CFCI STUDY GUIDE |2025 UPDATE |ACTUAL EXAM QUESTIONS
AND VERIFIED ANSWERS/ACCURATE SOLUTIONS |GET IT 100%
CORRECT!! ALREADY GRADED A+
What is fraud?
a) Legal business practices
b) Acts involving trust and honesty
c) Illegal acts involving deceit, concealment, or violation of trust
d) A legal way to obtain financial gain
Answer: c) Illegal acts involving deceit, concealment, or violation of trust
Rationale: Fraud involves dishonest actions to gain financial or personal advantages.
What are the two main types of fraud?
a) Cyber fraud and social fraud
b) Employee fraud and vendor fraud
c) Internal fraud and external fraud
d) Financial fraud and embezzlement
Answer: c) Internal fraud and external fraud
Rationale: Fraud is classified based on whether it involves employees (internal) or non-
employees (external).
What is internal fraud?
a) Fraud by customers
b) Fraud involving employees against their employer
c) Fraud involving fake invoices
d) Fraud conducted by third-party vendors
Answer: b) Fraud involving employees against their employer
Rationale: Internal fraud occurs when employees exploit their position to commit fraud.
What is external fraud?
a) Fraud involving employees only
b) Deceptive conduct by non-employees for financial gain
c) Theft of company funds by management
d) Overreporting of financial statements
Answer: b) Deceptive conduct by non-employees for financial gain
Rationale: External fraud is perpetrated by individuals or organizations outside the company.
, What is embezzlement?
a) Theft of funds by non-employees
b) Misappropriation of funds placed in one’s trust
c) An accounting error
d) Overcharging customers
Answer: b) Misappropriation of funds placed in one’s trust
Rationale: Embezzlement involves theft of funds entrusted to someone, often an employee.
What type of fraud is referred to as “cooking the books”?
a) Identity fraud
b) Financial fraud
c) Embezzlement
d) Skimming
Answer: b) Financial fraud
Rationale: Financial fraud involves manipulating financial records to mislead stakeholders.
What is skimming?
a) Inflating invoices
b) Stealing cash before it enters the accounting system
c) Using counterfeit checks
d) False expense claims
Answer: b) Stealing cash before it enters the accounting system
Rationale: Skimming involves theft of cash before it is recorded.
What is a billing scheme?
a) Counterfeit credit card transactions
b) Issuing false invoices to obtain payments
c) Stealing cash directly from the register
d) Creating fake expense claims
Answer: b) Issuing false invoices to obtain payments
Rationale: Billing schemes use fake invoices to extract money fraudulently.
What is check tampering?
a) Altering company bank statements
b) Unauthorized use of company checks
c) Writing personal checks for business expenses
d) Skimming funds from customers
Answer: b) Unauthorized use of company checks
Rationale: Check tampering involves fraudulently accessing or altering company checks.
, What is an employee reimbursement scheme?
a) Stealing blank checks
b) Creating fake business expenses for reimbursement
c) Falsifying company accounts
d) Submitting counterfeit receipts for purchase returns
Answer: b) Creating fake business expenses for reimbursement
Rationale: This scheme involves inflating or fabricating expense claims for personal gain.
What is bribery?
a) Offering something of value to influence a decision
b) Asking for money in exchange for a favor
c) Threatening harm to get what you want
d) Falsifying business records
Answer: a) Offering something of value to influence a decision
Rationale: Bribery occurs when a gift or payment is offered to manipulate decisions.
What is identity theft?
a) Misuse of business credentials
b) Unauthorized use of someone’s personal data for illegal benefit
c) Overcharging on credit cards
d) Theft of physical identification cards
Answer: b) Unauthorized use of someone’s personal data for illegal benefit
Rationale: Identity theft involves stealing personal information for financial or other gains.
What is credit card fraud?
a) Overcharging a cardholder
b) Unauthorized use of stolen or counterfeit credit cards
c) Issuing multiple cards to one user
d) Skimming money from card transactions
Answer: b) Unauthorized use of stolen or counterfeit credit cards
Rationale: Credit card fraud involves unauthorized transactions with stolen or fake cards.
What is C.N.P in fraud?
a) Card Not Present transactions
b) Company Network Protection
c) Cyber Network Password
d) Corporate Non-Payment fraud
Answer: a) Card Not Present transactions
Rationale: C.N.P refers to fraud in online or phone transactions where physical cards are not
required.
, What are the two broad categories of fraud?
a) Theft and deception
b) Cyber and physical fraud
c) Employee and vendor fraud
d) Skimming and billing schemes
Answer: a) Theft and deception
Rationale: Fraud generally involves either direct theft or deceitful practices.
Which is a common myth about fraud in financial services?
a) Fraud is common
b) Fraud is hard to detect
c) “We have very little fraud here”
d) Fraud cannot happen with strong cybersecurity
Answer: c) “We have very little fraud here”
Rationale: This myth underestimates the prevalence of fraud in financial systems.
What is external fraud?
a) Fraud involving employees only
b) Deceptive conduct by non-employees that deprives the organization of value
c) Fraud where no monetary loss is involved
d) Fraud involving only digital theft
Answer: b) Deceptive conduct by non-employees that deprives the organization of value
Rationale: External fraud occurs when individuals outside the organization commit fraudulent
acts for personal gain.
What is an illegal gratuity?
a) A reward given to an employee for making a favorable business decision
b) A forced payment demanded through threats
c) A bribe given to an organization
d) Unauthorized credit card charges
Answer: a) A reward given to an employee for making a favorable business decision
Rationale: Illegal gratuities involve rewarding decisions already made, unlike bribery which
influences decisions.
