Use Real CFE-Law - 100% Cover Real Exam Questions [May-2026]
Dumps Brief Outline Of The CFE-Law Exam - ActualPDF
NEW QUESTION # 39
Which of the following, if available, would help an organization recover losses from an instance of internal fraud?
- A. Privilege insurance
- B. Customer liability policy
- C. Deposition
- D. Fidelity insurance
Answer: D
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 the core concepts in this area.
The correct answer is C: Fidelity insurance.
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.
References:
- CFE Exam Content Outline: Domain 10: Basic Principles of Evidence
- privilege
- Fraud Examiners Manual, Law Section
NEW QUESTION # 40
Which of the following is generally one of the goals of deferred prosecution agreements?
- A. To postpone prosecution until a company conducts an adequate internal investigation
- B. To allow prosecutors to resolve a corporate case while still punishing misconduct
- C. To increase the likelihood of conviction if a company is accused of subsequent misconduct
- D. To save trial resources by getting the defendant to plead guilty to a less serious offense
Answer: B
Explanation:
The correct answer is D. The CFE Manual explains that deferred prosecution agreements generally occur when prosecutors file criminal charges against a company but agree not to proceed with prosecution if the company complies with the agreement's terms. These terms usually focus on reforming the company's policies and reducing the risk of future illegal practices. The Manual specifically states that deferred prosecution agreements give the justice system another means of resolving a corporate case while still punishing malfeasance and effecting cultural change within the company.
This is why D is the best answer. Option A is not identified as a primary goal. Option B describes something closer to plea bargaining, not a deferred prosecution agreement. Option C is also inaccurate because a DPA is not merely a pause to let the company investigate; it is a structured resolution mechanism with conditions designed to punish misconduct and encourage reform. In the CFE framework, DPAs are especially relevant in corporate fraud cases because they balance accountability, remediation, and the practical realities of prosecuting large organizations. Therefore, the most accurate statement is that DPAs are used to allow prosecutors to resolve a corporate case while still punishing misconduct.
NEW QUESTION # 41
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 victim suffered distress due to the defendant's conduct.
- B. The defendant engaged in extreme and outrageous conduct.
- C. The defendant acted intentionally or recklessly.
- D. The victim's distress occurred for at least two years.
Answer: D
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 # 42
Freya, a government contractor, has been convicted of colluding with other contractors to manipulate the competitive bidding process. After her conviction, Freya's name is added to a list of individuals who are prohibited from bidding on government contracts for a period of five years. The administrative penalty that Freya received is BEST described as:
- A. License revocation
- B. Disenfranchisement
- C. License suspension
- D. Debarment
Answer: D
Explanation:
This question tests your knowledge of Domain 1.
In the context of Overview of the Legal System, specifically relating to administrative, the question asks about BEST.
The correct answer is C: Debarment.
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
- administrative
- Fraud Examiners Manual, Law Section
NEW QUESTION # 43
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 only seek information regarding the bus ness that filed bankruptcy if Ellis consents to providing it.
- C. The administrator may compel Ellis to provide the information despite Ellis's relationship to the business
- D. The administrator may not obtain the information unless the business agrees in writing
Answer: C
Explanation:
This question tests your knowledge of Domain 3.
In the context of Bankruptcy Fraud, specifically relating to bankruptcy, administrator, the question asks about TRUE, 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.
The correct answer is C: The administrator may compel Ellis to provide the information despite Ellis's relationship to the business.
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.
References:
- CFE Exam Content Outline: Domain 3: Bankruptcy Fraud
- bankruptcy
- administrator
- Fraud Examiners Manual, Law Section
NEW QUESTION # 44
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. The alleged conflict must have resulted in a direct personal benefit for Marcia.
- B. Marcia must have failed to disclose that she had a personal or economic interest in a matter that could influence her professional role.
- C. The alleged conflict must have resulted in a financial loss for the organization.
- D. Marcia must have informed the organization that she had a connection to one or more of the vendors with whom she was negotiating.
Answer: B
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.
References:
- CFE Exam Content Outline: Domain 7: Individual Rights During Examinations
- employee
- Fraud Examiners Manual, Law Section
NEW QUESTION # 45
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
Answer: A
Explanation:
This question tests your knowledge of Domain 5.
In the context of Money Laundering, specifically relating to FATF, the question asks about FATF, 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.
The correct answer is A: True.
This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.
NEW QUESTION # 46
Which of the following is NOT one of the elements that the government must prove to establish a violation of a law criminalizing false statements to government agencies?
- A. The false statement was material
- B. The government relied on the false statement
- C. The defendant made a false statement
- D. The defendant knew the statement was false
Answer: B
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 NOT.
