CFE - Financial Transactions and Fraud Schemes

CFE - Financial Transactions and Fraud Schemes practice questions, page 6 of 10, with answer review and explanations.

Question 26

Which of the following is a red flag that might indicate that someone is attempting to commit insurance fraud?

  1. A fire loss claim includes numerous personal items and family heirlooms.
  2. The insured made one other insurance claim within the past five years.
  3. A claim is made a short time after a change in policy coverage.
  4. A theft claim includes recently purchased items with their receipts.

Question 27

Which of the following is the MOST ACCURATE statement about the phases of procurements involving open and free competition?

  1. In the post-award and administration phase, the procuring entity identifies its needs and develops the criteria used to award the contract.
  2. In the solicitation phase, prospective contractors prepare and submit their bids.
  3. In the bid evaluation and award phase, the procuring entity fulfills its duties through the performance of its contractual obligations.
  4. In the presolicitation phase, the procuring entity issues the solicitation document.

Question 28

Which of the following situations MOST LIKELY constitutes health care fraud committed by an insurance company?

  1. Negotiating discounts with medical providers and then failing to apply those discounts toward consumers’ medical bills
  2. Failing to pay a claim because the claim is missing required information
  3. Instituting procedures to detect fraudulent claims when acting as an intermediary for a government health care program
  4. Submitting cost data to health care regulators to justify rate increases

Question 29

Which of the following statements is TRUE regarding electronic payment tampering?

  1. Electronic payment tampering schemes leave a clear audit trail.
  2. Companies should use separate bank accounts for paper and electronic transactions.
  3. Positive pay is not available on ACH transactions.
  4. The individual who makes electronic payments on the company’s behalf should also set up ACH filters to ensure only designated individuals get paid.

Question 30

All of the following methods are useful in the detection of cash larceny schemes EXCEPT:

  1. Reconciling cash register totals to the amount of cash in the drawer
  2. Performing surprise cash counts
  3. Having the accounts receivable clerk prepare the bank deposit
  4. Analyzing journal entries made to cash accounts