Certified Fraud Examiner Certification CFE-Law Sample Questions Reliable
Prepare for the Actual Certified Fraud Examiner CFE-Law Exam Practice Materials Collection
NEW QUESTION # 111
Management at ABC Org. suspects that Marcia, an employee in charge of negotiating vendor contracts, has a conflict of interest. For ABC Org.'s conflict-of-interest claim to be actionable, which of the following scenarios must be TRUE?
- A. Marcia must have failed to disclose that she had a personal or economic interest in a matter that could influence her professional role.
- B. Marcia must have informed the organization that she had a connection to one or more of the vendors with whom she was negotiating.
- C. The alleged conflict must have resulted in a financial loss for the organization.
- D. The alleged conflict must have resulted in a direct personal benefit for Marcia.
Answer: A
Explanation:
This question tests your knowledge of Domain 7.
In the context of Individual Rights During Examinations, specifically relating to employee, the question asks about TRUE, ABC.
The correct answer is B: Marcia must have failed to disclose that she had a personal or economic interest in a matter that could influence her professional role..
This question relates to individual rights during examinations. The correct answer accurately describes the legal protections, obligations, or privacy considerations that apply in workplace investigations. Fraud examiners must balance investigative needs with legal protections for individuals.
NEW QUESTION # 112
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?
- A. An international purchase of a small boat with a lump-sum cash payment below the jurisdiction's designated threshold
- B. A cash payment to a restaurant supplier for restaurant supplies above the jurisdiction's designated threshold
- C. A lump-sum cash deposit to a bank above the jurisdiction's designated threshold
- D. A domestic credit card purchase of a piece of jewelry above the jurisdiction's designated threshold
Answer: C
NEW QUESTION # 113
Leslie, a business owner, submits tax information regarding her company's finances to her country's taxing authority. The taxing authority allows companies to subtract the cost of production from their gross sales to determine the taxable income. To reduce her tax liability, Leslie inflates the costs of production on her tax forms. Which of the following schemes has Leslie MOST LIKELY committed?
- A. A value-added tax evasion scheme
- B. A tax credit evasion scheme
- C. A sales tax scheme
- D. A falsified tax deduction scheme
Answer: D
Explanation:
This question tests your knowledge of Domain 6.
In the context of Tax Fraud, specifically relating to tax evasion, the question asks about her company's finances to her country's taxing authority, MOST LIKELY.
The correct answer is B: A falsified tax deduction scheme.
This question focuses on tax fraud concepts. The correct answer distinguishes between legal tax avoidance and illegal tax evasion, or identifies specific tax evasion schemes. Tax fraud investigations require specialized knowledge of tax laws and common evasion techniques.
References:
- CFE Exam Content Outline: Domain 6: Tax Fraud
- tax evasion
- Fraud Examiners Manual, Law Section
NEW QUESTION # 114
Jay files for bankruptcy in order to settle all of his debts. During the bankruptcy proceeding, the court sells off his property and uses the proceeds to pay Jay's creditors, thereby discharging all of Jay's dischargeable debts.
This type of bankruptcy proceeding can BEST be described as:
- A. Reorganization bankruptcy
- B. Debt dismissal bankruptcy
- C. Liquidation bankruptcy
- D. Debt adjustment bankruptcy
Answer: C
Explanation:
This question tests your knowledge of Domain 3.
In the context of Bankruptcy Fraud, specifically relating to bankruptcy, the question asks about BEST.
The correct answer is B: Liquidation bankruptcy.
This question focuses on bankruptcy fraud concepts. The correct answer correctly identifies the relevant bankruptcy process, filing type, or fraud scheme. Understanding bankruptcy proceedings and the roles of various parties is essential for fraud examiners investigating these cases.
NEW QUESTION # 115
The Organisation for Economic Co-operation and Development's (OECD) Recommendation on Combating Bribery in International Business (the Recommendation) urges member states to combat the bribery of foreign public officials by improving which of the following primary areas within their respective infrastructures?
- A. Public safety systems and regulations
- B. Banking and accounting requirements and practices
- C. Laws related to criminal jurisdiction
- D. Requirements and practices related to public health
Answer: B
Explanation:
The correct answer is D. Banking and accounting requirements and practices. Under the CFE Law topics addressing anti-bribery and corruption, the OECD Recommendation focuses heavily on strengthening the systems that help detect, prevent, and document improper payments to foreign public officials. A core part of that framework is the improvement of banking transparency, accounting standards, recordkeeping, internal controls, and audit-related practices. These areas are critical because bribery is often concealed through false entries, off-the-books accounts, sham invoices, disguised consulting fees, or misleading payment descriptions.
This emphasis is consistent with the fraud examiner's role in identifying how corrupt payments move through an organization's financial systems. By improving accounting and banking requirements, member states make it harder for individuals and entities to hide bribes and easier for investigators to trace suspicious transactions.
The other choices are not the primary focus of the Recommendation in this context. Public safety and public health are unrelated to the OECD's principal anti-bribery infrastructure goals, and although criminal laws are important, the Recommendation is especially known for encouraging stronger financial reporting and accounting controls as anti-corruption tools. Therefore, D is the most accurate choice.
