ACFE Updated CFE-Law Exam Questions and Answers by ishaq

According to the ACFE Fraud Examiners Manual, Law Section, particularly in the Money Laundering chapter discussing International Anti-Money Laundering Efforts and the FATF Recommendations , financial institutions are required to file suspicious transaction reports STRs when they suspect that funds are the proceeds of criminal activity or are related to money laundering or terrorist financing.

The conduct described—purchasing bearer instruments with cash in amounts just below mandatory reporting thresholds—is commonly known as structuring. Structuring is a recognized money laundering technique designed to evade currency transaction reporting requirements. Under the FATF Recommendations, financial institutions must not rely solely on monetary thresholds to trigger reporting obligations. Instead, they are required to file a suspicious transaction report whenever there is reasonable suspicion of illicit activity, regardless of the amount involved.

A cash transaction report is typically triggered by transactions exceeding a specific monetary threshold, but structuring to avoid that threshold does not eliminate the reporting obligation. If employees suspect money laundering, the bank is obligated to file a suspicious transaction report with the appropriate authorities.

Therefore, the correct answer is that the bank is required to file a report of suspicious transactions because the employees suspect money laundering violations.

The correct answer is D. The CFE Manual explains that when parties or assets are spread across multiple jurisdictions, a judgment obtained in one country is not automatically effective everywhere else. In fact, a domestic judgment against a foreign defendant may be useful for recovering assets located in the domestic country, but it might be worthless for reaching assets located in a foreign country. The Manual also states that some countries enforce foreign judgments, but others do not, and enforceability often depends on the internal laws of the enforcing jurisdiction and whether there is an enforcement treaty between the relevant countries.

This is why options A and C are incorrect. Enforceability is absolutely affected by the law of the place where enforcement is sought, and foreign judgments are not universally or automatically recognized worldwide. Option B is also too absolute because asset location can matter practically, but the Manual makes clear that enforceability does not always depend solely on where assets are located. The better statement is that a judgment secured in one jurisdiction might not be effective in another jurisdiction where the defendant resides or holds assets. That is the cross-border enforcement problem fraud examiners must understand when asset recovery is involved.

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 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.