CFCI Study Guide REAL EXAM
Complete Questions and Guide Answers
100% Verified Graded A+
1. Fraud
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."
2. Main types of fraud
Answer. Internal Fraud and External Fraud
3. Internal Fraud
Answer. Activities that may be criminal, committed within an organization, typically by the employee against the employer.
4. External Fraud
Answer. Deceptive conduct by non-employees that deprives the
organization of value, and/or is undertaken for financial gain.
,5. Embezzlement
Answer. The theft of money, property, or other assets of the employer.
6. Larceny
Answer. The taking away of the property of another, with the intent to convert it to his/her own use.
7. Financial Fraud
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.
8. Skimming (cash larceny)
Answer. Accounts receivable fraud, this involves simply stealing cash before it enters
the organization's accounting system.
9. Billing Schemes
Answer. Using false documentation to cause a targeted organization to issue a payment for false services and/or purchases.
10. Check Tampering
Answer. Common method (Taking advantage of employee access to blank company checks, using a password to
steal computer-generated checks or producing counterfeit checks).
11. Employee reimbursement scheme
Answer. Making false claims for reimbursement or inflating or creating fictitious business expenses. (Travel /meal
,reimbursement.
12. Corruption
Answer. Bribery, illegal gratuities, and/or extortion.
13. Bribery
Answer. When something of value is ottered or given to influence a business decision.
14. Illegal Gratuities
Answer. When something of value is given to an employee to reward a business decision.
15. Extortion
Answer. When a person demands payment or seeks to influence a business decision by threat of harm through loss of
business or personal injury.
16. Kickback Schemes
Answer. Forms of corruption involving employees and vendors, often using inflated billing or invoices for which the
employee is paid a portion of the inflated or fictitious invoice.
17. Credit Card Fraud
Answer. The creation, sale, or use of a counterfeit credit card, or the use of a stolen credit or debit card.
18. C.N.P
Answer. Card not present transactions
, 19. Identity Theft
Answer. The fraudulent acquisition or stealing of confidential personal information through social engineering.
20. Identity Fraud
Answer. Involves 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.
21. Wildcat Banking
Answer. An extreme form of what was called free banking. "A bank that issued notes without adequate security in the
period before the establishment of the national banking system in 1864".
22. 2 categories that encompass Fraud
Answer. Theft (stealing money, ID, or assets) and deception (cooking the books, lying to shareholders, employees or
partners)
23. Savings and Loan Crisis
Answer. The failure of about 1000 savings and loan banks as a result of risky business practices. The roots of the S&L crisis lay
in excessive lending, speculation, and risk-taking driven by the moral hazard created by deregulation and taxpayer bailout guarantees.
24. Myth #1 of the Financial Services
Answer. "We have very little fraud here" ex subprime mortgage fraud
25. Myth #2 of Financial Services
Answer. "Ethics and training compliance has us covered" Fraud is not always covered in ethics policy or training.
Complete Questions and Guide Answers
100% Verified Graded A+
1. Fraud
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."
2. Main types of fraud
Answer. Internal Fraud and External Fraud
3. Internal Fraud
Answer. Activities that may be criminal, committed within an organization, typically by the employee against the employer.
4. External Fraud
Answer. Deceptive conduct by non-employees that deprives the
organization of value, and/or is undertaken for financial gain.
,5. Embezzlement
Answer. The theft of money, property, or other assets of the employer.
6. Larceny
Answer. The taking away of the property of another, with the intent to convert it to his/her own use.
7. Financial Fraud
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.
8. Skimming (cash larceny)
Answer. Accounts receivable fraud, this involves simply stealing cash before it enters
the organization's accounting system.
9. Billing Schemes
Answer. Using false documentation to cause a targeted organization to issue a payment for false services and/or purchases.
10. Check Tampering
Answer. Common method (Taking advantage of employee access to blank company checks, using a password to
steal computer-generated checks or producing counterfeit checks).
11. Employee reimbursement scheme
Answer. Making false claims for reimbursement or inflating or creating fictitious business expenses. (Travel /meal
,reimbursement.
12. Corruption
Answer. Bribery, illegal gratuities, and/or extortion.
13. Bribery
Answer. When something of value is ottered or given to influence a business decision.
14. Illegal Gratuities
Answer. When something of value is given to an employee to reward a business decision.
15. Extortion
Answer. When a person demands payment or seeks to influence a business decision by threat of harm through loss of
business or personal injury.
16. Kickback Schemes
Answer. Forms of corruption involving employees and vendors, often using inflated billing or invoices for which the
employee is paid a portion of the inflated or fictitious invoice.
17. Credit Card Fraud
Answer. The creation, sale, or use of a counterfeit credit card, or the use of a stolen credit or debit card.
18. C.N.P
Answer. Card not present transactions
, 19. Identity Theft
Answer. The fraudulent acquisition or stealing of confidential personal information through social engineering.
20. Identity Fraud
Answer. Involves 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.
21. Wildcat Banking
Answer. An extreme form of what was called free banking. "A bank that issued notes without adequate security in the
period before the establishment of the national banking system in 1864".
22. 2 categories that encompass Fraud
Answer. Theft (stealing money, ID, or assets) and deception (cooking the books, lying to shareholders, employees or
partners)
23. Savings and Loan Crisis
Answer. The failure of about 1000 savings and loan banks as a result of risky business practices. The roots of the S&L crisis lay
in excessive lending, speculation, and risk-taking driven by the moral hazard created by deregulation and taxpayer bailout guarantees.
24. Myth #1 of the Financial Services
Answer. "We have very little fraud here" ex subprime mortgage fraud
25. Myth #2 of Financial Services
Answer. "Ethics and training compliance has us covered" Fraud is not always covered in ethics policy or training.