NEW QUESTION # 116
The government filed a avil action against a politician for accepting real estate as a bribe. There is a possibility that the politician could transfer the real estate to a third party before the court enters a final judgment Which type of order should the government seek from the court to prevent the politician from transferring the real estate?
- A. Litigation hold
- B. Declaratory relief
- C. Prejudgment attachment
- D. Preservation order
Answer: C
Explanation:
This question tests your knowledge of Uncategorized.
the question asks about the core concepts in this area.
The correct answer is C: Prejudgment attachment.
This question tests your understanding of key fraud examination concepts and legal principles.
References:
- CFE Exam Content Outline: Uncategorized
- Fraud Examiners Manual, Law Section
NEW QUESTION # 117
Which of the following examples of judicial systems would BEST be described as a civil law system?
- A. The courts are bound by both previous court decisions and codified principles or statutes
- B. The courts are bound primarily by previous court decisions to reserve legal issues
- C. The courts are bound by codified principles or statures but are not bound by previous court decisions
- D. The courts are allowed to consider both codified statutes and previous court decisions but are bound by neither
Answer: C
Explanation:
This question tests your knowledge of Domain 1.
In the context of Overview of the Legal System, specifically relating to civil, the question asks about BEST.
The correct answer is D: The courts are bound by codified principles or statures but are not bound by previous court decisions.
This question relates to the legal system framework. Understanding the distinction between different legal systems and processes is crucial for fraud examiners. The correct answer accurately describes the relationship between different legal entities and their jurisdictions.
NEW QUESTION # 118
Luisa is charged with violating a criminal law that prohibits making false statements to government agencies.
Which of the following is NOT one of the elements the government must prove?
- A. The government relied on the false statement.
- B. The defendant made a false statement.
- C. The false statement was material.
- D. The defendant knew the statement was false.
Answer: A
Explanation:
Under the ACFE Fraud Examiners Manual discussion of false statements and false claims involving government agencies, the prosecution must establish specific statutory elements to obtain a conviction.
Generally, the government must prove that the defendant knowingly and willfully made or used a false statement or document, that the statement was false, that the defendant knew of its falsity, and that the false statement was material. Materiality means that the statement had the natural tendency or capability of influencing the decision of the governmental agency.
Importantly, the government is not required to prove that it actually relied upon the false statement or that it suffered a loss as a result. The offense is complete once a materially false statement is knowingly made within the jurisdiction of a government agency. Actual reliance or damages are not necessary elements.
Therefore, while materiality, knowledge of falsity, and the making of the false statement are essential components of the offense, proof that the government relied on the statement is not required. For purposes of CFE examination preparation, it is critical to distinguish between materiality and reliance, as they are not synonymous under federal false statement statutes.
NEW QUESTION # 119
Which of the following is the MOST ACCURATE statement about the circumstances under which a conflict of interest claim would be actionable against an agent?
- A. The agent must have purported to act on behalf of or as an agent for an identified principal
- B. The agent must have been authorized by someone with actual authority to carry out the transaction at issue
- C. The agent must have informed the principal of their actions
- D. The agent must have had an undisclosed interest m a matter that could influence their professional role
Answer: D
Explanation:
This question tests your knowledge of Uncategorized.
the question asks about MOST ACCURATE, the circumstances under which a conflict of interest claim would be actionable against an agent.
The correct answer is B: The agent must have had an undisclosed interest m a matter that could influence their professional role.
This question tests your understanding of key fraud examination concepts and legal principles.
NEW QUESTION # 120
Which of the following is a legal element that must be shown to prove a claim for official bribery?
- A. The government suffered damages because of the bribe.
- B. The defendant failed to exercise due care.
- C. The defendant acted negligently.
- D. The defendant gave or received something of value.
Answer: D
Explanation:
The correct answer is D. Official bribery concerns the corruption of a public official in connection with an official act of government. A core element is that the defendant gave, offered, solicited, or received something of value in exchange for influencing official action. ACFE materials describe official bribery as the corruption of a public official to influence an official act, and federal bribery law likewise centers on a thing of value being corruptly given or received in connection with official action.
Option A is incorrect because proof that the government suffered measurable damages is not generally required to establish the offense. The wrong lies in corruptly influencing official action, not in proving a completed financial loss. Option B is incorrect because bribery is not a negligence-based offense; it requires corrupt intent, not mere carelessness. Option C is also incorrect because failure to exercise due care is associated with negligence concepts, not bribery. The defining feature of bribery is the corrupt exchange itself. Therefore, among the choices, the legal element that must be shown is that the defendant gave or received something of value, making D the most accurate answer.
NEW QUESTION # 121
Which of the following statements concerning front businesses as a method of laundering money is the LEAST ACCURATE?
