Investigations Flashcards
(113 cards)
1
Q
What is contained on the signature card of a personal bank account?
A
To open a personal account, the account must provide a signature card, or similar document, evidencing a contract between the customer and bank.
The card contains the person’s name, address, telephone number, identification number, amount of the opening deposit (and possibly the source of the opening deposit) and security data ( e.g. mother’s maiden name)
No fingerprints
2
Q
Most cryptocurrencies rely on public blockchains that provide visibility into every transaction that takes place.
True / False
A
True
3
Q
Which of the following documents is most likely to be included with the account-opening documents for a corporation’s business account?
A
Copies of corporate resolutions of the board of directors authorizing the opening of the account
4
Q
A bank credit department generally maintains which of the following types of basic loan records?
A
The credit or loan file
5
Q
Calibrating
A
observing behavior before asking critical questions
6
Q
Electronic recording devices can distract subjects and inhibit their responses
True / False
A
True
7
Q
Which of the following is the MOST APPROPRIATE type of question for fraud examiners to ask during interviews to confirm facts that are already known?
A
Leading Questions
8
Q
In interview situations, _____________ questions consist of a series of interrelated questions and frequently require more than one answer, such as “What are your duties here, and how long have you been employed?”
A
Complex
9
Q
Closed questions are worded in a way that makes it difficult for the respondent to answer “yes” or “no.”
True / False
A
False
10
Q
To better prepare for the possibility that interview records will be subpoenaed, fraud examiners should document their notes for each interview separately, even when documenting electronic recordings.
A
True
11
Q
A(n) ______________ interview is one that has the potential to bring about strong emotional reactions in the respondent.
A
Volatile
12
Q
The proper way an interviewer should start the calibration of a witness is through the use of:
A
Noncritical questions on background information.
13
Q
Lucas, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of William, a fraud suspect. Lucas asks William, “Did you just want extra money, or did you do this because you had financial problems?” This is called a(n):
A
Alternative Question
14
Q
In interview situations, admission-seeking questions should be phrased as “Did you do it?” rather than “Why did you do it?”
A
Why did you do it?
15
Q
Which of the following is a recommended tactic for interrupting an accused’s denials during an admission-seeking interview?
Reasoning
Delays
Repeated Interruptions
All of the above.
A
All of the above
You can use all of them
Reasoning, Delays, Repeated Instructions.
16
Q
An admission-seeking Interview is specifically designed to:
A
Obtain a legal admission of wrong doing.
17
Q
Predication
A
The basis upon which a fraud examination is undertaken.
18
Q
To preserve the confidentiality of a fraud investigation by ensuring that it is afforded protection under a legal professional privilege, the investigation should be conducted at the direction of, or under the supervision of, a government official.
A
False
- Generally, to receive protection under a legal professional privilege, an investigation must be conducted at the direction of, or under the supervision of, a legal professional, not a government official.
19
Q
B. Fraud examinations should begin with general information that is known, starting at the periphery, and then move to the more specific details
A
True
20
Q
To properly prepare an organization for a formal fraud investigation, all employees should be notified of the investigation’s existence and purpose.
A
False
Generally, it is not good practice to alert all of an organization’s employees that an investigation will be taking place, nor should the investigation’s purpose be explained to all employees.
21
Q
Formal Fraud examination report includes
A
- copies of important documents
Most evidence in fraud cases will be in document form, and when reporting the results of a fraud examination, it is best to include copies (not originals) of important documents in the formal report or in the attached appendices. Also, when operating under a lawful court order that compels a custodian to furnish original documents, the fraud examiner should copy those documents (preferably in the presence of the custodian). Then the fraud examiner should furnish the custodian with a receipt describing the documents copied or taken.
22
Q
A fraud examiner is preparing the fraud examination report at the conclusion of a fraud investigation. When including information regarding the interviews conducted during the examination, the fraud examiner should:
A
Report the details of each witness interview in a separate memorandum.
23
Q
Which of the following is a recommended method for organizing and presenting information in a fraud examination report?
A
Chronologically
24
Q
Which of the following is NOT a purpose of the follow-up/recommendations section of a written fraud examination report?
