ACFE Real Dumps Practice Exam Questions by Dumpswarp

Certified Fraud Examiner (CFE) - Law Questions and Answers

Question 1

__________ insurance is a type of insurance under which an insured entity is covered against losses caused by the dishonest or fraudulent acts of its employees.

Options:

Fidelity

Inherent risk

Opportunity

Residual risk

Question 2

Which of the following statements concerning civil trials in civil law jurisdictions is MOST ACCURATE?

Options:

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

The standard of proof in civil trials is lower than it is in criminal trials.

Civil trials are typically a single event rather than a continual series of meetings and correspondences.

Neither side may appeal an adverse judgment in a civil case.

Question 3

Which of the following can affect the rights that employees may have during an internal investigation?

Options:

Existence of fraud risk factors

Existence of violation red flags

Existence of interstate compacts

Existence of an employment contract

Question 4

In common law jurisdictions failing to suspend routine destruction of electronic data can result in sanctions for failure to preserve relevant evidence

Options:

True

False

Question 5

Jackson believes he has a legal cause of action against Alice, who lives in a foreign country. The fact that Jackson is the plaintiff allows him to bring the lawsuit against Alice in any court in the country where he lives.

Options:

True

False

Question 6

In jurisdictions that allow for corporate criminal liability which of the following is typically required for the corporation to be vicariously liable for the acts of one of its employees?

Options:

Management was directly involved with the offense

Management knew of the underlying offense but did not correct it

The corporation had previous violations of a similar nature

The employee was acting within the scope of their employment

Question 7

A prosecutor died criminal charges against Rosa calming that she stole Juan's personal information and sold his identity on the dark web Juan wants to file a civil lawsuit against Rosa to recover damages arising from the identity theft Can Juan file the civil action before the criminal action against Rosa is completed?

Options:

Yes, the evil action can be filed if the jurisdiction permits parallel proceedings.

No, the civil action cannot be filed if the jurisdiction prohibits counterclaims.

Yes, the evil action can be filed if the jurisdiction permits analogous cairns.

No, the civil action cannot be filed if the jurisdiction prohibits double jeopardy.

Question 8

In systems using adversarial processes, an attorney may impeach an opposing party's witness by showing that the witness:

Options:

Has a keen ability to observe

Made poor consistent statements

Testified from personal knowledge

Is influenced by bias or self-interest

Question 9

Mya has been retained as an expert witness to provide testimony for a trial. Which of the following statements describes the primary purpose of Mya's testimony?

Options:

Mya will assist the fact finder by drawing conclusions regarding the accused's guilt or innocence.

Mya will assist the fact finder by providing specialized knowledge on the admissibility of evidence in the case.

Mya will assist the fact finder by drawing conclusions on the credibility of other witnesses.

Mya will assist the fact finder by providing specialized knowledge that will help them understand evidence.

Question 10

Which of the following statements regarding civil lawsuits in most jurisdictions is CORRECT?

Options:

The plaintiffs initial filing does not typically need to contain a summary of the evidence

Civil lawsuits begin with the filing of a pleading, usually in the jurisdiction in which the defendant resides or where the claim arose

The plaintiff’s initial filing with the court does not typically need to include the specific facts on which the claim relies.

All of the above are correct

Question 11

Which of the following scenarios MOST ACCURATELY represents a suitability violation in a jurisdiction that imposes a suitability requirement on broker-dealers?

Options:

A broker-dealer is unfamiliar with their client's risk appetite, so they refuse to make any investments on the client's behalf without additional information.

A broker-dealer learns about a promising investment and recommends it to their new client without knowing the client's relevant personal and financial information.

A broker-dealer makes an extremely conservative recommendation to a client that aligns with their risk profile and financial information.

A broker-dealer makes an investment for a client without first obtaining the client's approval to make that specific transaction on their behalf.

Question 12

Clara is a fraud examiner investigating a potentially fraudulent misrepresentation made in the sale of a security. Which of the following questions should Clara ask to determine if the misrepresentation was material?

Options:

"Would a reasonable investor want to know the information to make an informed decision?"

"Is the person who made the misrepresentation registered as a broker-dealer?"

"Were potential investors promised guaranteed returns in the misrepresentation?"

"Did the person who made the representation have authorization to make the statements that are in dispute?"

Question 13

Which of the following scenarios is an example of the criminal sanction known as criminal forfeiture?

