CFE - Financial Transactions and Fraud Schemes

CFE - Financial Transactions and Fraud Schemes practice questions, page 10 of 10, with answer review and explanations.

Question 46

Blue borrowed her employer’s snowplow for her own snow removal business, which she operates on the side. Blue only used the snowplow on the weekends or after hours, when her employer was not open for business. Blue falsified the mileage and usage logs for the snowplow so that no one would know she had been using it. The snowplow was returned unharmed. Which of the following statements is MOST ACCURATE?

  1. Blue committed larceny of a noncash asset.
  2. Blue committed misuse of a noncash asset.
  3. Blue committed a fictitious sales scheme.
  4. Blue did not commit occupational fraud.

Question 47

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

  1. Companies should have vendor-monitoring procedures that are based on the red flags of the vendor schemes that pose the greatest risk.
  2. Companies should not conduct background checks on vendors until after they are added to the vendor master file.
  3. Companies should restrict the monitoring of their procurement activities to once a year to ensure comparability over time.
  4. Companies should permit the person who maintains the vendor master file to have the authority to approve invoices for payment.

Question 48

A fraudster poses as the head of one of XYZ Company’s foreign suppliers and sends an email to an XYZ employee requesting that this month’s payments be made to an alternate account that the fraudster owns. This is an example of which of the following types of fraud schemes?

  1. Electronic piggybacking
  2. Reverse social engineering
  3. Executive email attack
  4. Business email compromise

Question 49

Which of the following is NOT a way that dishonest contractors collude to circumvent the competitive bidding process?

  1. Agree to stay out of each other’s designated markets.
  2. Refrain from submitting bids on certain contracts.
  3. Use obscure publications to publish bid solicitations.
  4. Submit token bids that are not serious attempts to win the contract.

Question 50

Which of the following is NOT a justifiable reason to depart from generally accepted accounting principles (GAAP)?

  1. Departing from GAAP will make the company appear more profitable.
  2. Adherence to GAAP would produce misleading results.
  3. It is a common industry practice to give particular transactions a specific accounting treatment.
  4. The transaction at issue is considered to be immaterial.