Pass the ACFE Certified Fraud Examiner CFE-Investigation Questions and answers with Dumpstech

To confirm ownership of a building, real estate and permit records are most useful. The Manual notes that real property records and related permits identify the owner, provide legal descriptions, and show improvements such as construction of commercial buildings. Court or voter registration records would not typically establish property ownership.

The Fraud Examiners Manual states:

“The expenditures method works best when the subject spends illicit income on consumables (e.g., travel and entertainment), because when the subject spends the illicit income, it will not cause an increase in net worth.”

CFE Prep confirms:

“The expenditures method … is best used when the subject spends illicit income on consumables (such as travel and entertainment) that would not cause an increase in net worth.”

Thus, the correct answer is A.

The Fraud Examiners Manual stresses that interview notes should be kept separately for each interview, even if the session is electronically recorded, because recordings can fail or be challenged. Verbatim transcripts are not expected, and impressions of guilt should never be included. Best practice is to keep clear, accurate, separate records for every interview .

“Even when a victim refers a fraud case for criminal prosecution, the government will usually not disclose the contents of nonpublic records with the victim during the investigation”.

Thus, option D is most accurate.

“Distractions should be kept to a minimum. Ideally, there should be no photographs, windows, or other objects in the room. Chairs should be placed about four to six feet apart, and the accused should not be permitted to sit behind any physical barriers, such as chairs, tables, or desks” .

The door should be closed (but not locked), not open .

Tables or desks should not be between interviewer and suspect .

Thus, the correct adjustment is removing distractions (pictures/posters).

The Fraud Examiners Manual explains:

“Before running tests on the data, the fraud examiner must make certain the data being analysed are relevant and reliable for the objective of the engagement… Using the profile of potential frauds as a guide, the fraud examiner must identify the target data for analysis”.

Best practices when working with confidential informants include documenting payments and identities in ways that protect anonymity but avoid risks. The Fraud Examiners Manual and CFE Prep emphasize avoiding cash payments because they reduce transparency and create audit trail problems. Paying in cash is therefore NOT considered a best practice, whereas using initials, obtaining receipts, and documenting informant information in reports can be acceptable methods.

The Fraud Examiners Manual notes that EU privacy laws (e.g., EU Data Protection Directive, precursor to GDPR) restrict or prohibit the transfer of personal data to non-EU countries without compliance:

“Many foreign countries—and those in the European Union (EU) in particular—restrict or prohibit processing and transferring personal data… The EU’s directive… places limits on transmitting personal data to non-EU countries”.

Thus, since the fraud examiner is handling data about an EU-based employee, GDPR compliance is required, even if the examiner is outside the EU.

Explanation with Extracts = Predication requires sufficient circumstances to suggest fraud. The CFE Prep Guide explains:

“Fraud examiners should not investigate beyond the available predication… There is insufficient predication to confront Wallace or to make any direct allegations about fraud, but Carter does have adequate predication to make discreet inquiries”.Similarly, Arnold may discreetly inquire but not accuse or search property without further evidence.

“Fraud examinations should proceed from the general to the specific. That is, they should begin with general information that is known, starting at the periphery, and then move to the more specific details”.

This method avoids premature assumptions and ensures systematic evidence development.