Options:

As part of his sentence for embezzlement, a defendant is ordered to pay back his employer for the money he stole.

As part of her sentence for bribery a defendant is ordered to transfer a car she received as a bribe to the government

As part of her sentence for money laundering a defendant is sentenced to a three- to five-year term of incarceration

As part of his sentence for tax evasion, a Defendant is ordered to pay a fine of $10,000 to the government

Question 14

Which of the following statements about the International Organization of Securities Commissions (IOSCO) is TRUE?

Options:

IOSCO's primary goal is to establish a separate set of securities regulations for securities exchanges in developing nations.

IOSCO is comprised of commissioners and administrators responsible for regulating securities and administering securities laws in their countries.

IOSCO is an international industry association that sets global accounting and financial reporting standards.

IOSCO is responsible for enforcing regulatory standards that govern all international securities markets.

Question 15

Robert, a Certified Fraud Examiner (CFE), wants to ensure that the authenticity of the evidence he collected during his investigation is not compromised. His main objective should be to:

Options:

Limit access to the evidence to judicial officials prior to trial proceedings.

Prevent all other parties from obtaining physical control of the evidence.

Establish a clear chain of custody to show that the evidence has not been altered.

Only alter or materially change the evidence himself if absolutely necessary.

Question 16

Ellis works for a business that filed for bankruptcy. The administrator presiding over the bankruptcy contacts Ellis and requests information regarding his employer's financial affairs Assuming the administrator has all of the powers recommended in the World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (World Bank Principles) which of the following is TRUE?

Options:

The administrator may only seek information regarding the bus ness that filed bankruptcy if Ellis consents to providing it.

The administrator has no power to obtain the information under any circumstances

The administrator may compel Ellis to provide the information despite Ellis's relationship to the business

The administrator may not obtain the information unless the business agrees in writing

Question 17

Under the best practices listed in the Financial Action Task Force (FATF) Recommendations concerning large cash transactions with customers which of the following transactions would require a report to be Wed with the government?

Options:

A domestic credit card purchase of a piece of jewelry above the jurisdiction's designated threshold

A cash payment to a restaurant supplier for restaurant supplies above the jurisdiction's designated threshold

An international purchase of a small boat with a lump-sum cash payment below the jurisdiction's designated threshold

A lump-sum cash deposit to a bank above the jurisdiction's designated threshold

Question 18

Which of the following is a red flag that might be indicative of an entity operating a security business without the proper license or registration?

Options:

There are justified gaps in the work history of promoters at the entity.

The entity is known to have a history of regulatory problems.

There is a lack of customer complaints against the entity.

The entity's website contains detailed background information.

Question 19

Which of the following is NOT a requirement of the European Union's (EU) General Data Protection Regulation (GDPR)?

Options:

An organization must delete a data subject's personal data automatically when the data are no longer m use.

An organization must have a documented lawful basis for collecting or processing personal data.

An organization generally must notify all affected data subjects without undue delay when a high-risk data breach occurs

An organization must confirm or deny that it possesses a data subject's personal data upon that individual's request

Question 20

The________________requires that an employee act solely in the best interest of their employer, free of any serf-dealing, conflicts of interest, or other abuse that results in a personal advantage

Options:

Duty of care

Duty of responsibility

Duty of employee trust

Duty of loyalty

Question 21

Regarding the litigation privilege in common law jurisdictions, which of the following is the MOST ACCURATE statement?

Options:

The litigation privilege prevents disclosure of documents prepared in anticipation of litigation.

The litigation privilege does not protect communications made by third-party agents, such as consultants.

The litigation privilege prevents disclosure of documents entered as evidence during the course of litigation.

The litigation privilege protects all communications related to a case, regardless of when they occurred.

Question 22

Which of the following statements concerning the appointment of expert witnesses at that is accurate?

Options:

Generally, the court appoints the primary expert witnesses in inquisitorial jurisdictions.

Generally, only the parties may select expert witnesses in inquisitional jurisdictions.

Generally the court selects the primary expert witnesses in adversarial jurisdictions.

Generally, only the parties may select experts to introduce testimony in adversarial jurisdictions

Question 23

Which of the following is MOST LIKELY to affect the rights that an employee may have during an internal investigation?

Options:

The likelihood that the case will eventually go to trial.

The existence of a collective bargaining agreement.

The amount of evidence that the employer possesses.

The length of the employee's tenure at the organization.

