ACFE Certified Fraud Examiner -Fraud Schemes and Financial Crimes - CFE-Fraud-Schemes-and-Financial-Crimes Exam Questions [2026]

QUESTION NO: 1
Which of the following is a common red flag of a bid tailoring scheme?

A. There are unusually narrow specifications for the type of goods being procured. B. Numerous bidders respond to the procuring entity's bid requests. C. The procuring entity's request for bid submissions provides clear bid submission information. D. The procuring entity rebids contracts because fewer than the minimum number of bids are received.

Correct Answer: A

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 2
Another way to eliminate competition in the solicitation phase of the selection process is to:

A. Solicit bid-splitting from fictitious vendors B. Solicit transactions from fictitious vendors C. None of the above D. Solicit bids from fictitious suppliers

Correct Answer: D

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 3
Which of the following reasons is an acceptable justification for departing from generally accepted accounting principles (GAAP)?

A. The expected costs of following GAAP exceed the expected benefits of compliance. B. Applying a different accounting framework would increase the organization's ability to grow internationally. C. Reporting a transaction in a way that is compliant with GAAP would be significantly more expensive. D. A departure from GAAP would make the company appear more profitable.

Correct Answer: A

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 4
Which of the following is NOT a standard of generally accepted accounting principles (GAAP)?

A. Full disclosure B. Cost C. Quality control D. Conservatism

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 5
Which of the following is a red flag that might indicate the existence of a need recognition scheme?

A. The purchasing entity has an unusually large list of backup suppliers available. B. The purchasing entity's materials are not being ordered at the optimal reorder point. C. The purchasing entity does not have high requirements for stock and inventory levels. D. The purchasing entity identifies a need that can be met by various suppliers.

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 6
In which phase of the competitive bidding process do fraudsters attempt to influence the selection of a contractor by restricting the pool of competitors from whom bids are sought?

A. False specification B. Submission C. Solicitation D. Need recognition

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 7
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?

A. Availability of data B. Confidentiality of data C. Penetrability of data D. Integrity of data

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 8
__________ means that traditional bribery statutes proscribe only payments made to influence the decisions of government agents or employees.

Correct Answer:

Commercial bribery
* Rationale for Correct Answer: Traditional bribery laws historically applied only to government officials . When bribery occurs in the private sector (commercial setting), it is known as commercial bribery . Modern laws and internal company codes address this as well.
* Key Concept: Commercial bribery vs. government bribery.
Reference: ACFE Fraud Examiners Manual (2020 International Edition) , Corruption - Commercial Bribery .

QUESTION NO: 9
Horizontal analysis can BEST be described as:

A. A technique for measuring the relationship between any two different financial statement amounts. B. A technique for analyzing the relationships among items on the financial statement where components are expressed as percentages of a specified base value. C. A technique for analyzing the percentage change in individual line items on a financial statement from one accounting period to the next accounting period. D. A technique for comparing the performance of different companies in the same industry for an extended period.

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 10
Which of the following measures would be MOST EFFECTIVE in helping a financial institution prevent new account fraud?

A. Require that the customer's employer submit a letter of recommendation to the financial institution. B. Send a communication to all of the customer's previous residences to verify that they lived at those locations. C. Contact third-party credit reporting agencies and customer identification services to verify the customer' s identity. D. Question when customers use small cash deposits to open an account with the financial institution.

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 11
Larceny by fraud or deception means that:

A. Fails to correct a false impression B. Fails to disclose a known lien, adverse claim, or other legal impediment C. All of the above D. Creates or reinforces a false impression

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 12
Henrietta works at XYZ Corporation, managing one of several large facilities. Henrietta conspires with a local contractor who offers highly specialized pest control services for an invasive species of beetle. Henrietta creates false reports of beetle sightings at her facility and presents them to XYZ management, convincing them to procure the services of the local contractor. In exchange for the business, Henrietta receives a sum of money from the contractor. Henrietta is MOST LIKELY engaging in which of the following procurement fraud schemes?

A. Bid tailoring B. Bid manipulation C. Nonconforming services D. Need recognition

Correct Answer: D

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 13
Not having any accounts receivable that are overdue is a common red flag of fictitious revenue schemes.

A. True B. False

Correct Answer: A

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 14
Which of the following actions would constitute intellectual property theft?

A. A corporate agent submits false invoices to an accounts payable employee at a competing organization to obtain payment for services that were not rendered. B. A corporate agent accesses a competitor's computer network and obtains files that discuss the competitor's future pricing strategy. C. A corporate agent encourages a friend who works in research and development at a competing organization to apply for a position at the agent's company. D. A corporate agent reviews open-source information about a competitor to gather data on its financial performance during the previous year.

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 15
Which of the following situations describes a red flag that might be indicative of loan fraud?

A. A loan file contains missing documents that are later found in another file. B. The number of change orders for a small project continues to increase. C. A change order is submitted at the same time as a draw request. D. There is low turnover in a real estate developer's personnel.

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).