What is extortion in the context of fraud?
a) Falsifying business records
b) Demanding payment or favors through threats of harm
c) Submitting fraudulent reimbursement claims
d) Overbilling a client for services
AND VERIFIED ANSWERS/ACCURATE SOLUTIONS |GET IT 100%
CORRECT!! ALREADY GRADED A+
What is fraud?
a) Legal business practices
b) Acts involving trust and honesty
c) Illegal acts involving deceit, concealment, or violation of trust
d) A legal way to obtain financial gain
Answer: c) Illegal acts involving deceit, concealment, or violation of trust
Rationale: Fraud involves dishonest actions to gain financial or personal advantages.
What are the two main types of fraud?
a) Cyber fraud and social fraud
b) Employee fraud and vendor fraud
c) Internal fraud and external fraud
d) Financial fraud and embezzlement
Answer: c) Internal fraud and external fraud
Rationale: Fraud is classified based on whether it involves employees (internal) or non-
employees (external).
What is internal fraud?
a) Fraud by customers
b) Fraud involving employees against their employer
c) Fraud involving fake invoices
d) Fraud conducted by third-party vendors
Answer: b) Fraud involving employees against their employer
Rationale: Internal fraud occurs when employees exploit their position to commit fraud.
What is external fraud?
a) Fraud involving employees only
b) Deceptive conduct by non-employees for financial gain
c) Theft of company funds by management
d) Overreporting of financial statements
Answer: b) Deceptive conduct by non-employees for financial gain
Rationale: External fraud is perpetrated by individuals or organizations outside the company.
, What is embezzlement?
a) Theft of funds by non-employees
b) Misappropriation of funds placed in one’s trust
c) An accounting error
d) Overcharging customers
Answer: b) Misappropriation of funds placed in one’s trust
Rationale: Embezzlement involves theft of funds entrusted to someone, often an employee.
What type of fraud is referred to as “cooking the books”?
a) Identity fraud
b) Financial fraud
c) Embezzlement
d) Skimming
Answer: b) Financial fraud
Rationale: Financial fraud involves manipulating financial records to mislead stakeholders.
What is skimming?
a) Inflating invoices
b) Stealing cash before it enters the accounting system
c) Using counterfeit checks
d) False expense claims
Answer: b) Stealing cash before it enters the accounting system
Rationale: Skimming involves theft of cash before it is recorded.
What is a billing scheme?
a) Counterfeit credit card transactions
b) Issuing false invoices to obtain payments
c) Stealing cash directly from the register
d) Creating fake expense claims
Answer: b) Issuing false invoices to obtain payments
Rationale: Billing schemes use fake invoices to extract money fraudulently.
What is check tampering?
a) Altering company bank statements
b) Unauthorized use of company checks
c) Writing personal checks for business expenses
d) Skimming funds from customers
Answer: b) Unauthorized use of company checks
Rationale: Check tampering involves fraudulently accessing or altering company checks.
, What is an employee reimbursement scheme?
a) Stealing blank checks
b) Creating fake business expenses for reimbursement
c) Falsifying company accounts
d) Submitting counterfeit receipts for purchase returns
Answer: b) Creating fake business expenses for reimbursement
Rationale: This scheme involves inflating or fabricating expense claims for personal gain.
What is bribery?
a) Offering something of value to influence a decision
b) Asking for money in exchange for a favor
c) Threatening harm to get what you want
d) Falsifying business records
Answer: a) Offering something of value to influence a decision
Rationale: Bribery occurs when a gift or payment is offered to manipulate decisions.
What is identity theft?
a) Misuse of business credentials
b) Unauthorized use of someone’s personal data for illegal benefit
c) Overcharging on credit cards
d) Theft of physical identification cards
Answer: b) Unauthorized use of someone’s personal data for illegal benefit
Rationale: Identity theft involves stealing personal information for financial or other gains.
What is credit card fraud?
a) Overcharging a cardholder
b) Unauthorized use of stolen or counterfeit credit cards
c) Issuing multiple cards to one user
d) Skimming money from card transactions
Answer: b) Unauthorized use of stolen or counterfeit credit cards
Rationale: Credit card fraud involves unauthorized transactions with stolen or fake cards.
What is C.N.P in fraud?
a) Card Not Present transactions
b) Company Network Protection
c) Cyber Network Password
d) Corporate Non-Payment fraud
Answer: a) Card Not Present transactions
Rationale: C.N.P refers to fraud in online or phone transactions where physical cards are not
required.
, What are the two broad categories of fraud?
a) Theft and deception
b) Cyber and physical fraud
c) Employee and vendor fraud
d) Skimming and billing schemes
Answer: a) Theft and deception
Rationale: Fraud generally involves either direct theft or deceitful practices.
Which is a common myth about fraud in financial services?
a) Fraud is common
b) Fraud is hard to detect
c) “We have very little fraud here”
d) Fraud cannot happen with strong cybersecurity
Answer: c) “We have very little fraud here”
Rationale: This myth underestimates the prevalence of fraud in financial systems.
What is external fraud?
a) Fraud involving employees only
b) Deceptive conduct by non-employees that deprives the organization of value
c) Fraud where no monetary loss is involved
d) Fraud involving only digital theft
Answer: b) Deceptive conduct by non-employees that deprives the organization of value
Rationale: External fraud occurs when individuals outside the organization commit fraudulent
acts for personal gain.
What is an illegal gratuity?
a) A reward given to an employee for making a favorable business decision
b) A forced payment demanded through threats
c) A bribe given to an organization
d) Unauthorized credit card charges
Answer: a) A reward given to an employee for making a favorable business decision
Rationale: Illegal gratuities involve rewarding decisions already made, unlike bribery which
influences decisions.
What is extortion in the context of fraud?
a) Falsifying business records
b) Demanding payment or favors through threats of harm
c) Submitting fraudulent reimbursement claims
d) Overbilling a client for services