Question 24

Which of the following is NOT a right of the accused under the United Nations' (UN) International Covenant on Civil and Political Rights (ICCPR)?

Options:

Right of the accused to be informed of criminal charges

Right to be presumed innocent until proven guilty

Right to a trial by jury

Freedom from arbitrary arrests

Question 25

Acme Inc. is the debtor in a bankruptcy case that will enable the organization to continue conducting business after the proceeding. Which of the following is one of the preferred approaches to governance and management of the proceeding under the World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (World Bank Principles)?

Options:

The creditor with the largest claim against Acme is entrusted as the insolvency supervisor.

Exclusive control of the proceeding is entrusted to an independent insolvency representative.

Acme's management and its creditors oversee governance responsibilities.

Supervision of Acme's management is undertaken by the company's internal audit function.

Question 26

The Financial Action Task Force (FATF) Recommendations slate that a financial institution s customer due diligence (COD) procedures should include continued monitoring of a customer's business relationships and transactions.

Options:

True

False

Question 27

Which of the following is TRUE in regard to authenticating evidence in most common law systems?

Options:

Digital records cannot be authenticated by testimony from a witness with personal knowledge

For evidence to be authenticated it must be reviewed and voted on by a jury

Exhibits that cannot be authenticated will not be admitted regardless of relevance

The purpose of authentication is to ensure that hearsay is not admitted into evidence

Question 28

Which of the following statements concerning civil trials in common law jurisdictions is MOST ACCURATE?

Options:

Civil jury trials must have the same number of jurors as in criminal jury trials.

Neither side may appeal an adverse judgment in a civil case

Jury verdicts m civil trials must always be unanimous

in most civil cases, the standard of proof is the preponderance of the evidence

Question 29

Consents to searches by government agents that are obtained by force, duress, or bribery are NOT effective under the law and do NOT eliminate the need for a search warrant.

Options:

True

False

Question 30

Which of the following statements regarding the qualifications of expert witnesses in most inquisitorial jurisdictions is CORRECT?

Options:

Certification in a specific field is always enough to qualify an expert

An excerpt is not qualified to testify unless all parties to the litigation approve

Experts are generally prohibited from serving as expert witnesses in multiple cases

The qualification of an expert is generally based on standardized requirements

Question 31

Cory has been charged with lax evasion for filing a false tax return. As a defense, Cory claims that he made an honest mistake due to the tax law's complexity, and he did not intentionally submit an incorrect tax return If the court finds that his mistake was in good faith the most likely will NOT be found to have "willfully'" engaged m fraudulent actions to avoid reporting or paying his taxes.

Options:

True

False

Question 32

Under the Financial Action Task Force (FATF) Recommendations, a financial institution's customer due diligence (CDD) procedures involve a single check on the customer's business relationships and transactions.

Options:

True

False

Question 33

Company A used Company B to recover damages for the breach of a contract. In the same proceeding. Company B sought damages for an allegation that Company A fraudulently induced Company B into entering the contract. In this case, what would Company B's claim against Company A be called?

Options:

Counterclaim

Collateral attack

Reversal

Cross-claim

Question 34

Which of the following statements concerning judgments involving parties in multiple jurisdictions is MOST ACCURATE?

Options:

Whether a foreign judgment is enforceable always depends on where the defendant's assets are located

If a party obtains a judgment in one jurisdiction, that party will automatically be able to enforce the judgment in any jurisdiction

If a party obtains a judgment in one jurisdiction, that party will automatically be able to enforce the judgment wherever the defendant resides

Whether a foreign judgment is enforceable might depend on whether the two jurisdiction have an enforcement treaty

Question 35

According to the best practices regarding 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?

Options:

A domestic cash deposit into a bank of a sum that is below the jurisdiction's designated threshold.

A single cash purchase of restaurant supplies for a sum that is above the jurisdiction's designated threshold.

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

All of the above.

Question 36

Claude stole a large amount of cash from his employer and then deposited the funds into a domestic bank account Next, he wired the illicit funds to a foreign bank account and engaged m several other transactions using foreign accounts to make them difficult to trace Finally, he transferred the funds back to a domestic account and then spent the money. Which of the following actions was the layering stage of Claude's money laundering scheme?

