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NEW QUESTION # 73
According to the recommended methodology for responding to cybersecurity incidents, which of the following activities should occur during the detection and analysis step?
- A. Creating an incident response plan
- B. Limiting the damage caused by the attack
- C. Restoring control of the systems that were affected
- D. Identifying all breaches that occurred
Answer: D
NEW QUESTION # 74
Which of the following is a TRUE statement about counterfeit payment cards?
- A. The production of counterfeit payment cards is too complicated for the use of high-speed printers.
- B. The hologram on payment cards is relatively simple to reproduce.
- C. Counterfeit payment cards can be created with blank plastic cards.
- D. All of the above are true statements about counterfeit payment cards.
Answer: C
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: Blank plastic cards are a common basis for counterfeit card production. Fraudsters encode stolen magnetic stripe or chip data onto blank cards.
* Analysis of Incorrect Options:
* A - False; holograms are designed to be difficult to reproduce.
* B - False; high-speed printers and embossers make counterfeiting easier, not harder.
* D - Incorrect, since A and B are false.
* Key Concept: Counterfeit card fraud methods.
Reference: ACFE Manual, Financial Transactions - Payment Card Fraud.
NEW QUESTION # 75
When an employee processes a fictitious refund of goods, the amount of cash in the register does not balance with the register log.
- A. True
- B. False
Answer: B
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: In a false refund scheme, the fraudster enters a fictitious refund into the register system, making it appear that merchandise was returned. The register log reflects the fraudulent refund, so the cash on hand does balance with the adjusted log. Thus, the mismatch described in the question does not occur.
* Analysis of Incorrect Option:
* A. True - Incorrect because the log and cash are manipulated to match, concealing the theft.
* Key Concept: Cash register fraud (false refunds vs. false voids).
Reference: ACFE Manual, Cash Receipts - Refund and Void Schemes.
NEW QUESTION # 76
Which of the four basic measures, if properly installed and implemented may help prevent inventory fraud?
- A. Proper documentation, physical padding, independent checks and physical safeguards
- B. Proper documentation, segregation of duties, independent checks and physical safeguards
- C. prenumbered affiliations, segregation of duties, independent checks and physical safeguards
- D. Proper documentation, segregation of duties, independent checks and inventory control
Answer: B
NEW QUESTION # 77
Which of the following scenarios is an example of an economic extortion scheme?
- A. A purchasing employee and vendor agree to bill the company for services that were not provided.
- B. A vendor rewards a purchasing employee with a free trip after the employee directs business to the vendor.
- C. An employee receives a payment for directing excess business to a vendor.
- D. A government official demands money in exchange for awarding a contract to a vendor.
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: Economic extortion occurs when someone demands payment or benefit under threat of harm (explicit or implicit). A government official demanding money in exchange for awarding a contract is classic extortion.
* Analysis of Incorrect Options:
* A - This is a billing scheme (fraudulent disbursement), not extortion.
* C - This is a kickback scheme (corruption).
* D - This is an illegal gratuity scheme (reward after action).
* Key Concept: Types of corruption-extortion vs. bribery vs. gratuities.
Reference: ACFE Manual, Corruption - Economic Extortion.
NEW QUESTION # 78
Georgina works for TAK Intelligence, a competitive intelligence firm. She is tasked with gathering intelligence about ERO Corp., a competitor of one of TAK's clients. To gather the intelligence, Georgina poses as a customer and contacts ERO. She then elicits sensitive information from an ERO employee.
Georgina's approach is an example of:
- A. Baiting
- B. Scavenging
- C. Human intelligence
- D. Open-source intelligence
Answer: C
Explanation:
Comprehensive and Detailed Explanation From the ACFE Fraud Examiners Manual Why the correct answer is Human Intelligence The ACFE Fraud Examiners Manual, in the section on fraud examination tools and intelligence gathering, discusses methods of obtaining information from individuals. One of the recognized methods is Human Intelligence (HUMINT).
