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Exam Code CFE-Fraud-Schemes-and-Financial-Crimes
Exam Name Certified Fraud Examiner - Fraud Schemes and Financial Crimes Exam
Vendor ACFE
Total Questions 352
Last Updated 26-Oct, 2026
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Free CFE-Fraud-Schemes-and-Financial-Crimes Practice Questions

Explore 5 free practice questions for the ACFE CFE-Fraud-Schemes-and-Financial-Crimes exam and review the answers and explanations to support your preparation.

  1. Question 1

    Single answer

    Physical assets including _________ and ________ are the most commonly misappropriated noncash assets in our study.

    • Option A:

      Interest & Collusion


      Correct
    • Option B:

      Inventory & Equipment


      Correct
    • Option C:

      Inventory & Purchase


      Correct
    • Option D:

      Sales & Equipment

      Correct
    Show Answer & Explanation Hide Answer & Explanation

    Correct Answer: B

    Explanation

    Detailed Explanation:

      Rationale for Correct Answer: Studies by the ACFE consistently show that inventory and equipment are the most commonly misappropriated noncash assets. They are highly liquid, valuable, and often difficult to monitor without strong controls.

      Analysis of Incorrect Options:

        A. Interest & Collusion – Not physical assets.

        C. Inventory & Purchase – Purchase is a process, not a physical asset.

        D. Sales & Equipment – Sales are transactions, not assets.

      Key Concept: Noncash asset misappropriation — inventory and equipment are the primary targets.

    [Reference:ACFEFraud Examiners Manual (2020 International Edition), Inventory and Other Assets —Common Targets of Misappropriation., , ]
  2. Question 2

    Single answer

    What type of fraud scheme would MOST LIKELY be revealed by identifying employees with the same government identification numbers?

    • Option A:

      A ghost employee scheme


      Correct
    • Option B:

      A payment tampering scheme


      Correct
    • Option C:

      A falsified hours and salary scheme


      Correct
    • Option D:

      A fraudulent commissions scheme

      Correct
    Show Answer & Explanation Hide Answer & Explanation

    Correct Answer: A

    Explanation

    The correct answer is A. A ghost employee scheme involves adding a fictitious or nonworking person to the payroll so the fraudster can collect wages or salary payments. Data analysis can help detect ghost employees by identifying duplicate, invalid, or suspicious employee information. Multiple employees using the same government or tax identification number is a strong red flag because legitimate employees should generally have unique identifying numbers. Payment tampering involves altering payments after they are initiated, while falsified hours and salary schemes usually involve overstated time worked or unauthorized pay-rate changes for real employees. Fraudulent commission schemes involve manipulating sales or commission records. The ACFE materials specifically identify duplicate government identification numbers as a test for ghost employee schemes.

    ================

  3. Question 3

    Single answer

    Which of the following is NOT a method for stealing inventory and other assets?

    • Option A:

      Larceny schemes


      Correct
    • Option B:

      Asset requisition and transfer


      Correct
    • Option C:

      Purchasing and receiving schemes


      Correct
    • Option D:

      Sales & Equipment handling

      Correct
    Show Answer & Explanation Hide Answer & Explanation

    Correct Answer: D

    Explanation

    Detailed Explanation:

      Rationale for Correct Answer: Recognized schemes for stealing inventory include:

      Larceny schemes (direct theft)

      Asset requisition and transfer schemes (false requisitions to divert assets)

      Purchasing and receiving schemes (over-ordering or falsifying deliveries).

    “ Sales & Equipment handling ” is not a defined fraud scheme, making D correct.

      Analysis of Incorrect Options:

        A. Larceny schemes – Valid theft method.

        B. Asset requisition and transfer – Document manipulation method.

        C. Purchasing and receiving schemes – Valid misappropriation scheme.

      Key Concept: Inventory theft schemes under the Fraud Tree.

    [Reference:ACFEFraud Examiners Manual (2020 International Edition), Inventory and Other Assets —Theft Schemes., , , ]
  4. Question 4

    Single answer

    Which of the following measures would be MOST EFFECTIVE in helping a company detect electronic payment tampering fraud?

    • Option A:

      Ask all vendors if they have received any duplicate payments.


      Correct
    • Option B:

      Investigate customer complaints about any payments that were applied to their account later than they expected.


      Correct
    • Option C:

      Review any non-payroll payments made to employees.


      Correct
    • Option D:

      Complete bank reconciliations once a quarter to catch any anomalies in payment amounts and payees.

      Correct
    Show Answer & Explanation Hide Answer & Explanation

    Correct Answer: C

    Explanation

    The correct answer is C. Electronic payment tampering occurs when an employee improperly alters or creates electronic payments, such as ACH payments, wire transfers, or online banking payments. Reviewing non-payroll payments made to employees is highly effective because employees generally should not receive vendor-style electronic disbursements outside normal payroll or approved reimbursement channels. Such payments can indicate that an employee inserted their own bank account, created an unauthorized payee, or diverted electronic funds. Vendor duplicate confirmations are more relevant to duplicate-payment issues. Customer complaints about late account postings relate more to cash receipts or accounts receivable. Quarterly reconciliations are too infrequent for timely detection. The ACFE materials identify electronic payment tampering as a fraudulent disbursement risk requiring strong monitoring and bank controls.

    ================

  5. Question 5

    Single answer

    Which of the following is NOT one of the information security goals that should be achieved to secure an e-commerce system for users and account holders?

    • Option A:

      Confidentiality of data


      Correct
    • Option B:

      Availability of data


      Correct
    • Option C:

      Penetrability of data


      Correct
    • Option D:

      Integrity of data

      Correct
    Show Answer & Explanation Hide Answer & Explanation

    Correct Answer: C

    Explanation

    The ACFE Fraud Examiners Manual (2020 International Edition) , under the section on Information Security in Electronic Commerce Systems , describes the three primary security goals that must be achieved to protect users and account holders:

      Confidentiality

      Integrity

      Availability

    These three goals form the cornerstone of information system protection and are often referred to as the CIA triad .

    1. Confidentiality

    Confidentiality ensures that sensitive information is accessible only to authorized individuals. The Manual highlights that e-commerce systems must protect customers’ personal and financial data from unauthorized access.

    2. Integrity

    Integrity requires that the information in the system is accurate and has not been improperly altered. This prevents fraudulent manipulation of records, transactions, and account balances.

    3. Availability

    Availability ensures that systems and data are accessible to authorized users when needed. This includes preventing disruptions caused by system failures, denial-of-service attacks, or internal sabotage.

    These three goals are explicitly documented in the ACFE Manual as essential security requirements for safeguarding electronic financial systems.

    Why Option C is the Correct Answer

    “Penetrability of data” is NOT an information security goal.

    In fact, it is the opposite of what an information security framework seeks to achieve. No section of the ACFE Manual identifies "penetrability" as a required or legitimate objective. Instead, systems should be resistant to penetration attempts.

    Thus, Option C does not belong to the CIA model or any ACFE-described security framework.

    ACFE Manual Reference

    These concepts are covered in the Financial Transactions and Fraud Schemes section discussing information security objectives for e-commerce environments, which identifies confidentiality, integrity, and availability as the foundational goals of secure systems.