CFE-Law Certified Fraud Examiner (CFE) - Law Questions and Answers

This question tests your knowledge of Domain 5.

In the context of Money Laundering, specifically relating to money laundering, anti-money laundering, FATF, the question asks about FATF.

The correct answer is A: Use a risk-based approach when creating and establishing their anti-money laundering policies..

This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.

This question tests your knowledge of Domain 7.

In the context of Individual Rights During Examinations, specifically relating to employee, the question asks about the core concepts in this area.

The correct answer is C: A witness testifies that they saw the employee take the money..

This question relates to individual rights during examinations. The correct answer accurately describes the legal protections, obligations, or privacy considerations that apply in workplace investigations. Fraud examiners must balance investigative needs with legal protections for individuals.

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 8.

In the context of Criminal Prosecutions, specifically relating to deferred prosecution, the question asks about NOT.

The correct answer is A: To postpone prosecution until a company conducts an extensive internal investigation.

This question addresses criminal prosecution concepts. The correct answer correctly identifies aspects of criminal proceedings, burdens of proof, or sentencing options. Understanding the criminal justice process is essential for fraud examiners working with law enforcement.

This question tests your knowledge of Domain 11.

In the context of Testifying, specifically relating to expert witness, testimony, the question asks about the core concepts in this area.

The correct answer is C: To give an opinion when the fact finder needs specialized knowledge.

This question relates to expert witness testimony. The correct answer accurately describes the role, qualifications, or techniques for effective expert testimony. Fraud examiners often serve as expert witnesses and must understand these principles. 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.

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to criminal, civil, the question asks about MOST ACCURATE, civil trials in civil law jurisdictions is MOST ACCURATE.

The correct answer is A: The standard of proof in civil trials is often described as the inner conviction of the judge..

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.

This question tests your knowledge of Domain 7.

In the context of Individual Rights During Examinations, specifically relating to employee, privacy, surveillance, workplace, the question asks about MOST LIKELY.

The correct answer is A: A backpack brought from home.

This question relates to individual rights during examinations. The correct answer accurately describes the legal protections, obligations, or privacy considerations that apply in workplace investigations. Fraud examiners must balance investigative needs with legal protections for individuals.

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 TRUE.

The correct answer is D: The purpose of authentication is to ensure that hearsay is not admitted into evidence.

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.

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 MOST ACCURATE, the selection of expert witnesses during trial is MOST ACCURATE.

The correct answer is B: Generally, the parties select the expert witnesses in both inquisitorial and adversarial 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.

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 answer is not provided in the original document. Based on analysis of the question and options:

A: Generally, the court appoints the primary expert witnesses in inquisitorial jurisdictions. B: Generally, only the parties may select expert witnesses in inquisitional jurisdictions. C: Generally the court selects the primary expert witnesses in adversarial jurisdictions. D: Generally, only the parties may select experts to introduce testimony in adversarial jurisdictions

Based on CFE Law principles, the most likely correct answer would be A.

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.

This question tests your knowledge of Domain 2.

In the context of The Law Related to Fraud, specifically relating to misrepresentation, the question asks about NOT.

The correct answer is B: The defendant acted negligently.

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.

This question tests your knowledge of Uncategorized.

the question asks about NOT.

The correct answer is B: Profits derived solely from the investor's management activity.

This question tests your understanding of key fraud examination concepts and legal principles.

This question tests your knowledge of Domain 4.

In the context of Securities Fraud, specifically relating to securities, unsuitable recommendations, the question asks about MOST ACCURATE, rules prohibiting securities broker-dealers from making unsuitable recommendations on investments or investment strategies.

The correct answer is D: A suitability violation occurs when a broker enters into transactions and manages a client's account for the purpose of generating excessive commissions.

This question tests knowledge of securities fraud and regulation. The correct answer accurately describes the role of regulatory bodies, securities laws, or fraud schemes in this context. Securities fraud is a specialized area requiring knowledge of specific regulations and oversight mechanisms.

This question tests your knowledge of Domain 5.