The Manual explains that human intelligence gathering involves:
Collecting information directly from people-often through conversation, elicitation, or interviews- sometimes while using a pretext to encourage the target to disclose information.
In this scenario:
* Georgina poses as a customer (a pretext),
* Contacts an employee of ERO Corp., and
* Elicits sensitive information directly from that individual.
This aligns perfectly with the definition of human intelligence gathering-information obtained directly from human sources, often under false pretenses.
Why the other options are incorrect
B). Scavenging - Incorrect
The Manual describes scavenging as:
Obtaining information by searching for discarded documents or materials, such as in trash or recycling bins.
Georgina is not going through discarded materials; she is speaking directly with an employee.
C). Baiting - Incorrect
Baiting typically refers to:
Enticing someone with something of value to trick them into taking an action, often involving malware- infected media or fraudulent offers.
Georgina is not offering anything or luring the employee with incentives.
D). Open-source intelligence - Incorrect
Open-source intelligence (OSINT) refers to gathering information from:
Publicly available sources such as websites, publications, databases, or social media.
Georgina is not using public sources; she is actively eliciting confidential information from a person under false pretenses.
ACFE Manual References
The concepts used in this answer derive from the Fraud Examiners Manual (2020 International Edition), including:
* Human intelligence and data collection techniques
* Scavenging as an investigative method
* Baiting schemes
* Open-source intelligence descriptions
NEW QUESTION # 79
The most common method of detection in corruption cases is:
- A. Internal controls
- B. By accident
- C. Internal audits
- D. Tips
Answer: D
NEW QUESTION # 80
Which of the following is NOT a standard of generally accepted accounting principles (GAAP)?
- A. Conservatism
- B. Cost
- C. Quality control
- D. Full disclosure
Answer: C
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:Key GAAP principles include Conservatism, Historical Cost, and Full Disclosure. Quality control is not a GAAP principle; rather, it is a concept from auditing standards related to ensuring audit quality.
* Analysis of Incorrect Options:
* A. Conservatism - GAAP principle requiring cautious reporting of uncertain outcomes.
* B. Cost - Historical cost principle is central to GAAP.
* C. Full disclosure - Requires all relevant information to be presented.
* D. Quality control - Belongs to auditing, not GAAP.
* Key Concept:GAAP principles - distinguishing accounting standards from auditing practices.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Accounting Concepts - GAAP Standards.
NEW QUESTION # 81
Which of the following scenarios describes a card skimming or shimming scheme?
- A. None of the above.
- B. While processing a payment concealed from the customer's view, a retail employee uses a small device to scan and record the customer's payment card information.
- C. After processing a customer's payment, a server returns with the receipt but keeps the payment card hoping that the customer does not notice.
- D. An imitation website is created to deceive users into providing their payment card information.
Answer: B
NEW QUESTION # 82
In Cressey's fraud triangle, its three of the legs are Opportunity, Pressure and
- A. None of the above
- B. Isolation
- C. Rationalization
- D. Violation
Answer: C
NEW QUESTION # 83
To keep the accounting equation in balance, which of the following actions will need to be taken if someone wants to conceal the fraudulent removal of a liability from the books?
- A. Creating a fictitious expense
- B. Decreasing an asset
- C. Decreasing a different liability
- D. Decreasing owners' equity
Answer: A
NEW QUESTION # 84
Which of the following would NOT be helpful in the prevention of expense reimbursement schemes?
- A. Requiring employees to explain the specific business purpose of each expense
- B. Requiring all receipts to be submitted electronically
- C. Comparing current expenses to budgeted expense amounts
- D. Comparing current expenses to historical expenditure amounts
Answer: C
Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/FundamentalsofComputerandInternetFraud2019_Extract.pdf
NEW QUESTION # 85
Organizations that had external audits actually had higher median losses and longer lasting fraud schemes than those organizations that were not audited.