A. To state necessary remedial measures for the organization to undertake
B. To identify any aspect of the investigation that remains outstanding
C. To make recommendations related to procedures and controls
D. To calculate the amount of loss caused by any misconduct identified during the investigation
A
D. To calculate the amount of loss caused by any misconduct identified during the investigation
25
When reporting the results of a fraud examination, the Certified Fraud Examiner (CFE) generally should include their opinion regarding the credibility of the witnesses.
True / False
False
The fraud examiner should be careful not to include any statement of opinion as to the integrity or veracity of any witness, even if the fraud examiner is convinced that the witness is being untruthful. Truthfulness, or lack thereof, can be demonstrated through conflicting statements by the witness or suspect.
26
Supervised machine learning
humans identify patterns for the programs to look for in data sets, and the programs flag any data that fit the patterns.
27
Un supervised machine learning
Unsupervised machine learning involves a program identifying similarities, patterns, or anomalies within a data set on its own. The program will not determine what the similarity, pattern, or anomaly means, just that it exists. Unsupervised machine learning programs are most useful in identifying patterns in large data sets that can then be turned into rules for supervised machine learning programs.
28
Predictive analysis
Predictive analytics uses historical data, along with analyses, statistics, and machine learning components, to build a mathematical model that captures important trends. This model is then used to process current data to create a quantitative prediction about future events or outcomes.
29
Link Analysis
Link analysis is a type of software used by fraud examiners to create visual representations (e.g., charts with lines showing connections) of data from multiple data sources to track the movement of money; demonstrate complex networks; and discover communications, patterns, trends, and relationships.
30
Tangible evidence is more volatile than digital evidence because tangible information is subject to claims of spoliation, whereas digital evidence is not.
True / False
FalseDigital evidence is more volatile than tangible information because digital data can be altered or destroyed more easily than tangible
31
The General Data Protection Regulation (GCPR) only applies to organizations that collect or process personal information if those organizations are based in the EU.
True / False
False
GDPR also applies to organizations that are not based in the EU if they collect or process the personal data of any person located in the EU for the purpose of:
- Offering goods or services to the person, regardless of whether payment is required
- Monitoring the person’s behavior
32
Which of the following is LEAST LIKELY to be revealed by analyzing a subject’s electronic payment records?
A. The market value of any real property owned
B. The locations of the subject’s residences and businesses
C. Assets the subject has purchased
D. Loans the subject has obtained
You would least likely know about the market value of any real property owned.
Electronic payments (or e-payments) refers to any type of noncash payment that does not involve a paper check. Electronic payment records can reveal, among other things:
Assets the subject has purchased
The locations of the subject’s assets (e.g., through the payment of real estate taxes, broker’s fees, or utility payments)
The locations of the subject’s residences and businesses (e.g., through analyzing the payments of utility bills)
Loans the subject has obtained (e.g., through analyzing loan payments)
Payments made to nonexistent employees with direct deposit
The cities and countries in which the subject conducts business (e.g., through analyzing the payments for carrier services to deliver packages)
Transfers of funds between individuals without an established business relationship
Assets ostensibly owned by family members or close associates but effectively controlled, held, or gifted by the subject
Hotel payments
The true owner of a property (e.g., through analyzing the mortgage payments and payments for homeowner's insurance)
33
When a fraud examiner prepares a memorandum reflecting the information furnished by a confidential source, how should the fraud examiner identify the source?
B. The Fraud examiner should use symbols to denote the source's identity.
34
In interview situations, an ________ is an orderly, continuous account of an event or incident given by a respondent with minimal or no prompting.
Free narrative.
35
When searching regulatory securities records for information on a publicly traded company, which of the following information is LEAST LIKELY to be found?
The complete books and records of the company.
Corporate financial statements
Identification of officers and directors
Identification of significant owners (e.g., those with more than 10% of a business’s stock)
A description of the registrant’s properties and businesses
A description of the significant provisions of the security to be offered for sale and its relationship to the registrant’s other capital securities
Identification of events of interest to investors
Identification of accountants and attorneys
A history of the business
The complete books and records of a com
36
Grigori, a fraud suspect, has confessed to Dmitri, a Certified Fraud Examiner (CFE), that he has embezzled funds. Dmitri is unsure whether Grigori had an accomplice. Which of the following is the most appropriate question concerning accomplices?
Who else knew about this besides you?
