Pass Your ACFE Exam with CFE-Fraud-Schemes-and-Financial-Crimes Exam Dumps (Updated 355 Questions) [Q68-Q92]

QUESTION 68
Which of the following would NOT be considered a conflict of interest?

Harriet owns a significant amount of stock in a company she regularly buys her employer’s office supplies from, but her employer is unaware of this fact.

Robert works for Muir’s Printing Services on weekdays and Winsted Cafe on weekends, but he does not tell either employer about the other job.

Jennifer is on the board of directors of two companies that compete in the retail market, but she does not tell either company about her role at the other.

Ernest hires his brother, John, to provide vending services to his employer’s lunch areas, but he does not disclose their relationship.

QUESTION 69
Asset misappropriation schemes were the “middle children” of the study; they were more common than fraudulent statements and more costly than corruption.

True

False

QUESTION 70
Collusion or bid-rigging between bidders is called

Bribery receipt

Bid solicitation

To withdraw low bids

Contract acceptance

QUESTION 71
Which of the following signs is MOST LIKELY to indicate that a third-party vendor or contractor is engaging in a corruption scheme?

The third party provides contact information that contains a single address and a telephone number.

The third party requests that payment be sent to a different country from where it conducts business.

The third party is consistently awarded contracts based on a reputation for providing higher quality services than its competitors.

The third party charges lower-than-average prices for the goods and services it offers to customers.

QUESTION 72
Which of the following employee behaviors could be considered a red flag of a corruption scheme?

An employee avoids asserting authority in areas where they are not responsible for decision-making.

An employee demonstrates a low success rate in markets where competitors are known for engaging in bribery.

An employee exhibits an overly friendly social relationship with a third-party contractor.

An employee has a history of submitting multiple conflict of interest forms to their Human Resources Department.

QUESTION 73
Which of the following statements regarding a nonconforming goods or services procurement fraud scheme is MOST ACCURATE?

In a nonconforming goods or services scheme, a contractor submits a low bid with the intention of increasing the prices of their goods and services after winning the contract.

In a nonconforming goods or services scheme, a contractor intentionally bills the procuring entity for labor- or material-related expenses that were not incurred.

In a nonconforming goods or services scheme, a contractor uses refurbished materials when completing a project despite the procuring entity requiring new materials.

In a nonconforming goods or services scheme, a contractor colludes with procuring entity personnel to secure a contract for unnecessary goods or services.

QUESTION 74
According to Marshall, ______ are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.

Assets

Liabilities

Credentials

None of the above

QUESTION 75
Which of the following are the classifications for Corruption?

Bribery, economic extortion, illegal gratuities, and conflicts of interest

Corruption, bribery, economic extortion, conflicts of interest

Overbilling, bribery, bid-rigging, and illegal gratuities

Economic extortion, bribery, illegal gratuities, and corruption

QUESTION 76
A scheme is classified as a Conflict of Interest:

when an employee must have some kind of ownership or employment interest in the vendor submitting the invoice.

when a salesman must have some kind of ownership or employment interest in the vendor submitting the sales.

when a purchaser must have some kind of ownership or employment interest in the vendor submitting the purchase.

when a dealer must have some kind of dealership interest in the vendor submitting the stock.

QUESTION 77
A process by which several bidders conspire to split contracts up and ensure that each gets a certain amount of work is called:

Bid opening

Fictitious bidding

Bid pooling

Bid log

QUESTION 78
A journal in which all sales made on credit or cash are listed is:

Disbursement journal

Accounts receivable journal

Accounts payable journal

General journal

QUESTION 79
Cole, a procurement officer, receives illicit payments from contractors in exchange for preferential treatment.
The illicit payments are deposited into a bank account owned by XYZ Inc., a shell company Cole created.
Cole then transfers the funds to various foreign accounts he controls. Later, Cole wires the money held in the foreign accounts to a domestic bank account owned by Cole Real Estate, a side business Cole established.
Cole then uses the funds in the real estate account to invest in commercial real estate. In which stage of money laundering did Cole engage when he invested in real estate?

Implementation

Layering

Integration

Placement

QUESTION 80
Inventory shrinkage is the unaccounted-for reduction in the company’s inventory that does not result from theft.

True

False

QUESTION 81
Which of the following statements describes a best practice for preventing contract and procurement fraud?

Companies should conduct background checks on all vendors before they are added to the vendor master file.

Companies should have vendor-monitoring procedures that address the red flags of all vendor schemes.

Companies should permit the person who maintains the vendor master file to also have authority to approve payments for invoices.

Companies should restrict the monitoring of their procurement activities to once a year to ensure comparability from year to year.

QUESTION 82
When a victim company purchases unnecessary goods or services from a supplier at the direction of the corrupt employee, this results in:

Presolicitation scheme

Need recognition scheme

False sole-source scheme

Submission scheme

QUESTION 83
Skimming cases can more likely be detected by:

Internal audits

Accidents

Internal controls

Occupational frauds

QUESTION 84
Which of the following is the MOST APPROPRIATE technique for detecting a nonconforming goods or services scheme?

