Free CFE-Financial-Transactions-and-Fraud-Schemes Practice Test Questions and Answers (2026)

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Q: 1
Which of the following can constitute a bribe, even if the illicit payment is never actually made?
Options
21 comments in the community discussion
1
C tbh, since a kickback could be set up without the money actually being passed. I always think about the agreement itself being enough sometimes. Not totally sure, curious if others agree.
1
Ugh, these wording tricks always get me. A is what they're after since just offering a bribe can be enough-actual payment doesn't have to happen for it to qualify legally. Pretty sure that's how it's tested on most fraud exams, but C is tempting too.
Q: 2
__________ may be defined as the offering, giving, receiving or soliciting anything of value to influence an official act.
Options
19 comments in the community discussion
1
C from what I've seen in practice sets. Official guide covers this definition for bribery. Anyone use extra flashcards for this section?
1
I’d say C, since the definition is textbook bribery, but A (corruption) always looks tempting on these.
Q: 3
__________ inventory and other assets is relatively common way for fraudsters to remove assets from the books before or after they are stolen.
Options
17 comments in the community discussion
3
C/D? I know D is classic for standard write-offs, but fraud questions almost always go with C since false shipping slips are a common trick to make inventory disappear. I think C fits the question better, unless I'm missing some context.
1
Option D seems right at first since write-offs impact the books directly, but for actually removing assets after theft, C (false shipping slip) is usually what fraudsters use to cover their tracks. Unless there's an audit trail check, though, I might mix these up.
Q: 4
Which of the following is NOT the reason to bribe employees of the purchaser?
Options
17 comments in the community discussion
1
A is wrong, C. Bid-splitting is usually an internal tactic, not something that needs external bribery. The others could actually benefit an outside party looking to manipulate a bid process. Seen this trick in a few practice sets.
1
Yeah, I'm with C. Bid-splitting is generally done by the purchaser's own employees to bypass controls, not something you'd bribe for.
Q: 5
The most common method of detection in corruption cases is:
Options
18 comments in the community discussion
1
It’s C. Pretty sure tips are the most cited in ACFE reports, not B which is a common trap on these questions.
1
Seriously wish these exams would stop mixing up 'most common' with 'most effective', just makes it confusing. Going with C, since every ACFE report I’ve seen puts tips way out front as the actual trigger for finding corruption. Internal controls and audits help, but most cases are uncovered because someone speaks up. N
Q: 6
Verify supporting documentation on outstanding checks written for a material amount is a test used to conduct for:
Options
18 comments in the community discussion
2
Probably D since cut-off statements often help confirm outstanding checks near period-end, but I'm not 100 percent on that.
2
Option C is the way I saw on practice exams-bank confirmations ask banks to verify info about outstanding checks, including large ones. D is more for cut-off timing, not just documentation. Open to correction if I missed a twist.
Q: 7
When a victim company purchases unnecessary goods or services from a supplier at the direction of the corrupt employee, this results in:
Options
17 comments in the community discussion
2
B tbh. The key is the company being convinced to buy things it doesn't need, which is classic for a need recognition scheme. C is tempting but that's usually about faking exclusivity or sole-source justifications, not just buying unneeded stuff. Seen similar on practice tests, so pretty sure B is right here.
1
Not C, it's B. The trap is thinking sole-source, but here it's just about tricking the company into unnecessary buys.
Q: 8
In which phase of competitive bidding process, fraudsters attempt to influence the selection of a contractor by restricting the pool of competitors from whom bids are sought?
Options
13 comments in the community discussion
1
B
1
B , saw similar on exam reports, restricting the pool is typically in solicitation phase.
Q: 9
Which of the following search is used for unusually high incidence of returns and allowances scheme?
Options
18 comments in the community discussion
1
Option C
1
Option B would work too, since tracking disposals of allowances rather than matching to reorders could catch manipulations. Sometimes fraudsters process fake returns and don't actually reorder inventory. I think B could flag that pattern, though C is probably more standard. Not 100 percent sure, open to other takes
Q: 10

CORRECT TEXT One of the simplest ways to justify unacceptable conduct and avoid guilt feelings is to invent a good reason for ________.

