Free Practice Questions for ACFE CFE-Fraud-Investigations-and-Legal-Issues Exam

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to adversarial, inquisitorial, the question asks about the appointment of expert witnesses at that is accurate.

The correct answer is A: Generally, the court appoints the primary expert witnesses in inquisitorial jurisdictions..

This question relates to the legal system framework. Understanding the distinction between different legal systems and processes is crucial for fraud examiners. The correct answer accurately describes the relationship between different legal entities and their jurisdictions. Expert witnesses provide specialized knowledge to help the fact finder understand complex issues. Their testimony must be relevant, reliable, and based on sufficient facts or data. In inquisitorial jurisdictions, the court typically appoints expert witnesses who are considered neutral and objective, while in adversarial systems, the parties generally select their own expert witnesses to support their respective positions.

Search-warrant requirements generally apply to government authorities, not private parties acting independently. The Fraud Examiners Manual explains that search warrants grant government authorities the right to search premises or property for evidence. It also states that investigations by private parties may be conducted without special authority when the examiner acts prudently, lawfully, and in good faith. Because Beau is a private-company investigator and is not acting as a government agent, he generally does not need a search warrant to search company property such as an employee workstation, subject to privacy laws and company policy. Option D is especially risky because involving law enforcement could convert the search into government action. Option C is not required.

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to common law, the question asks about NOT.

The correct answer is B: The victim was an employee of the defendant.

This question relates to the legal system framework. Understanding the distinction between different legal systems and processes is crucial for fraud examiners. The correct answer accurately describes the relationship between different legal entities and their jurisdictions.

Oral consent is generally not sufficient to obtain a suspect’s bank records. The CFE Prep - Investigations states:

“Accessing a subject’s bank records from financial institutions generally requires written consent. Oral consent is the least effective way to obtain permission”.

The Fraud Examiners Manual also notes that bank information can usually only be obtained with subpoena, search warrant, or written consent.

This question tests your knowledge of Domain 3.

In the context of Bankruptcy Fraud, specifically relating to bankruptcy, the question asks about the core concepts in this area.

The correct answer is B: Exclusive control of the proceeding is entrusted to an independent insolvency representative..

This question focuses on bankruptcy fraud concepts. The correct answer correctly identifies the relevant bankruptcy process, filing type, or fraud scheme. Understanding bankruptcy proceedings and the roles of various parties is essential for fraud examiners investigating these cases.

This question tests your knowledge of Domain 10.

In the context of Basic Principles of Evidence, specifically relating to privilege, the question asks about NOT.

The correct answer is D: A lawsuit has been filed.

This question tests knowledge of evidence principles. The correct answer correctly distinguishes between types of evidence, admissibility requirements, or evidentiary privileges. Proper handling of evidence is crucial for successful fraud investigations and prosecutions.

This question tests your knowledge of Domain 2.

In the context of The Law Related to Fraud, specifically relating to bribery, the question asks about OECD.

The correct answer is B: Laws and regulations related to public subsidies licenses, and contract procurement.

This question addresses fraud-related laws. The correct answer identifies the proper legal concept or violation that applies in the described scenario. Fraud examiners must understand these legal principles to properly identify and address fraudulent activities.

According to the ACFE Fraud Examiners Manual, Law Section, particularly under The Criminal Justice System and Punishment , criminal forfeiture is a penalty imposed upon conviction that requires a defendant to surrender property derived from or used in the commission of a crime. Criminal forfeiture is in personam, meaning it is directed against the convicted defendant as part of the sentencing process. The objective is to deprive offenders of the proceeds and instrumentalities of their criminal conduct.

In option B, the defendant is ordered to transfer a vehicle she received as a bribe to the government. Because the vehicle constitutes proceeds or benefits obtained through criminal activity, requiring its transfer to the government is a classic example of criminal forfeiture.

By contrast, incarceration is a custodial sentence, a fine is a monetary penalty paid to the government, and restitution requires repayment to a victim. While restitution and fines are financial sanctions, they do not specifically involve forfeiture of property tied to the criminal offense.

Therefore, the scenario that best represents criminal forfeiture is the transfer of the vehicle received as a bribe to the government.

Pretexting is defined as impersonating someone else or making false/misleading statements to obtain information. Many jurisdictions specifically prohibit pretexting against financial institutions, which includes pretending to be a customer to access their bank account information.

Both the Manual and CFE Prep guides emphasize that forensic imaging is essential because:

“Forensic analysis should not be performed on suspect devices directly because doing so can alter or damage digital evidence, and imaging… allows a fraud examiner to view and analyse… without altering the original data in any way”.

A forensic image is an exact, sector-by-sector copy of the drive. Thus, imaging preserves evidence integrity.