Certified Fraud Examiner (CFE) Free Practice Test

Question 1

Which of the following factors is NOT included in most financial statement schemes?

A. Concealed liabilities and expenses

B. Improper asset valuations

C. Fictitious revenues

D. Persuasive Evidence

Correct Answer: D

Question 2

___________ should be examined to see that all are properly documented and that inappropriate payments have not been made to employees.

A. Payable checks

B. Cash advances

C. Payable cash

D. counterfeit checks

Correct Answer: B

Question 3

Larceny is the scheme in which an employee simply takes inventory from the company premises without attempting to conceal it in the books and records.

A. False

B. True

Correct Answer: B

Question 4

The heart of book keeping system is the ___________.

A. Liability

B. Checkbook

C. Journal

D. Asset

Correct Answer: B

Question 5

Occupational fraud and abuse is a (an) __________ of doing business, in much the same way that we pay expenses for electricity, taxes and wages.

A. Equity

B. Balance sheet

C. Expense

D. Financial record

Correct Answer: C

Question 6

A journal in which all sales made on credit or cash are listed is:

A. Accounts receivable journal

B. Accounts payable journal

C. Disbursement journal

D. General journal

Correct Answer: A

Question 7

According to fraud tree, cash has three following schemes:

A. Cash larceny, cash distribution and fraudulent disbursements

B. Fraud analysis, skimming and cash misappropriations

C. Skimming, cash larceny and fraudulent disbursements

D. Cash distribution, skimming and fraud analysis

Correct Answer: C

Question 8

Which of the following is true for Red flags associated with fictitious revenues?

A. Slow growth or usual profitability, when not compared to other companies in the same industry.

B. A usual surge in purchase by a majority of units within a company, or of purchase recorded by corporate headquarters.

C. A significant volume of sales to entries whose substance and ownership is not known.

D. Usual growth in the number of days purchase in receivables

Correct Answer: C

Question 9

Fill in Blank
The _______________ cost method of pricing would carry an asset's value on the financial statements as what it would currently cost, considering inflation.

Correct Answer:

Price-level adjusted historical cost

Question 10

The principal way to detect omitted credits from books of account is through:

A. Trend analysis

B. Forced Balance

C. Expense account

D. None of all

Correct Answer: A

Question 11

__________ inventory and other assets is relatively common way for fraudsters to remove assets from the books before or after they are stolen.

A. Write-offs

B. False shipping slip

C. Altered

D. Perpetual

Correct Answer: B

Question 12

Entering a sales total lower than the amount actually paid by the customer is called:

A. Internal sales audits

B. All of the above

C. Underrings a sale

D. Recording a sale procedure

Correct Answer: C

Question 13

In Fraud scale pressure, opportunity and integrity variables all results in a list of ___ possible red flags or indicators of occupational fraud and abuse.

A. 81

B. 83

C. 84

D. 82

Correct Answer: D

Question 14

Theft of incoming checks usually occurs when ________ is (are) in charge of opening the mail and recording the receipt of payments.

A. None of the above

B. Single employee

C. Two employees

D. More then two employees

Correct Answer: B

Question 15

When employee committing the fraud removes cash from the register and also the item allegedly being returned is debited back into the inventory, this refers to:

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ACFE Certified Fraud Examiner (CFE) Free Practice Test