- A. False
- B. True
Answer: B
NEW QUESTION # 86
If the assets are intentionally purchased by the company but simply misappropriated by the fraudster, this is referred to as:
- A. Asset receiving scheme
- B. Fraudulent purchase
- C. Falsify shipping
- D. Inventory larceny scheme
Answer: B
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:In a fraudulent purchase scheme, the company legitimately purchases assets, but the fraudster diverts or misappropriates them after acquisition. The purchase itself is real, but the use of the assets is fraudulent.
* Analysis of Incorrect Options:
* A. Inventory larceny scheme - Direct theft without purchase.
* B. Asset receiving scheme - Not a recognized fraud scheme.
* D. Falsify shipping - Involves falsifying shipment records, not post-purchase misappropriation.
* Key Concept:Fraudulent purchases - assets are bought legitimately but stolen afterward.
Reference:ACFE Fraud Examiners Manual (2020 International Edition), Inventory and Other Assets - Purchasing and Receiving Schemes.
NEW QUESTION # 87
Which of the following is a recommended method for safeguarding an organization's proprietary information?
- A. Classifying data into security access levels based on the number of years that employees have worked for the company
- B. Requiring employees to make notes and keep drafts related to confidential projects
- C. Changing locks and reprogramming door access codes every three to five years
- D. Educating employees about nondisclosure agreements when they are hired and during exit interviews
Answer: D
Explanation:
Detailed Explanation:
* Rationale for Correct Answer:One of the most effective ways to protect proprietary information is educating employees about nondisclosure agreements (NDAs) at onboarding and again during exit.
This ensures awareness of confidentiality obligations.
* Analysis of Incorrect Options:
* A. Changing locks/codes every 3-5 years - Reasonable security but insufficient for safeguarding proprietary information.
* B. Classifying data by years of service - Not a sound security practice; access should be based on role and need-to-know.
* D. Requiring notes/drafts - Increases risk of information leaks, not protection.
* Key Concept: Proprietary information protection.
Reference: ACFE Fraud Examiners Manual (2020), Corruption: Safeguarding Proprietary Information.
NEW QUESTION # 88
Bid-rigging scheme occurs when:
- A. an employee once assists a vendor in winning a contract through a single competitive bidding process.
- B. an employee does not assist a vendor in winning a contract through the competitive bidding process.
- C. an employee fraudulently assists a vendor in winning a contract through the competitive bidding process.
- D. an employee once assists a vendor in winning a contract through a single competitive bidding process.
Answer: C
NEW QUESTION # 89
Which of the following is NOT the aspect of inventory purchase?
- A. might be some fraud scheme in inventory.
- B. Increase sales in year 2 are unexpected and purchase of inventory does not keep pace with the sales.
- C. Inventory purchases purposely increase in year 1 only to be liquidated in year 2.
- D. inventory for the year 2 will be much greater than year 1.
Answer: D
NEW QUESTION # 90
Which of the following is the MOST ACCURATE statement about the different types of malware?
- A. Spyware is software that collects and reports information about a computer user without the user's knowledge or consent.
- B. A worm is a type of software that, while not definitely malicious, has a suspicious or potentially unwanted aspect to it.
- C. A Trojan horse is a software program that, while not definitely malicious, monitors and logs the keys pressed on a system's keyboard.
- D. Ransomware is a malicious self-replicating computer program that penetrates operating systems to spread malicious code to other computers.
Answer: A
Explanation:
Explanation/Reference: https://www.techtarget.com/searchsecurity/definition/spyware#:~:text=Spyware%20is%20a%20type%20of,data%20firms%20or%20external%20users
NEW QUESTION # 91
Which of the following is NOT a justifiable reason to depart from generally accepted accounting principles (GAAP)?
- A. It is likely that assets would be understated and liabilities would be overstated.
- B. The application of GAAP could produce misleading financial statements.
- C. The expected costs associated with following GAAP would exceed the expected benefits of compliance.
- D. A transaction is considered immaterial and therefore irrelevant to the accurate interpretation of financial statements.
Answer: D
NEW QUESTION # 92
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