Certified Fraud Examiner Exam Questions & Answers Already Passed!!

Boiler Room - An outbound call center; sells questionable investments. Extortion - Acquiring through force or fear. Current Ratio - Current assets divided by current liabilities; Embezzlement decreases ratio; Liability concealment increases ratio. Scooter Scam - Billing for low quality/unnecessary products. Sliding - Adding insurance coverage without notifying client; insurer makes more money, client makes no claims. Debits - Increases asset/expense accounts; On the left side; Decreases liabilities, revenues, owner's equity; DC ADE LER (DebitCredit/ AssestsDrawExpenses/ LiabilityEquityRevenue) Credits - Decreases asset/expense accounts; On the right side; Increases liabilities, revenues, owner's equity; DC ADE LER (DebitCredit/ AssestsDrawExpenses/ LiabilityEquityRevenue) Verifier - Reviews deals/records customer consent (telemarketing); scammer verifiers lie Bid Splitting Scheme - When a large project is broken into small projects; Designed to avoid competitive method requirements. Positive Pay - When banks and companies coordinate to detect fraudulent checks. Income Smoothing - Reporting revenues and expenses under the wrong periods.Turnkey - Provides telemarketing scammers with collateral (laundering, merchandise, phone lists, etc.) Debt to Equity Ratio - Total Liabilities/Total Equity The largest amount of insurance fraud occurs in the ______________ industry - Health Care The 6 types of healthcare fraud - (1) Falsified prescriptions (2) Excessive supplies (3) Failure to deliver/billing before delivering (4) Excessive billing (5) Billing uninsured items (6) Scooter scams In construction, the purpose of developer overhead is to ... - supply the developer with operating capital. Organization Crime - Crime committed by groups Occupational Crime - Crime committed by individuals, professionals, officials Corruption (3 Types) - Bribes (giving/taking), aiding, abetting Does advertising influence economic crimes? - Yes, no one has to settle for second best (See "Crimes of the Middle Class" book); most defendants are male w/ moderate social status. Overstating Revenues - When a launderer records more income than actually generated. Spoliation of Evidence - Destruction of evidence The 3 stages of money laundering - Placement, Layering, Integration Placement - 1st stage of money laundering; Illegal profits are placed into a financial system (Place, Layer, Integrate)Layering - 2nd stage of money laundering; Illegal profits are transferred to different accounts/ businesses/ currencies to obscure detection (Place, Layer, Integrate) Integration - 3rd state of money laundering; Illegal profits are reintroduced as legitimate profits (Place, Layer, Integrate) Rule 703 of the U.S. Federal Rules of Evidence states that ... - An expert may base an opinion on (1) Firsthand observations (2) Facts, data, or opinions presented at trial (3) Facts, data or opinions conveyed outside of court (4) an expert may testify on facts disclosed before OR at the hearing Edwin H. Sutherland coined the term ... - White-collar crime T/F? The risk of missing management fraud is greater than the risk of missing employee fraud. - True, because managers have more power than employees