By asking who else “knew,” the interviewer is not only asking for the names of possible conspirators, they are also asking about others who might have known what was going on and failed to report it. This question should be worded as “Who else knew?” rather than “Did someone else know?”
37
Giada, a fraud examiner, is investigating a suspected embezzlement by one of XYZ Corporation's employees. As part of the investigation, she is assembling a financial profile of the suspect. Among other things, Giada wants to see if the suspect has made any significant real estate purchases since the embezzlement scheme began. Information on real estate transactions such as deeds, grants, transfers, and mortgages is usually located:
With the jurisdiction's land registry office.
38
Suppose you need to prove a suspect's illicit income circumstantially. Which of the following methods of tracing assets would yield the BEST result when the suspect is spending their illicit funds on items that would not cause an increase in net worth, such as travel and entertainment?
The expenditures method.
The expenditures method (also known as the sources and application of funds method) compares the suspect’s known expenditures and known sources of funds during a given period of time. That is, this analysis seeks to quantify the cost of the subject’s lifestyle and determine whether the subject’s reported income is sufficient to support their lifestyle. The expenditures method is best used when the subject spends illicit income on consumables (e.g., travel and entertainment) that would not cause an increase in net worth.
39
The expenditures method
Compares the suspect's known expenditures and known sources of funds during a given period of time. That is, this analysis seeks to quantify the cost of the subject's lifestyle and determine whether the subject's reported income is sufficient to support their lifestyle.
Best used to trace travel and entertainment.
40
Prior to conducting an interview, an investigator should prepare a thorough list of questions to ensure that the interview is well structured and that no predetermined lines of inquiry are forgotten.
True / False
False
Whenever possible, do not prepare a list of predetermined questions to ask the subject. The interview should flow freely. The interview might, however, want to develop a list of key points to cover during the interview.
41
Mario wants to locate Juliette, a fraud suspect. Mario calls Juliette's parents posing as an old friend and asks for Juliette's address, which they give him. This act would be considered illegal pretexting in all jurisdictions.
True / False
False
Broadly defined, pretexting is the act of impersonating someone else or making false or misleading statements to obtain, sell, or buy information about a person or organization. Under the broad definition, pretexting for nonfraudulent purposes is not always illegal, but it should be used with caution. For example, if a fraud examiner is trying to find a witness or a suspect, they might call the person’s relative and pretend to be an old friend who is requesting the individual’s phone number. This type of pretexting might be permissible. However, it is more often illegal to use pretexting to obtain certain types of information, such as financial records and phone history records.
42
Steganography
the process of hiding one piece of information within an apparently innocent file.
For example, a user can use the least significant bits of a bitmap image to hide a message. By hiding the message in the least significant bits of an image, there is almost no perceivable change in the bitmap image itself. And without directly comparing the altered image to the original, it is practically impossible to tell that the image was altered.
43
The Asset Method
Identifying assets previously acquired, identifying current liabilities, and taking the difference between the two is the process involved in the asset method, not the expenditures method.
Suppose you need to prove a suspect’s illicit income circumstantially. Which of the following methods of tracing assets would yield the best result when the suspect is using his illicit funds to accumulate wealth and acquire assets, thus causing his net worth to increase?
- allows the fraud examiner to prove income circumstantially by showing that the subject's assets for a given period exceed those that be accounted for from know or admitted sources of income.
44
A fraud examiner can request a business's bank records even if the business is not legally obligated to comply.
True
The simplest way to obtain relevant documents, such as bank records is to request them. This usually works for fraud examiners representing large organizations that are important customer to the party with the information.
45
A fraud examiner in an organized crime investigation believes a particular commercial restaurant is being used as a place of operation for the suspects. Which of the following types of records would be the LEAST LIKELY to help the fraud examiner discover who owns the building in which the restaurant operates?
A. Fire department records
B. Voter registration records
C. Health department records
D. Building permit records
Voter registration records
There are many public records often found at the local level that can help fraud examiners gather various types of information. To determine who owns a particular property, there might be direct information or leads found in the records of several agencies, including health and fire departments. Many local health or fire departments conduct routine inspections of businesses for health and safety code or fire code violations. These inspection records might contain valuable information about the business, its operations, the employees, and the owners.
