Free ACFE Certified Fraud Examiner - Investigation Exam CFE-Investigation Exam Questions

Both the Manual and CFE Prep guides emphasize that forensic imaging is essential because:

''Forensic analysis should not be performed on suspect devices directly because doing so can alter or damage digital evidence, and imaging... allows a fraud examiner to view and analyse... without altering the original data in any way''.

A forensic image is an exact, sector-by-sector copy of the drive. Thus, imaging preserves evidence integrity.

The Fraud Examiners Manual notes that predictive modeling and data analysis allow fraud examiners to detect fraud by using historical data to forecast future trends and anomalies. This matches option B.

The recommended questioning order is:

''As a general rule, questioning should proceed from the general to the specific; that is, it is best to seek general information before seeking details''.

This ensures the respondent provides a free narrative before narrowing down to specifics.

The 2014 International Fraud Examiners Manual explains:

''Often, the most important evidence exists only in the form of volatile data (e.g., RAM)... If the evidence that a formally trained computer investigator needs to collect exists only in the form of volatile data stored in volatile computer memory such as RAM, and the data is expected to disappear when the computer is shut down, he should collect the data live from the suspect computer.''

Also,

''If the computer is off, leave it off... Booting up a system can alter its files... Accordingly, turning a system on could damage and taint any evidence.''

Thus, the most accurate statement is D --- live data collection may be performed directly if volatile data is required.

Textual analytics is described as:

''a method of using software to extract usable information from unstructured text data... to reveal patterns, sentiments, and relationships indicative of fraud... Textual analytics provides the ability to uncover additional warning signs of rogue employee behavior''.

Its purpose is not to find direct admissions but to identify indicators and patterns.

The Fraud Examiners Manual stresses confidentiality:

''To preserve confidentiality, investigators should avoid transmitting confidential information by email or other electronic means whenever possible, as these are susceptible to interception or unauthorized access.''

Suspending employees or blanket bans on discussion are not best practices. Confidentiality is preserved primarily by secure communication and controlled access to information.

Fraud examination reports are not written only for internal use. The 2014 International Fraud Examiners Manual clearly emphasizes:

''When drafting a report, fraud examiners must consider who might end up reading it. Fraud examiners should keep in mind that the fraud examination report will be read by the general public and adverse parties. Under no circumstances should the fraud examiner prepare a communication with the idea that the information will not be disclosed to adverse third parties. Fraud examiners should draft their reports with this caveat in mind.''

The manual further specifies the wide range of potential readers:

*''There are many individuals and groups that might end up reading a fraud examination report, including the following parties:

Company insiders (managers, board of directors, owners, investors, etc.)

Attorneys (legal counsel, prosecutors, regulators, and defense counsel)

Defendants and witnesses

Press and media outlets

Judges or juries''*

This aligns with the CFE Prep - Investigations study guide, which also confirms:

''There are many parties that might read a fraud examination report, including company insiders, attorneys, defendants and witnesses, press and media outlets, and judges or juries.''

Interpretation:

The media may access the report through litigation disclosures or leaks.

Opposing legal counsel will review the report during discovery or trial.

Investors and owners (company insiders) are primary stakeholders.

Thus, the only correct choice is D. All of the above, because fraud examination reports must be written with all possible audiences in mind, ensuring accuracy, clarity, impartiality, and professionalism to withstand scrutiny from multiple directions.

Observing signs of wealth (sports car, home remodeling) may raise suspicion, but by itself it does not provide sufficient predication to accuse or notify management of fraud. The proper next step is to conduct discreet inquiries to determine if further evidence exists before escalating.

The Fraud Examiners Manual advises avoiding prematurely alerting perpetrators. Recommended methods include:

''Conducting investigations at times when the suspect is not present (such as nonbusiness hours)''.

This avoids tipping off suspects.

''Securities regulators... require disclosures that typically include: corporate financial statements, identification of officers and directors, identification of significant owners... and a history of the business''10:2014 International Fraud Examiners Manual.pdfL73-L95.

Thus, regulatory securities records are the best source for financial statements.

CFE interviewing guidance emphasizes that legal considerations can materially affect how interviews are conducted and that employee rights and obligations vary by jurisdiction and by case. In particular, whether a subject has a duty to cooperate (and the extent to which an organization can compel cooperation) can differ across jurisdictions and can also be constrained by contractual rights (e.g., union agreements, employment contracts) and local regulations. Because June's subject is from a different jurisdiction, the most appropriate preparation step is to verify jurisdiction-specific rules that could limit compulsion or otherwise affect the interview's legal permissibility and risk profile. Option D directly addresses this core cross-jurisdiction concern: what can legally be required of the subject. Option A is not a CFE-recommended preparatory focus; examiners should adapt to legal and procedural requirements rather than ''teach'' their own cultural practices to the subject. Option B is inappropriate and contrary to professional interviewing principles (the goal is cooperation, not discomfort). Option C is incorrect because consultation with counsel is not limited to ''third jurisdiction'' scenarios; the guidance underscores that interview-related legal risks and jurisdictional differences often warrant counsel input. Therefore, D best reflects CFE investigation knowledge for cross-jurisdiction interviewing readiness.

Explanation with Extracts = The Fraud Examiners Manual explains:

''Forensic analysis should not be performed on suspect devices directly because doing so can alter or damage digital evidence, and imaging the data... allows a fraud examiner to view and analyse the contents of a computer without altering the original data in any way''.

Imaging creates an exact, sector-by-sector copy of the drive.

Thus, imaging protects original data integrity.

The 2014 International Fraud Examiners Manual provides examples of data analysis for accounts payable:

''Examples of data analysis queries that can be performed to help detect fraud through examination of accounts payable include:

* Audit paid invoices for manual comparison with actual invoices.

* Summarise large invoices by amount, vendor, etc.

* Identify debits to expense accounts outside of set default accounts.

* Reconcile cheque registers to disbursements by vendor invoice.''

While other functions apply to payroll or asset management, the most effective function for accounts payable fraud detection is to summarize large invoices by amount and vendor.

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 .

The correct answer is: Whether recording is legal depends on consent laws --- so the most helpful question is effectively: ''Is consent required from one or all parties to record this conversation?''

Among the provided choices, the closest match is NOT listed explicitly. But based on the ACFE manuals, the correct interpretation is that none of the technical details (audio/video, file format, time, duration) matter --- only the legal consent requirement matters.

Complete Detailed Explanation with Exact Extracts from Fraud Examiner (CFE) - Investigation Documents: =

The 2014 International Fraud Examiners Manual states:

''In some circumstances, recording an interview might be illegal. Some jurisdictions limit an employer's right to record employee interviews during an investigation. In fact, in some jurisdictions, audio recording an interview is permitted only with the consent of all parties to the communication. Thus, fraud examiners should always consult with an attorney when deciding whether to record an interview.''

It further emphasizes:

''A telephone recording consent form stipulates where, when, and with whom telephone conversations can be recorded... Be cautioned that the form alone does not make the conduct of recording a telephone conversation illegal or legal.''

Interpretation:

The legality of recording has nothing to do with:

Audio vs video (A)

Digital file format (B)

Work hours (C)

Duration (D)

Instead, it depends entirely on jurisdictional consent laws (one-party vs all-party consent).