ACFE CFE Certifications CFE-LAW Questions & Answers

• Question 1:

  Countries A and B both follow the Financial Action Task Force (FATF) Recommendations concerning cross-border transfers of currency. Trevor is traveling from Country A to Country B while carrying $16,000 in cash, which exceeds Country B's reporting threshold. Trevor is required to disclose the amount of currency he is carrying to authorities in Country B.

  A. True

  B. False

  Correct Answer: B

• Question 2:

  Ellis works for a business that filed for bankruptcy. The administrator presiding over the bankruptcy contacts Ellis and requests information regarding his employer's financial affairs. Assuming the administrator has all of the powers recommended in the World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (World Bank Principles), which of the following is TRUE?

  A. The administrator has no power to obtain the information under any circumstances.

  B. The administrator may not obtain the information unless the business agrees in writing.

  C. The administrator may only seek information regarding the business that filed bankruptcy if Ellis consents to providing it.

  D. The administrator may compel Ellis to provide the information, despite Ellis's relationship to the business.

  Correct Answer: C

• Question 3:

  In a particular country's judicial process, the judge oversees the investigation of a case, is primarily

  responsible for questioning witnesses, and generally plays a larger role in the evidence-gathering process

  than the parties' legal counsel.

  Which of the following best describes this type of judicial process?

  A. Substantive law process

  B. Common law process

  C. Inquisitorial process

  D. Adversarial process

  Correct Answer: C

• Question 4:

  In common law jurisdictions, failing to suspend routine destruction of electronic data can result in sanctions for failure to preserve relevant evidence.

  A. True

  B. False

  Correct Answer: A

• Question 5:

  To determine if a misrepresentation in the offer or sale of any securities is material, a fraud examiner should answer which of the following questions?

  A. "Did the person who made the representation intend to mislead potential investors?"

  B. "Was the misrepresentation made by an authorized individual?"

  C. "Did the person who made the representation believe that it was suitable for potential investors?"

  D. "Would a reasonable investor wish to know the information to make an informed decision?"

  Correct Answer: D

• Question 6:

  Jackson believes he has a legal cause of action against Alice, who lives in a foreign country. The fact that Jackson is the plaintiff allows him to bring the lawsuit against Alice in any court in the country where he lives.

  A. True

  B. False

  Correct Answer: B

• Question 7:

  Which of the following is TRUE in regard to authenticating evidence in most common law systems?

  A. Digital records cannot be authenticated by testimony from a witness with personal knowledge.

  B. For evidence to be authenticated, it must be reviewed and voted on by a jury.

  C. The purpose of authentication is to ensure that hearsay is not admitted into evidence.

  D. Exhibits that cannot be authenticated will not be admitted, regardless of relevance.

  Correct Answer: B

• Question 8:

  The same customer comes into a casino each day and deposits a large amount of cash into an account, but, after very little gambling, the customer withdraws the funds. The casino employees suspect that the customer may be engaged in money laundering activity. Assuming that the anti-money laundering (AML) regulations that govern the casino's activities correspond to the Financial Action Task Force (FATF) Recommendations, the casino:

  A. May, but is not required to, file a report of suspicious transactions related to possible money laundering with appropriate authorities

  B. May not file a report of suspicious transactions related to potential criminal activity with appropriate authorities

  C. Is required to file a cash transaction report for possible criminal activity with appropriate authorities because cash was involved

  D. Is required to file a report of suspicious transactions with appropriate authorities because the

  employees suspect money laundering violations

  Correct Answer: A

• Question 9:

  The MAIN purpose for maintaining the chain of custody on an item of evidence is to:

  A. Prevent opposing parties from accessing evidence without a court order.

  B. Verify that the item of evidence has only been handled by court officials prior to its production in court.

  C. Eliminate the need to authenticate the item of evidence in court.

  D. Establish that the evidence has not been altered or changed from the time it was collected through its production in court.

  Correct Answer: D

• Question 10:

  Which of the following statements concerning alternative remittance systems is INCORRECT?

  A. Funds are sent and received without the use of traditional financial institutions.

  B. The systems are not necessarily illegal.

  C. The ledgers used typically contain information regarding payers and payees, such as names and account numbers.

  D. The systems are characterized by a lack of physical or digital transfer of currency between payers and payees.

  Correct Answer: D