If a business, or an individual, constructs a new building or makes improvements to an existing building, there should be a building permit on file with the local building authority. In addition, before most businesses can open their doors, local agencies might require that they possess certain permits. In many cases, the person applying for permits will be the owner or someone traceable to the owner.
Voter registration records are not public in all jurisdictions, but if they are available, they might contain useful information. Usually, much of the information contained in such records is withheld from the public for privacy purposes, but voter registration records might contain a person’s date of birth, mailing address, and political affiliation. However, this information is less likely than the other sources listed to identify the owner of a commercial building.
46
Mutual Legal Assistance
A process by which countries request and provide assistance in law enforcement matters.
47
The records of wire transfer identify the amount of the wire, where it was sent, and the date it was sent, but they do not identify who sent the wire.
False.
The records of a wire transfer identify who sent the wire, where it was sent, the date it was sent, and its amount.
48
When searching regulatory securities records for information on a publicly traded company, which of the following information is LEAST LIKELY to be found?
A. Major events that are of interest to investors
B. Identity of the company’s officers and directors
C. Identity of major owners of the company
D. The complete books and records of the company
The complete books and records of the company.
49
When determining a subject’s net worth for asset-tracing purposes, all assets should be valued at current market value to eliminate any question about estimates.
True / False
- All assets should be valued at their historical cost, not fair market value. Subsequent appreciation or depreciation of assets should be ignored.
- The amount of funds available to the subject from legitimate sources should be estimated or computed generously.
- The subject should be interviewed to identify all alleged sources of funds and to negate defenses that they might raise later.
50
Carlos is conducting a background investigation of a corporation and its management. Which of the following can Carlos obtain without a legal order or subpoena?
The company's business filings
51
A bank credit department generally maintains which of the following types of basic loan records?
The credit or loan file.
52
Which of the following is a category of informational interview questions?
A. Open
B. Leading
C. Closed
D. All of the Above
Informational interview questions categories are open, leading, and closed,
53
Which type of question is used to establish the respondent's credibility?
Assessment
54
Example of an alternative question.
"Did you deliberately plan this, or did it just happen?
The alternative question forces the accused to make one of two choices, both of which imply guilt.
55
In interview situations, __________ are questions that often suggest an answer opposite to the correct one.
Double-negative questions
56
Lucas, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of William, a fraud suspect. Lucas asks William, "Did you just want extra money, or did you do this because you had financial problems?" This is called a(n):
alternative question.
Two choices and both imply guilt.
57
Green, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of Brown, a fraud suspect. Brown has confessed to having committed the fraud but is denying anyone else was involved. However, Green knows this is untrue. What should Green do next?
Proceed as if he falsehood has been accepted as truth and return to it later.
58
An admission-seeking interview is specifically designed to:
Obtain a legal admission of wrongdoing
59
Martin, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of Doris, a fraud suspect. Although Martin has already interviewed several witnesses, he should not tell Doris under any circumstances that he has interviewed other individuals.
True / False
False
One technique for diffusing alibis is to discuss the testimony of witnesses
60
Some of the most effective information-seeking questions are phrased as subtle commands.
True / False
False
61
Norah, a Certified Fraud Examiner (CFE), has obtained an oral confession from Gabriel, a fraud suspect. Norah wants to probe Gabriel for additional details. Which of the following is the most appropriate question Norah should ask Gabriel to find out if there are any remaining proceeds that can be used to reduce losses?
What do you have left?
Does not introduce any doubt into the question
62
Which of the following is an objective of an admission-seeking interview?
Obtain a valid confession
To obtain a signed written statement acknowledging the facts
To distinguish innocent individuals from potentially
63
In Interview situations, ________ are questions hat often suggest an answer opposite to the correct one.
Double-negative questions
Double-negative questions are questions that have two forms of negation within a single clause.
64
Which of the following is the most appropriate example of an alternative question?
"Did you deliberately plan this, or did it just happen?"
65
If the accused becomes withdrawn after their alibis have been diffused, the interviewer’s best course of action is to remain silent until the accused makes a confession.
True / False
False
Some people in this situation might cry. If this occurs, the interviewer must be comforting.
66
Which type of question is used to establish the respondent’s credibility?