Interviewing complaining contractors and unsuccessful bidders about the presence of red flags

Reviewing correspondence and contract files for indications of noncompliance regarding specifications

Comparing the direct and indirect labor account totals from the prior year to the current year

Determining if the costs of the contract have exceeded or are expected to exceed the value of the contract

The ACFE Fraud Examiners Manual addresses Nonconforming Goods or Services under Contract and Procurement Fraud . The Manual states that, to detect nonconforming schemes, the fraud examiner should examine contract specifications, contractor statements, invoices, supporting documents, the received product, and test and inspection results for discrepancies with contract specifications. It then specifically adds:
“Additionally, to detect nonconforming schemes, the fraud examiner should:
* Review correspondence and contract files for indications of noncompliance.
* Request assistance from outside technical personnel to conduct after-the-fact tests.” This language matches Option B exactly, so it is the most appropriate detection technique.
Why the other options are incorrect
A). Interviewing complaining contractors and unsuccessful bidders about the presence of red flags This is a detection technique the Manual associates with change order abuse , not nonconforming goods or services schemes.
C). Comparing the direct and indirect labor account totals from the prior year to the current year This type of comparative cost analysis is more consistent with testing for cost mischarging or other accounting irregularities, not the primary detection methods for nonconforming goods/services. The Manual’s nonconforming-scheme detection guidance focuses on specifications, inspection results, product testing, and contract/correspondence review.
D). Determining if the costs of the contract have exceeded or are expected to exceed the value of the contract That is not identified by the Manual as the most appropriate method for detecting nonconforming goods or services. Again, the Manual directs the examiner to look for noncompliance with specifications and supporting documentation.
References
* ACFE Fraud Examiners Manual, 2020 International Edition
* Contract and Procurement Fraud – Nonconforming Goods or Services
* Detecting Nonconforming Goods or Services Schemes
* Related contrast: Detecting Change Order Abuse

QUESTION 85
A fraudster is MOST LIKELY to take which of the following actions during an account takeover scheme?

Disabling multifactor authentication immediately after gaining access to an account

Placing orders for products using financial information that is stored on an account holder’s overtaken account

Trying to breach an individual’s account in one attempt to avoid activating alerts regarding fraudulent activity

Leaving the contact information for an overtaken account unchanged

QUESTION 86
Which of the following statements regarding new account fraud is MOST ACCURATE?

Fraud is more likely to occur in established accounts than in accounts that are newly opened.

Automated teller machines (ATMs) are rarely targets of new account fraud because most ATMs have cameras installed.

Mobile deposits are at high risk for new account fraud because face-to-face transactions are not required.

New account fraud can be defined as any fraud that occurs on an account within the first year that it is open.

QUESTION 87
Which of the following statements is MOST ACCURATE?

Government and public sector organizations can usually accept more fraud risk than private sector organizations because there are no shareholders.

Government and public sector organizations are required to reprioritize areas of focus for fraud detection less frequently than private sector organizations.

Government and public sector organizations might need to conduct and respond to fraud risk assessments more frequently than private sector organizations.

Government and public sector organizations have more autonomy in how they practice fraud detection than private sector organizations.

QUESTION 88
Which of the following measures will MOST LIKELY prevent cash larceny schemes from occurring?

Restricting other employees from performing the duties of an absent employee

Assigning the duties of depositing cash receipts and performing bank reconciliations to different employees

Having all employees use the same cash register for their transactions

Keeping employees unaware that the company performs surprise cash counts

QUESTION 89
Which of the following statements regarding using front businesses as a method of laundering money is MOST ACCURATE?

Money launderers are able to benefit from using front businesses to hide their illegal income because they can easily avoid paying taxes on that income.

Front businesses can often be detected because these businesses have a large number of customers during peak operating hours and high income.

Bars, restaurants, and nightclubs are commonly used as front businesses because these venues tend to charge relatively low prices and customers rarely vary in their purchases.

Front businesses are a favored method because it is difficult to match the costs associated with providing customers food, liquor, and entertainment with the revenues produced.

QUESTION 90
Employees with the authority to grant discounts in order to skim revenues may use which authority?

False discounts

Recording a discount on sale procedure

Internal discount sales audits

None of the above

QUESTION 91
In ____________ scheme, a supplier pays an employee of the purchasing company to write specifications that will require amendments at a later date.

Deliberate writing of vague specifications

Need recognition

False specification

Bid-splitting

QUESTION 92
Which of the following is the MOST APPROPRIATE technique for detecting a cost mischarging scheme?

Reviewing the inspection and testing reports of questioned goods or materials

Comparing the direct and indirect labor account totals from the prior year to the current year

Inspecting questioned goods or materials by examining packaging, appearance, and description

Examining any change orders submitted by a contractor that add new items