In the context of Money Laundering, specifically relating to FATF, the question asks about large cash transactions with customers as provided by the Financial Action Task Force (FATF) Recommendations, which of the following transactions would require a report to be filed with the government, FATF.

The correct answer is C: A single cash purchase of casino credits for a sum that is above the jurisdiction's designated threshold..

This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.

This question tests your knowledge of Uncategorized.

the question asks about US, FCPA.

The correct answer is C: A private U S company transfers $45,000 to a foreign official to influence the award of a public construction contract..

This question tests your understanding of key fraud examination concepts and legal principles.

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 the core concepts in this area.

The correct answer is B: False.

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.

This question tests your knowledge of Domain 10.

In the context of Basic Principles of Evidence, specifically relating to privilege, the question asks about CFE.

The correct answer is B: Lose the case if a trier of fact concludes that he restrained Janessa without consent or legal justification.

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 10.

In the context of Basic Principles of Evidence, specifically relating to privilege, the question asks about the core concepts in this area.

The correct answer is C: Fidelity insurance.

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 1.

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

The correct answer is A: The government relied on the false statement.

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.

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to civil, the question asks about BEST.

The correct answer is B: Carnages.

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.

This question tests your knowledge of Uncategorized.

the question asks about the core concepts in this area.

The correct answer is A: Counterclaim.

This question tests your understanding of key fraud examination concepts and legal principles.

This question tests your knowledge of Domain 7.

In the context of Individual Rights During Examinations, specifically relating to employee, the question asks about the core concepts in this area.

The correct answer is D: Existence of an employment contract.

This question relates to individual rights during examinations. The correct answer accurately describes the legal protections, obligations, or privacy considerations that apply in workplace investigations. Fraud examiners must balance investigative needs with legal protections for individuals.

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to adversarial, the question asks about the core concepts in this area.

The correct answer is D: Is influenced by bias or self-interest.

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. In adversarial systems, opposing parties present their cases before a neutral judge or jury, while in inquisitorial systems, judges take a more active role in investigating 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 B: 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 1.

In the context of Overview of the Legal System, specifically relating to civil, the question asks about BEST.

The correct answer is B: When litigation has started.

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.

This question tests your knowledge of Domain 4.

In the context of Securities Fraud, specifically relating to securities, SRO, the question asks about MOST ACCURATE, serf-regulatory organizations (SROs) in the securities industry.

The correct answer is D: In some jurisdictions SROs establish the standards and rules under which members of the securities industry operate.

This question tests knowledge of securities fraud and regulation. The correct answer accurately describes the role of regulatory bodies, securities laws, or fraud schemes in this context. Securities fraud is a specialized area requiring knowledge of specific regulations and oversight mechanisms. Self-regulatory organizations (SROs) play an important role in the securities industry by establishing standards and rules for their members, but they typically operate under the oversight of government regulators rather than having sole authority.

This question tests your knowledge of Domain 3.

In the context of Bankruptcy Fraud, specifically relating to bankruptcy, administrator, the question asks about MOST ACCURATE, Slater's role as bankruptcy administrator is MOST ACCURATE.

The correct answer is C: Slater may collect, preserve, and dispose of the debtor's property..

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 4.

In the context of Securities Fraud, specifically relating to securities, IOSCO, self-regulatory, the question asks about TRUE, IOSCO, the International Organization of Securities Commissions (IOSCO) s TRUE.

The correct answer is D: IOSCO is recognized as the international standard-setter for securities markets.

This question tests knowledge of securities fraud and regulation. The correct answer accurately describes the role of regulatory bodies, securities laws, or fraud schemes in this context. Securities fraud is a specialized area requiring knowledge of specific regulations and oversight mechanisms.

This question tests your knowledge of Domain 1.

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

The correct answer is B: The victim's distress occurred for at least two years..

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.

This question tests your knowledge of Domain 10.

In the context of Basic Principles of Evidence, specifically relating to chain of custody, the question asks about MAIN PURPOSE.

The correct answer is A: Establish that the evidence has not been altered or changed from the time it was collected through its production in court.

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 4.

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

The correct answer is A: True.