Assessment
Assessment questions seek to establish the respondent's credibility
67
In admission-seeking interviews, the transition from the accusatory process to the verbal confession should occur when the accused provides the first detailed information about the offense.
True / False
True
There are three general approaches to obtaining the verbal confession: chronologically, by transaction, or by event.
68
When making a direct accusation in an admission-seeking interview, it is usually best to use strong words such as steal, fraud, or crime to reinforce the seriousness of the crime to the suspect.
True / False
False
The admission-seeking part of an interview begins with a direct accusation. The accusation should be made in the form of a statement, not a question.
69
Lucas, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of William, a fraud suspect. Lucas asks William, "Did you just want extra money, or did you do this because you had financial problems?" This is called a(n):
Alternative Question
After the interviewer diffuses the accused’s alibis, the accused often becomes quiet and withdrawn. Some people in this situation might cry. If this occurs, the interviewer must be comforting. The interviewer should not remain silent or discourage the accused from showing emotion. Generally, such reactions indicate that the accused is considering whether to confess.
70
Which of the following is an important consideration when preparing a room for an admission-seeking interview?
Whether the room provides sufficient privacy
Whether the door is locked
Whether there are any pictures or wall hangings.
71
Grigori, a fraud suspect, has confessed to Dmitri, a Certified Fraud Examiner (CFE), that he has embezzled funds. Dmitri is unsure whether Grigori had an accomplice. Which of the following is the most appropriate question concerning accomplices?
Who else knew about this besides you?
Although most fraudsters commit their crimes without the aid of an accomplice, the interviewer should determine whether others were involved. To obtain this information, the interviewer should not ask if anyone else assisted the fraudster; instead, they should phrase the question similar to this: "Who else knew about this besides you?"
By asking who else “knew,” the interviewer is not only asking for the names of possible conspirators, they are also asking about others who might have known what was going on and failed to report it. This question should be worded as “Who else knew?” rather than “Did someone else know?”
72
Abel, a Certified Fraud Examiner (CFE), conducted an interview of Baker, the controller of the ABC Company. Abel asked the following question: "Since you were here when the controls were developed, can you tell me how they came about?" This kind of question is called a ____________________.
Controlled answer technique.
Controlled answer techniques may be used to stimulate a desired answer or impression. These techniques direct the interview toward a specific point. For example, it might be possible to get a person to admit knowledge of a matter by phrasing the question: "I understand you were present when the internal controls were developed; would you please describe how they were constructed?" This phrasing provides a stronger incentive for the respondent to admit knowledge than does: "Were you present when the internal controls were developed?" To stimulate the person to agree to talk or provide information, you might use a prompt such as the following: "Because you are not involved in this matter, I am sure you would not mind discussing it with me." This provides a stronger incentive to cooperate than "Do you have any objections to telling me what you know?" Avoid negative
73
For a signed, written confession to be admissible in court, the statement must be:
No requirements
There is no legal requirement that a statement must be completely in the handwriting or wording of the declarant.
74
A reason why a subject’s credit card records can be useful in asset tracing investigations?
Credit cards can provide leads to identifying hidden assets. They reveal a great deal or personal and business information about the account holder. AND leads to identifying hidden assets.
75
Bianca, a fraud examiner for the Levine Corporation, suspects that an employee of another company has committed a fraud scheme against Levine Corporation. The relevant jurisdiction regulates the distribution of credit information and personal data. Although Bianca has not obtained the suspect employee's consent, she will likely be allowed to access their credit report from a third party.
True / False
False
Some jurisdictions provide an exception to this rule when a party is conducting a background check for employment purposes, but since the suspect in this case is not an employee of the investigating party, the exception would not apply.
76
Even when a victim refers a fraud case for criminal prosecution, the government will usually not disclose the contents of nonpublic records with the victim during the investigation.
True / False
True
Records obtained while executing a search warrant or similar legal order usually are available only to the government during the underlying investigation, and perhaps thereafter if they are not disclosed at trial. In addition, law enforcement agencies may also subpoena records but, depending on the jurisdiction, might not disclose the contents of such records with the victim or third parties.
77
During which phase of the data analysis process does the fraud examiner identify, obtain, and verify the relevant or requested data?
Preparation phase
78
Which of the following is a common use of public records in fraud examinations?