- A. Front businesses provide cover for delivery and transportation related to illegal activity
- B. Front businesses benefit launderers by providing a safe place to manage criminal activities
- C. A red flag of a front business is the observation of a large number of customers during peak operating hours
- D. From criminals' perspective a disadvantage to front businesses is that they generally must pay taxes on the illicit income
Answer: C
Explanation:
This question tests your knowledge of Domain 1.
In the context of Overview of the Legal System, specifically relating to criminal, the question asks about LEAST ACCURATE, front businesses as a method of laundering money is the LEAST ACCURATE.
The correct answer is A: A red flag of a front business is the observation of a large number of customers during peak operating hours.
This question relates to the legal system framework. Understanding the distinction between different legal systems and processes is crucial for fraud examiners. The correct answer accurately describes the relationship between different legal entities and their jurisdictions.
References:
- CFE Exam Content Outline: Domain 1: Overview of the Legal System
- criminal
- Fraud Examiners Manual, Law Section
NEW QUESTION # 122
Which of the following is a method of disguising money acquired from illegal sources by recording more income on a business's books than the business actually generates?
- A. Overstating revenues
- B. None of the above
- C. Reporting real estate purchases
- D. Recording but not depositing revenue
Answer: A
Explanation:
This question tests your knowledge of Uncategorized.
the question asks about the core concepts in this area.
The correct answer is A: Overstating revenues.
This question tests your understanding of key fraud examination concepts and legal principles.
NEW QUESTION # 123
Smith, a Certified Fraud Examiner (CFE). works for the ABC Company, a private entity that operates w\ a jurisdiction with civil laws for defamation, invasion of privacy. and conflict of interest Smith seizes and searches the personal smartphone of Green an employee of ABC even though Green was not suspected of any wrongdong Assuming that Green had a reasonable expectation of privacy in the smartphone and Smith conducted the search without a legitmate interest or authority, under which of the following claims would Green MOST LIKELY be able to recover damages against Smith?
- A. Public disclosure of private facts
- B. Slander
- C. Conflict of interest
- D. Intrusion into Green's private matters
Answer: D
NEW QUESTION # 124
Which of the following is the MOST ACCURATE statement about rules prohibiting securities broker-dealers from making unsuitable recommendations on investments or investment strategies?
- A. A suitability violation occurs when a broker recommends an investment or investment strategy that is inconsistent with the client's objectives
- B. A suitability violation occurs when a broker trades in a client's account without obtaining prior approval for making the transaction(s).
- C. A suitability violation occurs when a broker enters into transactions and manages a client's account for the purpose of generating excessive commissions
- D. A suitability violation occurs when a broker does not carry out a trade requested by or promised to a customer
Answer: C
NEW QUESTION # 125
Which of the following statements concerning alternative remittance systems is INCORRECT?
- A. The ledgers used typically contain information regarding payers and payees, such as names and account numbers.
- B. The systems are characterized by a lack of physical or digital transfer of currency between payers and payees.
- C. The systems are not necessarily illegal.
- D. Funds are sent and received without the use of traditional financial institutions.
Answer: C
Explanation:
This question tests your knowledge of Uncategorized.
the question asks about alternative remittance systems is INCORRECT, INCORRECT.
The correct answer is A: The systems are not necessarily illegal..
This question tests your understanding of key fraud examination concepts and legal principles.
NEW QUESTION # 126
Which of the following typically does NOT have to be present for communications between an attorney and the attorney's client to be protected by a legal professional privilege?
- A. Purpose of the communications was to seek or provide legal advice
- B. Intent to keep the communications confidential
- C. A lawsuit has been filed
- D. Communication between a legal advisor and a client
Answer: C
Explanation:
This question tests your knowledge of Domain 10.
In the context of Basic Principles of Evidence, specifically relating to privilege, the question asks about NOT.
The correct answer is B: A lawsuit has been filed.
This question tests knowledge of evidence principles. The correct answer correctly distinguishes between types of evidence, admissibility requirements, or evidentiary privileges. Proper handling of evidence is crucial for successful fraud investigations and prosecutions.
NEW QUESTION # 127
Which of the following is NOT an element that is generally required to establish a claim alleging the common law civil wrong for intentional infliction of emotional distress?
- A. The defendant acted intentionally or recklessly.
- B. The victim's distress occurred for at least two years.
- C. The defendant engaged in extreme and outrageous conduct.
- D. The victim suffered distress due to the defendant's conduct.
Answer: B
Explanation:
This question tests your knowledge of Domain 1.
In the context of Overview of the Legal System, specifically relating to civil, common law, the question asks about NOT.
The correct answer is B: The victim's distress occurred for at least two years..
This question relates to the legal system framework. Understanding the distinction between different legal systems and processes is crucial for fraud examiners. The correct answer accurately describes the relationship between different legal entities and their jurisdictions.
NEW QUESTION # 128
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Ace ACFE CFE-Law Certification with Actual Questions Aug 28, 2026 Updated: https://www.vcetorrent.com/CFE-Law-valid-vce-torrent.html
Certified Fraud Examiner Certified Official Practice Test CFE-Law: https://drive.google.com/open?id=1HIBhb6zZyCD-HFh6pKAhIHP-G528M2j9