CFE - Financial Transactions and Fraud Schemes

CFE - Financial Transactions and Fraud Schemes practice questions, page 8 of 10, with answer review and explanations.

Question 36

Which of the following is a recommended activity that organizations should engage in to protect their proprietary information from threats?

  1. Practicing data maximization to limit the information available during a data breach
  2. Enlisting a company task force to identify areas most at risk for theft by a competitor
  3. Storing devices containing sensitive data in specially constructed quiet rooms
  4. Prohibiting all nonemployees from entering the organization’s premises

Question 37

To detect health care provider fraud, a fraud examiner should be alert for which of the following red flags?

  1. Consistently low percentage of coding outliers present
  2. Unusually low profits compared to similar businesses in the same region
  3. Lack of supporting documentation for claims under review
  4. Details in supporting documentation that match the health care claim

Question 38

Natalie, a Certified Fraud Examiner (CFE), is tasked with overseeing cybersecurity protocols for her employer, including identifying potential indicators of intrusion, or unauthorized access, to the organization’s computer network. Which of the following could potentially indicate that the organization’s network has been accessed or compromised?

  1. Updates to the operating systems of computers on the network are automatically installed to patch vulnerabilities.
  2. Users are being denied access to network files they do not typically use in the normal course of business.
  3. When logging into the computer network, employees are reminded to change their log-in passwords before they expire.
  4. The network is transmitting much more data than usual to recipients outside the country in which the organization is located.

Question 39

Vertical analysis can BEST be described as:

  1. A technique for measuring the relationship between any two different financial statement amounts
  2. A technique for comparing the performance of a parent company to one of its subsidiaries
  3. A technique for analyzing the relationships among financial statement items where components are expressed as percentages of a specified base value.
  4. A technique for analyzing the percentage change in individual financial statement line items from one accounting period to the next accounting period.

Question 40

Which of the following statements is FALSE with regard to counterfeit credit and debit cards?

  1. Counterfeit credit and debit card schemes often involve collusion with merchants or a merchant’s employees.
  2. The production of counterfeit credit and debit cards is too complicated for the use of high-speed printing facilities.
  3. Credit and debit card holograms are difficult to reproduce.
  4. Counterfeiters create phone credit and debit cards through the use of what is commonly referred to as “blank plastic”.