Tracing and recovering assets.
Public records are documents that a governmental agency is required to keep by law or that are necessary to discharge the duties imposed by law.
79
Records obtained from financial institutions are perhaps the single most important financial source available to fraud examiners for purposes of tracing assets.
True / False
True
80
Which of the following is a type of information that can be obtained from the deep web?
Websites without any links pointing to them.
81
Which of the following is NOT one of the most important questions for a fraud examiner to ask before commencing a legal action to recover assets?
Is the suspect guilty of the fraudulent act they are being charged for?
As an investigator or other nonlegal professional concerned with fraud detection and recovery, a fraud examiner must often be able to evaluate the potential for recovery. It is common for fraudsters to spend most, if not all, of their ill-gotten gains, leaving little to recover. Accordingly, the following questions should be asked before commencing a legal action:
Are nonlegal recovery methods or remedies available?
Will the case be referred for criminal prosecution?
Do one or more defendants have sufficient property or money to satisfy a money judgment?
Can property be recovered from one or more defendants who are the subjects of a rescission, restitution, or forfeiture judgment?
Are pretrial attachment procedures available, and should they be invoked to protect and ensure the plaintiff’s ability to satisfy a money judgment at a later time?
Could the assets be protected against enforcement of a judgment?
82
Textual Analytics
is a method of using software to extract usable information from unstructured data.
83
Unstructured Data
Text based Data
Unstructured data, by contrast, are data that would not be found in a traditional spreadsheet or database. They are typically text based.
84
Benford Law
identifying ficticious numbers.
85
Multi-file processing
a data analysis software function that allows users to relate several files by defining relationships in collected data, without the use of the Join command.
86
Foreign Correspondent relationship
a relationship between foreign and domestic financial institutions in which one institution has the authority to provide certain financial services on another institution's behalf.
87
A bankruptcy file typically contains the bankruptcy petition or filing document.
True / False
True
88
During the analysis phase in digital forensic investigations, the fraud examiner's primary concern is to protect the collected information from seizure.
False.
89
expert report
qualification, opinions, bases of those opinions, & various other pieces of information.
90
Fraud examination report
conveys all evidence necessary to evaluate the case, and it can be used to corroborate previously known facts.
91
Predative analytics
uses historical data, along with analyses, statistics, and machine learning components, to build a mathematical model that captures important trends.
92
Robotic process automation (RPA)
technology that allows for the configuration of a business program to emulate and integrate the actions of a human to execute certain business processes.
93
A fraud examiner can request a business’s bank records even if the business is not legally obligated to comply.
True
94
Which of the following facts would best support the defense of a law enforcement officer against an allegation of entrapment?
The officer acted based on a tip from a reliable source
95
In jurisdictions that protect the processing and dissemination of credit information and personal data, businesses are not subject to the same protections that individuals have.
True / False
True
96
Alex, a fraud examiner, receives an anonymous call from someone who claims to have information regarding a fraud at Alex’s company. The whistleblower says he will only provide the information if he is given unqualified confidentiality. Alex says he cannot make that promise. Was Alex’s statement prudent under the circumstances?
Yes, because Alex may attempt to protect the whistle blower's confidentiality but cannot guarantee it.
97
Join Function
to compare the payroll records to the employee master file.
98
Why do fraud examiners perform textual analytics?
A. To uncover warning signs of potentially fraudulent employee behavior.
B. To gauge the pressures/ incentives, opportunities, and rationalizations to commit fraud.
C. To reveal patterns, sentiments, and relationships indicative of fraud.
99
Freddie calls Alex’s bank, claiming to be Alex, with the intention of stealing Alex’s identity. Freddie tells the bank representative that he needs to make sure the bank has the correct government identification number on his account because he had noticed an error on his statement. The bank representative refuses to give the number, so Freddie hangs up. Assuming that each of the following is illegal in the relevant jurisdiction, which of the following crimes did Freddie commit?
Pretexting with financial institution.
100
Bianca, a fraud examiner for the Levine Corporation, suspects that an employee of another company has committed a fraud scheme against Levine Corporation. The relevant jurisdiction regulates the distribution of credit information and personal data. Although Bianca has not obtained the suspect employee's consent, she will likely be allowed to access their credit report from a third party.
