
mislead shareholders, lenders, employees, investment analysts, or other users of the
information.
Skimming (cash larceny) - correct answerAccounts receivable fraud, this
involves simply stealing cash before it enters the organization's accounting system.
Billing Schemes - correct answerPerpetrated by employees who cause their employer
to issue a payment to a false supplier by submitting invoices for fictitious goods or
services, inflated invoices, or invoices for personal purchases.
check tampering - correct answertaking advantage of employee access to blank
company checks, using a password to
steal computer-generated checks, or producing counterfeit checks.
Employee reimbursement scheme - correct answermaking false claims for
reimbursement, or inflating or creating fictitious business expenses. (Travel /meal
reimbursement.
corruption - correct answerBribery, illegal gratuities, and/or extortion.
, bribery - correct answerwhen something of value is offered or given to influence a
business decision
Illegal Gratuities - correct answerwhen something of value is given to an employee to
reward a business decision.
Extortion - correct answerwhen a person demands payment or seeks to influence a
business decision by threat of harm through loss of business or personal injury.
Kickback Schemes - correct answerinvolving employees and vendors, often using
inflated billing or invoices for which the employee is paid a portion of the inflated or
fictitious invoice.
credit card fraud - correct answerthe creation, sale, or use of a counterfeit credit card, or
the use of a stolen credit or debit card.
C.N.P - correct answerCard not present transactions
identity fraud - correct answerinvolves the unauthorized use of another person's
personal data for illegal financial benefit. Involves abusing the stolen information to
transact personal business in the victim's name.
identity theft - correct answerthe fraudulent acquisition or stealing of confidential
personal information.
2 categories that encompass Fraud - correct answerTheft (stealing money, ID, or
assests) and deception (cooking the books, lying to shareholders, employees or
partners)
Myth #1 of the Financial Services - correct answer"We have very little fraud here" ex:
subprime mortgage fraud
Myth #2 of Financial Services - correct answer"Ethics and training compliance has us
covered" Fraud is not always covered in ethics policy or training.
Myth #3 of Financial Services - correct answer"Fraud is an unavoidable cost of doing
business" Fraud is usually not serious enough to destroy a financial service firm, it is
much more than necessary cost of doing business.
Chapter 1 review points - correct answer• The numbers do not lie: Fraud is a huge
worldwide problem—for all organizations.
• Financial services fraud. Seventy-one percent of financial institutions experienced
attempted payment fraud (check fraud, ACH fraud, or credit card fraud in 2017).
• Definitions of fraud. The broad definition of fraud is illegal activity representing either
theft or deception, or a combination of both.
Prep) | Complete Certified Fire Code Inspector
Review & Practice Q&A PDF
Fraud - correct answer"Any illegal acts characterized by deceit, concealment, or
violation of trust. These acts are not dependent upon the perpetrated by individuals and
organizations to obtain money, property, or services; to avoid payment or loss of
services; or to secure personal or business ad-vantage."
Main types of fraud - correct answerInternal Fraud and External Fraud
Internal Fraud - correct answerwhich involves the employees of the company against
which the fraud is perpetrated
External Fraud - correct answerdeceptive conduct by non-employees that
deprives the organization of value, and/or is undertaken for financial gain.
embezzlement - correct answertheft or misappropriation of funds placed in one's trust or
belonging to one's employer.
financial fraud - correct answer"cooking the books." This type of
fraud generally refers to falsely representing the financial condition of the company, so
as to inflate the value of stock, fraudulently boost executive bonuses, or otherwise
mislead shareholders, lenders, employees, investment analysts, or other users of the
information.
Skimming (cash larceny) - correct answerAccounts receivable fraud, this
involves simply stealing cash before it enters the organization's accounting system.
Billing Schemes - correct answerPerpetrated by employees who cause their employer
to issue a payment to a false supplier by submitting invoices for fictitious goods or
services, inflated invoices, or invoices for personal purchases.
check tampering - correct answertaking advantage of employee access to blank
company checks, using a password to
steal computer-generated checks, or producing counterfeit checks.
Employee reimbursement scheme - correct answermaking false claims for
reimbursement, or inflating or creating fictitious business expenses. (Travel /meal
reimbursement.
corruption - correct answerBribery, illegal gratuities, and/or extortion.
, bribery - correct answerwhen something of value is offered or given to influence a
business decision
Illegal Gratuities - correct answerwhen something of value is given to an employee to
reward a business decision.
Extortion - correct answerwhen a person demands payment or seeks to influence a
business decision by threat of harm through loss of business or personal injury.
Kickback Schemes - correct answerinvolving employees and vendors, often using
inflated billing or invoices for which the employee is paid a portion of the inflated or
fictitious invoice.
credit card fraud - correct answerthe creation, sale, or use of a counterfeit credit card, or
the use of a stolen credit or debit card.
C.N.P - correct answerCard not present transactions
identity fraud - correct answerinvolves the unauthorized use of another person's
personal data for illegal financial benefit. Involves abusing the stolen information to
transact personal business in the victim's name.
identity theft - correct answerthe fraudulent acquisition or stealing of confidential
personal information.
2 categories that encompass Fraud - correct answerTheft (stealing money, ID, or
assests) and deception (cooking the books, lying to shareholders, employees or
partners)
Myth #1 of the Financial Services - correct answer"We have very little fraud here" ex:
subprime mortgage fraud
Myth #2 of Financial Services - correct answer"Ethics and training compliance has us
covered" Fraud is not always covered in ethics policy or training.
Myth #3 of Financial Services - correct answer"Fraud is an unavoidable cost of doing
business" Fraud is usually not serious enough to destroy a financial service firm, it is
much more than necessary cost of doing business.
Chapter 1 review points - correct answer• The numbers do not lie: Fraud is a huge
worldwide problem—for all organizations.
• Financial services fraud. Seventy-one percent of financial institutions experienced
attempted payment fraud (check fraud, ACH fraud, or credit card fraud in 2017).
• Definitions of fraud. The broad definition of fraud is illegal activity representing either
theft or deception, or a combination of both.
