Pass the ACFE Certified Fraud Examiner CFE-Fraud-Schemes-and-Financial-Crimes Questions and answers with Dumpstech

The correct answer is B. Under cash-basis accounting, revenues and expenses are recorded based on the movement of cash. Revenue is recorded when cash is received, and expenses are recorded when cash is paid, regardless of when goods are delivered, services are performed, or obligations are incurred. Options A and C describe accrual-basis concepts. Accrual accounting records revenue when earned and matches related expenses to the same accounting period. Option D is incorrect because cash-basis accounting is generally simpler than accrual-basis accounting, although it can provide a less complete picture of financial performance. The ACFE materials emphasize that accrual accounting gives a truer financial picture and is required under GAAP.

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The correct answer is D. Organizations should protect proprietary information by using appropriate physical, administrative, and technical safeguards. For highly confidential discussions, specially constructed quiet rooms can reduce the risk of eavesdropping, interception, or unauthorized disclosure. The ACFE materials identify quiet rooms as part of a program for safeguarding proprietary information. Option A is not the best answer because the focus should be on protecting the organization’s own information, not merely studying competitors. Option B is impractical and too absolute; visitor access should be monitored and controlled, not necessarily prohibited entirely. Option C is incorrect because data minimization, not maximization, reduces exposure during a breach. Effective protection also includes policies, training, data classification, nondisclosure agreements, and access controls.

Timothy is a victim of a pig butchering scheme. This scam combines long-term relationship manipulation with fraudulent investment activity, commonly involving cryptocurrency. The fraudster builds trust over weeks or months, moves the victim to a private messaging channel, and encourages investments through a fake platform. The victim often sees apparent gains, but the trading platform is controlled by the fraudster or does not exist. Once the victim attempts to withdraw funds, the fraudster disappears or demands more money. This is not a Ponzi scheme because the facts do not involve paying old investors with new investor funds. It is not a pump-and-dump because no market manipulation of a traded security is described. It is broader than a simple advance-fee scheme.

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Detailed Explanation:

Rationale for Correct Answer: A ghost employee scheme occurs when someone (real or fictitious) is added to payroll, and paychecks are diverted to the fraudster. The key requirement is that the “ghost” is listed on payroll records.

Analysis of Incorrect Options:

A – The ghost may be fictitious or a real former employee.

B – Employment classification is irrelevant.

C – A ghost could be a current, terminated, or entirely fictitious employee.

Key Concept: Payroll fraud – ghost employee schemes.