Options:

When he first deposited the funds into a domestic account

When he first stole the cash from his employer

When he moved the funds through several transactions using foreign accounts

When he spent the money

Question 37

Alicia has been charged with tax evasion. As a defense, Alicia claims that she made an honest mistake due to the complexity of the tax law and did not intentionally violate the jurisdiction's tax laws. If the court finds that her mistake was made in good faith, then she will most likely NOT be found to have willfully engaged in fraudulent actions to avoid reporting or paying her taxes.

Options:

True

False

Question 38

Which of the following statements concerning the appointment of expert witnesses at that is accurate?

Options:

Generally, the court appoints the primary expert witnesses in inquisitorial jurisdictions.

Generally, only the parties may select expert witnesses in inquisitor jurisdictions

Generally the court selects the primary expert witnesses in adversarial jurisdictions

Generally, only the parties may select experts to introduce testimony in adversarial jurisdictions

Question 39

Which of the following is the MOST ACCURATE statement about serf-regulatory organizations (SROs) in the securities industry?

Options:

An SRO generally has sole regulatory authority over the securities industry in the jurisdiction in which it operates

In most jurisdictions. SROs are prohibited from participating in the resolution of disputes related to securities transactions

An SRO is a governmental entity that exercises regulatory authority over the securities industry in its jurisdiction

In some jurisdictions SROs establish the standards and rules under which members of the securities industry operate

Question 40

The same customer comes into a casino each day and deposits a large amount of cash into an account but after very little gambling the customer withdraws the funds The casino employees suspect that the customer may be engaged in money laundering activity Assuming that the anti-money laundering (AML) regulations that govern the casino’s activities correspond to the Financial Action Task Force (FATF) Recommendations the casino:

Options:

May, but is not required to file a report of suspicious transactions related to possible money laundering with appropriate authorities

May not file a report of suspicious transactions related to potential criminal activity with appropriate authorities

Is required to file a report of suspicious transactions with appropriate authorities because the employees suspect money laundering violations

Is required to file a cash transaction report for possible criminal activity with appropriate authorities because cash was involved

Question 41

Which of the following is a requirement of the European Union's (EU) General Data Protection Regulation (GDPR)?

Options:

An organization must obtain a data subject's consent before collecting or processing personal data about that individual.

An organization must refrain from confirming or denying whether it is in possession of a data subject's personal data even if the data subject requests this information.

An organization must provide a data subject's personal data upon that individual's request for a reasonable fee.

An organization must notify all affected data subjects within six months when a data breach occurs that is likely to result in a high risk to their rights and freedoms.

Question 42

Which of the following statements concerning alternative remittance systems is INCORRECT?

Options:

The systems are not necessarily illegal.

Funds are sent and received without the use of traditional financial institutions.

The systems are characterized by a lack of physical or digital transfer of currency between payers and payees.

The ledgers used typically contain information regarding payers and payees, such as names and account numbers.

Question 43

Samson Inc. operates in a jurisdiction that prohibits unreasonable workplace searches and surveillance in areas or items where employees have a reasonable expectation of privacy. In which of the following areas or items can an employee at Samson Inc. MOST LIKELY have a reasonable expectation of privacy during a workplace search?

Options:

A laptop computer that was issued by Samson Inc.

A desk drawer in a communal workspace.

A recycling bin in the employee's office.

A personal mobile phone brought to the office from home.

Question 44

Which of the following is the MOST ACCURATE statement about the litigation privilege in common law jurisdictions?

Options:

The primary purpose of the litigation privilege is to protect confidential communications between a client and the client's legal representative

The litigation privilege only protects documents and materials prepared by an attorney

The litigation privilege applies only while a trial is underway

The litigation privilege applies only to documents and materials prepared in anticipation of litigation

Question 45

Raj is an employee who works in a jurisdiction that prohibits unreasonable workplace searches and surveillance in areas or items where employees have a reasonable expectation of privacy. In which of the following is Raj MOST LIKELY to have a reasonable expectation of privacy?

Options:

A backpack brought from home

A filing cabinet in the office lobby

A waste bin m the employee's office

A company-issued tablet computer

Question 46

Evidence that tends to make some tact at issue more or less likely than it would be without the evidence is called:

Options:

Circumstantial evidence

Testamentary evidence

Demonstrative evidence

Relevant evidence

Question 47

Which of the following choices is a method of pretrial civil discovery that is often found in common law jurisdictions?

Options:

Injunctions

Production writs

Indictments

Affidavits of documents

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Certified Fraud Examiner (CFE) - Law Questions and Answers

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