Your Answer
15 comments in the community discussion
6
Pretty sure the right term is embezzling for this one. The question focuses on rationalizing conduct to avoid guilt, which is classic for internal theft scenarios in the fraud triangle. Bribery gets tempting since it also involves justification, but that's more tied to external influence or corruption schemes. I'd s
3
Embezzling. Saw a similar question in the practice set and it definitely wanted embezzling, not just "theft" or "fraud."
Q: 11

CORRECT TEXT A ____________ can be very costly for an organization to undertake, both in terms of money and time spent.

Your Answer
7 comments in the community discussion
4
Yep, civil lawsuit makes sense here since those can drag out for years and rack up big legal fees. Pretty sure that's what they're after since the cost piece is front and center.
3
Clear question, seen similar on practice sets. Civil lawsuit
Q: 12

CORRECT TEXT ___________ allows the fraud examiner to inspect key attributes on a smaller portion (or sample) of those documents.

Your Answer
10 comments in the community discussion
9
Statistical sampling, this popped up on my mock a few weeks ago.
5
Statistical sampling. Careful, some might pick random sampling but that's not precise enough here.
Q: 13

CORRECT TEXT ______________ is required not only for theft, but for procedures to detect errors, avoid waste and insure a proper amount of inventory is maintained.

Your Answer
4 comments in the community discussion
3
Would it also accept stock control or just inventory control for full credit?
1
Inventory controlPretty sure that's what's listed in the official guide and practice questions. Maybe textbook says stock control too, but "inventory control" is what I've seen most in exam prep. If someone wants to double-check in the manual, let me know if it's different.
Q: 14

CORRECT TEXT _________ is defined as a person who works for the victim organization and who is primary culprit

Your Answer
11 comments in the community discussion
6
Had something like this in a mock, pretty sure it’s "principal perpetrator". Fits since they’re asking for the main insider behind the fraud. Agree?
5
I don't think it's just "employee" or "suspect" here-the exam wants the proper term. Pretty sure "principal perpetrator" is right since that's the one who actually commits the fraud within the organization. Saw a distractor with "collaborator" in some practice stuff, but that's not specific enough. Let me know if yo
Q: 15

CORRECT TEXT __________ means that traditional bribery statutes proscribe only payments made to influence the decisions of government agents or employees.

Your Answer
2 comments in the community discussion
6
Pretty sure it’s ‘official act.’ That term is used in bribery laws to specifically mean influencing a government officer’s decision in their formal duties. I think people mix this up with ‘gratuity’ sometimes, but that’s broader. Open to corrections if I’m missing something here.
1
Official act
Q: 16

CORRECT TEXT The _______________ cost method of pricing would carry an asset’s value on the financial statements as what it would currently cost, considering inflation.

Your Answer
8 comments in the community discussion
6
Price-level adjusted historical cost, matches what I saw in some exam reports.
5
Price-level adjusted historical cost. Saw this in the official study guide and some practice questions.
Q: 17
Asset misappropriation schemes were the “middle children” of the study; they were more common than fraudulent statements and more costly than corruption.
Options
12 comments in the community discussion
1
Isn't this backwards? Asset misappropriation is usually the least costly, right?
Seen similar phrasing in my practice set, this should be False.
Q: 18
Placing any restriction in the solicitation documents that tend to restrict competition is called prebid solicitation.
Options
14 comments in the community discussion
1
True imo, B is tricky but those initial restrictions are classic prebid solicitation in ACFE terms.
1
False
Q: 19
Bank cut-off statements should be requested for 10-15 days after the closing date of the balance sheet.
Options
9 comments in the community discussion
1
Yeah, that trap is False but actually it's True here. Standard fraud check to request that cut-off period.
1
Pretty sure it's True. False would be a trap since auditors check for activity right after the balance sheet date.
Q: 20
Accounting records are designed to be kept on subjective rather than objective evidence.
Options
6 comments in the community discussion
1
Looks like False here. Accounting relies on objective evidence, not subjective opinion. Not 100% but that's how I remember it.
1
False tbh. Accounting records should rely on objective evidence like documentation, not someone's opinion or estimate. Easy to get caught by the wording here, but 'subjective' is the trap. Disagree?
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