True / False
False
In the case of consumer (individual) credit records and personal data, a growing number of jurisdictions regulate both how such information is collected and stored, as well as who may access this information and for what purpose. In many cases, the consumer must be notified and must consent to the use of the report. In jurisdictions that regulate credit information and personal data, a fraud examiner will generally need a legally acceptable reason for accessing such information from third parties. However, simply suspecting an individual of fraud is generally not sufficient grounds for obtaining credit and personal data regarding the person from a reporting agency or data controller.
Some jurisdictions provide an exception to this rule when a party is conducting a background check for employment purposes, but since the suspect in this case is not an employee of the investigating party, the exception would not apply.
101
Christie is undertaking a data analysis engagement to identify potential fraud at XYZ Corporation. Which of the following lists the MOST appropriate order in which she should conduct the steps involved in the data analysis process?
I. Cleanse and normalize the data.
II. Build a profile of potential frauds.
III. Analyze the data.
IV. Obtain the data.
V. Monitor the data.
A. II, IV, I, III, V
- Build a profile of potential frauds
- Obtain the data
- Cleanse and normalize the data
- Analyze the data
- Monitor the data.
102
It is best practice for fraud examiners to conduct covert operations at the same time that they are employing conventional methods of evidence-gathering.
False
A covert operation is an investigation technique designed to obtain evidence by use of agents whose true intentions are not communicated to the target. Covert operations must be undertaken carefully.
When considering a covert operation, fraud examiners must take into account privacy laws, the potential cost of human and technological resources, any source or informant’s motivations and expectations with regard to their participation, and the potential to alert suspects to the existence of an investigation. Therefore, fraud examiners should only resort to covert operations after conventional methods of evidence-gathering have been exhausted and proven unsuccessful.
103
Information on real estate transactions such as deeds, grants, transfers, and mortgages is usually located:
With the jurisdiction's land registry office.
104
Which of the following is a valid legal defense to allegations of entrapment against a fraud examiner who is a federal law enforcement officer?
The fraud examiner acted with adequate prediction.
105
Lucas, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of William, a fraud suspect. Lucas asks William, "Did you just want extra money, or did you do this because you had financial problems?" This is called a(n):
Alternative Question.
106
Green believes that Blue, a fraud suspect, has purchased hidden personal property through suspicious financing. Which of the following sources, if available, would MOST LIKELY contain information that Green could use to locate Blue’s possible hidden assets?
Commercial Filings
Commercial filings are records that can help fraud examiners identify personal property that an individual or business has financed. These filings and supporting documents can help fraud examiners uncover hidden ownership or relationships between parties by viewing the names of all listed debtors and their addresses. The fraud examiner might find information linking individuals to the companies they own or discover information about a company’s subsidiaries, branch offices, or parent company. Additionally, discovering financed assets can reveal information about a person or organization’s financial condition.
107
Which of the following is NOT an example of a data analysis function that can be performed to detect fraud through examination of accounts payable?
A. Summarize large invoices by amount and vendor.
B. Identify debits to expense accounts outside of set default accounts.
C. Sort asset values by asset type or monetary amount.
D. Review recurring monthly expenses and compare to posted/paid invoices.
C. Sort asset values by asset type or monetary amount.
108
Steganography refers to procedures used to convert information using an algorithm (called a cipher) that makes the information unreadable.
True / False
Encryption refers to procedures
109
Which of the following is a valid legal defense to allegations of entrapment against a fraud examiner who is a federal law enforcement officer?
The fraud examiner acted with adequate prediction.
110
Lucas, a Certified Fraud Examiner (CFE), is conducting an admission-seeking interview of William, a fraud suspect. Lucas asks William, "Did you just want extra money, or did you do this because you had financial problems?" This is called a(n):
Alternative Question.
111
Simone, a manager at a major company, is suspected of financial statement fraud. During an admission-seeking interview with Simone, the investigator states, “A lot of employees count on the company doing well. I know you only did this to help the company succeed. Isn’t that right?” This technique is known as:
Altruism
112
Which of the following is NOT an example of a data analysis function that can be performed to detect fraud through examination of accounts payable?
Sort asset values by asset type of monetary amount.
113
Steganography
is the process of hiding one piece of information within an apparently innocent file.
