ACFE Updated CFE-Financial-Transactions-and-Fraud-Schemes Exam Questions and Answers by marlow

Detailed Explanation:

Rationale for Correct Answer:Skimming is defined as the theft of cash before it is recorded in the books. Because the stolen funds are never entered into the accounting system, this is often referred to as an “off-book” fraud. It is distinct from cash larceny, which occurs after cash has been recorded.

Analysis of Incorrect Options:

B. The addition of cash – Incorrect; skimming involves removal, not addition.

C. Removal after entry – This describes cash larceny, not skimming.

D. None of above – Incorrect since option A is correct.

Key Concept:Skimming schemes — off-book cash theft.

Detailed Explanation:

Rationale for Correct Answer:Bid-rigging occurs when an employee or official manipulates the competitive bidding process to ensure a specific vendor wins the contract. This may involve sharing confidential information, suppressing competition, or tailoring bid specifications.

Analysis of Incorrect Options:

B. Does not assist – Opposite of fraud; no scheme.

C/D. Once assists… – Bid-rigging is systemic, not limited to one occurrence.

Key Concept:Bid-rigging schemes — corruption in procurement processes.

Detailed Explanation:

Rationale for Correct Answer:The ACFE describes occupational fraud and abuse as an expense of doing business because organizations inevitably face losses from it, just as they incur other operating costs. This framing emphasizes the importance of prevention and detection to minimize this “expense.”

Analysis of Incorrect Options:

A. Equity – Residual ownership interest, not relevant here.

B. Balance sheet – A report, not a cost.

D. Financial record – Too vague.

Key Concept:Occupational Fraud as a Cost of Business.

Detailed Explanation:

Rationale for Correct Answer: This scheme is a business email compromise (BEC), also known as CEO fraud. Fraudsters impersonate high-ranking executives to trick employees into transferring money or disclosing confidential information.

Analysis of Incorrect Options:

A. Reverse social engineering – Involves the fraudster posing as a helper and then exploiting the victim, not impersonating executives.

B. Executive email attack – A generic term, but the ACFE recognizes BEC as the precise classification.

C. Electronic piggybacking – Refers to unauthorized access through another user’s session, not impersonation.

Key Concept: Social engineering and cyber-enabled fraud – BEC schemes.