New Release CFE-Financial-Transactions-and-Fraud-Schemes Certified Fraud Examiner Questions

Detailed Explanation:

Rationale for Correct Answer: Best practices in preventing EFT fraud require mailing PINs and account information separately, never together. Sending them together creates a serious security risk if intercepted.

Analysis of Incorrect Options:

A – Correct preventive measure: immediately cancel and reissue stolen access devices.

B – Correct preventive measure: validating addresses helps detect fraudulent applications.

C – Correct preventive measure: segregation of duties reduces insider fraud risks.

Key Concept: EFT fraud prevention through layered security and separation of duties.

Detailed Explanation:

Rationale for Correct Answer:Conflict of interest schemes occur when an employee, manager, or agent has an undisclosed personal interest in a transaction that is adverse to their employer. The Fraud Examiners Manual (2020) notes that one of the most common forms is when an employee has a hidden ownership or financial interest in a vendor that does business with the company. This compromises objectivity and creates self-dealing risks.

Analysis of Incorrect Options:

B. Salesman interest – Too narrow and not representative of the standard conflict scheme definition.

C. Purchaser interest – Purchasers are often involved, but the broader definition encompasses all employees.

D. Dealer interest – “Dealership interest” is not a recognized ACFE fraud scheme classification.

Key Concept: Conflict of Interest scheme under Corruption.

Detailed Explanation:

Rationale for Correct Answer: Human intelligence (HUMINT) involves gathering information directly from people, often through deception, elicitation, or impersonation. Georgina’s posing as a customer to obtain confidential details fits this method.

Analysis of Incorrect Options:

B. Baiting – A social engineering tactic using false promises (e.g., malware disguised as freebies).

C. Scavenging – Collecting discarded information (e.g., dumpster diving).

D. Open-source intelligence – Gathering data from public records, news, or websites, not through elicitation.

Key Concept: Methods of competitive intelligence and social engineering.