This question tests knowledge of securities fraud and regulation. The correct answer accurately describes the role of regulatory bodies, securities laws, or fraud schemes in this context. Securities fraud is a specialized area requiring knowledge of specific regulations and oversight mechanisms.

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to criminal, civil, common law, the question asks about MOST ACCURATE, civil trials in common law jurisdictions is MOST ACCURATE.

The correct answer is C: Jury verdicts m civil trials must always be unanimous.

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.

This question tests your knowledge of Domain 10.

In the context of Basic Principles of Evidence, specifically relating to privilege, the question asks about MOST ACCURATE.

The correct answer is B: Bob might have waived the privilege because he transmitted the protected information to a third party who has no need to know the information.

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 5.

In the context of Money Laundering, specifically relating to FATF, the question asks about FATF, cross-border transfers of currency Trevor is traveling from Country A to Country B while carrying $16,000 in cash which exceeds Country B's reporting threshold Trevor is required to disclose the amount of currency he is carrying to authorities in Country B.

The correct answer is A: True.

This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.

This question tests your knowledge of Domain 9.

In the context of Civil Actions, specifically relating to trial, the question asks about the core concepts in this area.

The correct answer is A: Myopic vision.

This question focuses on civil action processes. The correct answer accurately describes civil litigation procedures, evidence preservation, or remedies available to fraud victims. Civil recovery is often an important component of fraud resolution. 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.

This question tests your knowledge of Domain 8.

In the context of Criminal Prosecutions, specifically relating to deferred prosecution, the question asks about the core concepts in this area.

The correct answer is A: To help reduce the risk of future illegal practices by an organization accused of misconduct..

This question addresses criminal prosecution concepts. The correct answer correctly identifies aspects of criminal proceedings, burdens of proof, or sentencing options. Understanding the criminal justice process is essential for fraud examiners working with law enforcement.

This question tests your knowledge of Domain 5.

In the context of Money Laundering, specifically relating to FATF, the question asks about CDD, FATF.

The correct answer is B: False.

This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.

This question tests your knowledge of Uncategorized.

the question asks about the core concepts in this area.

The correct answer is A: True.

This question tests your understanding of key fraud examination concepts and legal principles.

This question tests your knowledge of Domain 1.

In the context of Overview of the Legal System, specifically relating to criminal, common law, the question asks about MOST ACCURATE, fact finders in criminal trials in common law jurisdictions is MOST ACCURATE.

The correct answer is C: A judge is typically responsible for factual findings.

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.

This question tests your knowledge of Domain 11.

In the context of Testifying, specifically relating to expert witness, testimony, the question asks about examinations of expert witnesses in most inquisitorial jurisdictions is accurate.

The correct answer is B: Both the parties and the judge may question an expert's credibility..

This question relates to expert witness testimony. The correct answer accurately describes the role, qualifications, or techniques for effective expert testimony. Fraud examiners often serve as expert witnesses and must understand these principles. In adversarial systems, opposing parties present their cases before a neutral judge or jury, while in inquisitorial systems, judges take a more active role in investigating cases. 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.

This question tests your knowledge of Uncategorized.

the question asks about the core concepts in this area.

The correct answer is C: Prejudgment attachment.

This question tests your understanding of key fraud examination concepts and legal principles.

This question tests your knowledge of Domain 6.

In the context of Tax Fraud, specifically relating to tax avoidance, the question asks about the core concepts in this area.

The correct answer is B: False.

This question focuses on tax fraud concepts. The correct answer distinguishes between legal tax avoidance and illegal tax evasion, or identifies specific tax evasion schemes. Tax fraud investigations require specialized knowledge of tax laws and common evasion techniques.

This question tests your knowledge of Uncategorized.

the question asks about the core concepts in this area.

The correct answer is A: Overstate revenues.

This question tests your understanding of key fraud examination concepts and legal principles.

This question tests your knowledge of Domain 2.

In the context of The Law Related to Fraud, specifically relating to misrepresentation, the question asks about the core concepts in this area.

The correct answer is A: "Would a reasonable investor want to know the information to make an informed decision?".

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.