The correct answer is A: The government relied on the false statement.
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 # 47
Which of the following examples of judicial systems would BEST be described as a civil law system?
- A. The courts are bound by codified principles or statures but are not bound by previous court decisions
- B. The courts are bound primarily by previous court decisions to reserve legal issues
- C. The courts are allowed to consider both codified statutes and previous court decisions but are bound by neither
- D. The courts are bound by both previous court decisions and codified principles or statutes
Answer: A
NEW QUESTION # 48
In jurisdictions that allow for corporate criminal liability which of the following is typically required for the corporation to be vicariously liable for the acts of one of its employees?
- A. Management knew of the underlying offense but did not correct it
- B. Management was directly involved with the offense
- C. The corporation had previous violations of a similar nature
- D. The employee was acting within the scope of their employment
Answer: D
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 the core concepts in this area.
The correct answer is D: The employee was acting within the scope of their employment.
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 # 49
The Financial Action Task Force (FATF) Recommendations advise countries to do all of the following EXCEPT:
- A. Enable authorities to trace freeze, and confiscate assets suspected in money laundering and terrorist financing
- B. Use a risk-based approach when setting anti-money laundering policies
- C. Require financial institutions to monitor their customers' political affiliations.
- D. Require financial institutions to keep certain records and establish anti-money laundering policies.
Answer: C
Explanation:
This question tests your knowledge of Domain 5.
In the context of Money Laundering, specifically relating to money laundering, anti-money laundering, FATF, the question asks about EXCEPT, FATF.
The correct answer is C: Require financial institutions to monitor their customers' political affiliations..
This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.
NEW QUESTION # 50
Country A's government requires financial institutions to report all instances of a customer depositing or withdrawing more than $10,000 in a day. To avoid attention regarding his illicit assets, James deposits $9,000 each day. In which of the following schemes is James engaging?
- A. Integration scheme
- B. Structuring scheme
- C. Reverse deposit scheme
- D. Mobile payment scheme
Answer: B
Explanation:
This question tests your knowledge of Uncategorized.
the question asks about his illicit assets, James deposits $9,000 each day.
The correct answer is D: Structuring scheme.
This question tests your understanding of key fraud examination concepts and legal principles.
NEW QUESTION # 51
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. Conflict of interest
- B. Intrusion into Green's private matters
- C. Slander
- D. Public disclosure of private facts
Answer: B
NEW QUESTION # 52
Which of the following is NOT one of the elements that the government must prove to establish a violation of a law criminalizing false statements to government agencies?
- A. The false statement was material
- B. The government relied on the false statement
- C. The defendant made a false statement
- D. The defendant knew the statement was false
Answer: B
NEW QUESTION # 53
All of the following are common legal defenses for tax evasion EXCEPT:
- A. Death of the taxpayer
- B. The actions were tax avoidance not tax evasion
- C. Mental illness of the taxpayer
- D. The taxpayer s reliance on an attorney or accountant
Answer: A
NEW QUESTION # 54
Consents to searches by government agents that are obtained by force, duress, or bribery are NOT effective under the law and do NOT eliminate the need for a search warrant.
- A. True
- B. False
Answer: A
Explanation:
This question tests your knowledge of Domain 2.
In the context of The Law Related to Fraud, specifically relating to bribery, the question asks about NOT.
The correct answer is A: True.
This question addresses fraud-related laws. The correct answer identifies the proper legal concept or violation that applies in the described scenario. Fraud examiners must understand these legal principles to properly identify and address fraudulent activities.
NEW QUESTION # 55
According to the best practices regarding large cash transactions with customers as provided by the Financial Action Task Force (FATF) Recommendations, which of the following transactions would require a report to be filed with the government?
- A. A domestic cash deposit into a bank of a sum that is below the jurisdiction's designated threshold.
- B. All of the above.
- C. A single cash purchase of casino credits for a sum that is above the jurisdiction's designated threshold.
- D. A single cash purchase of restaurant supplies for a sum that is above the jurisdiction's designated threshold.
Answer: C
Explanation:
This question tests your knowledge of Domain 5.
In the context of Money Laundering, specifically relating to FATF, the question asks about large cash transactions with customers as provided by the Financial Action Task Force (FATF) Recommendations, which of the following transactions would require a report to be filed with the government, FATF.
The correct answer is C: A single cash purchase of casino credits for a sum that is above the jurisdiction's designated threshold..
This question addresses money laundering concepts. The correct answer correctly identifies the stage, method, or regulatory framework related to money laundering or anti-money laundering efforts. Understanding these processes is critical for fraud examiners working to detect and prevent financial crimes.
NEW QUESTION # 56
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