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Cheat sheet

CFE Certified Fraud Examiner Cheat Sheet

Practice QuestionsStudy Guide

Fraud Schemes + Financial Crimes

39%of exam

Fraud TreeAsset MisappropriationCorruptionFinancial Statement FraudRed Flags + RatiosMoney Laundering

Fraud Investigations + Legal Issues

39%of exam

Evidence + Chain of CustodyInterviewingTracing + Hidden AssetsDigital + Document ForensicsFraud Law + StatutesEvidence Law + Rights

Fraud Prevention + Deterrence

22%of exam

Fraud Triangle + TheoryCOSO + Internal ControlsGovernance + EthicsDetection MethodsDeterrenceCode of Ethics

Quick Facts

Exam
CFE
Credential
Certified Fraud Examiner
Questions
310 total
Sections
120 + 120 + 70
Time
2.5h + 2.5h + 1.5h
Pass
75% each section
Fee
$480 application
Delivery
Prometric or remote
Blueprint
June 2 2026

Money Laundering Stages

Placement -> Layering -> Integration

Placement: cash entersLayering: obscure trailIntegration: appears clean

Skimming vs Cash Larceny

Skimming

  • Off-book theft
  • Before recording
  • No ledger trail

Cash larceny

  • On-book theft
  • After recording
  • Deposit comes up short

Before vs after books

Scheme Identifier

  1. Cash gone before recording→Skimming(Off-book)
  2. Cash gone after recording→Cash larceny(On-book)
  3. False invoice paid→Billing scheme
  4. Ghost worker paid→Payroll fraud
  5. Check altered or forged→Check tampering
  6. Revenue booked too early→Financial statement fraud
  7. Vendor pays buyer back→Kickback(Corruption)
  8. Cash split under threshold→Structuring(BSA crime)

Fraud Tree

Fraud tree
Three fraud branchesACFE
Asset misappropriation
Most common, least costly
Corruption
Bribery, conflicts
Financial statement fraud
Least common, costliest
Occupational fraud
Employee against employer
Predication
Reasonable basis to investigate

Fraud Tree Branches

Corruption | Asset Misappropriation | Financial Statement

Corruption: bribery, conflictsAsset misapp: most commonFinancial stmt: costliest

Bribery vs Illegal Gratuity

Bribery

  • Before decision
  • Quid pro quo
  • Intends to influence

Illegal gratuity

  • After the act
  • Reward for decision
  • No agreement required

Influence vs reward

Asset Misappropriation

Skimming
Off-book cash theft
Cash larceny
On-book cash theft
Billing scheme
Shell or inflated invoices
Payroll
Ghost employees
Check tampering
Forged or altered checks
Expense reimbursement
Fake or inflated claims
Register disbursement
False refunds, voids

Corruption

Bribery
Pay to influence
Kickback
Vendor secret commission
Illegal gratuity
Reward after act
Conflict of interest
Undisclosed self-interest
Economic extortion
Demand under duress
Bid rigging
Collusive procurement

Financial Statement Fraud

Revenue recognition
Book revenue early
Channel stuffing
Excess period-end shipping
Bill-and-hold
Bill before delivery
Fictitious revenue
Fake sales, customers
Timing differences
Wrong-period recording
Concealed liabilities
Hide payables, expenses
Improper disclosures
Omit material facts
Asset valuation
Overstate asset values

Red Flags + Ratios

Current ratio
Short-term liquidity
Quick ratio
Acid-test liquidity
Gross margin
Sudden spikes suspicious
Receivable turnover
Collection speed
Inventory turnover
Stock movement speed
Vertical analysis
Percent of base
Horizontal analysis
Period-to-period change

Money Laundering

Placement
Cash enters system
Layering
Obscure the trail
Integration
Funds appear legitimate
Structuring (smurfing)
Split under threshold
Trade-based
Mis-invoiced trade value
CTR
Currency transaction report$10k
SAR
Suspicious activity report
BSA
Bank Secrecy Act

5 Interview Question Types

Intro | Info | Assessment | Closing | Admission

Intro: rapportInfo: open then closedAssessment: test credibilityClosing: reconcileAdmission: confront guilty

Interview vs Interrogation

Interview

  • Non-accusatory
  • Fact-finding
  • Open questions

Interrogation

  • Accusatory
  • Admission-seeking
  • After evidence gathered

Gather vs confront

Investigation Method Picker

  1. Prove hidden income→Net worth method
  2. Unknown income source→Bank deposits method
  3. Test digit patterns→Benford's Law
  4. Seized a computer→Forensic image(Hash it)
  5. Confirm facts, non-accusatory→Interview
  6. Guilt already established→Admission-seeking interview
  7. Check document authenticity→Document exam
  8. Move evidence to court→Chain of custody

Evidence + Chain of Custody

Chain of custody
Unbroken handling trail
Direct evidence
Proves fact directly
Circumstantial
Inference required
Documentary
Records and papers
Testimonial
Witness statements
Spoliation
Destroying evidence

Criminal vs Civil

Criminal

  • State prosecutes
  • Beyond reasonable doubt
  • Fines or prison

Civil

  • Victim sues
  • Preponderance of evidence
  • Monetary recovery

Punish vs recover

Interviewing

Interview
Non-accusatory fact-finding
Interrogation
Accusatory, admission-seeking
Introductory
Establish rapport
Informational
Open then closed
Assessment
Test credibility
Closing
Confirm, reconcile
Admission-seeking
Confront guilty subject

Direct vs Circumstantial

Direct

  • Proves fact directly
  • Eyewitness account
  • No inference needed

Circumstantial

  • Requires inference
  • Indirect proof
  • Can still convict

Direct vs inferred

Tracing + Hidden Assets

Net worth method
Assets minus liabilities
Asset method
Track asset growth
Expenditures method
Spending versus income
Bank deposits method
Deposits versus income
Direct method
Specific transactions
Lifestyle analysis
Spending exceeds income

Digital + Document Forensics

Forensic image
Bit-for-bit copy
Hash value
Prove integrity
Write blocker
Prevent alteration
Metadata
Data about data
Benford's Law
Digit frequency test
Preserve originals
Analyze copies only

Fraud Law + Statutes

Fraud elements
Misrep, intent, reliance, damage
Mail fraud
18 USC 1341
Wire fraud
18 USC 1343
RICO
Pattern of racketeering
SOX 404
Internal control report
FCPA
Foreign bribery ban
Money laundering
18 USC 1956

Evidence Law + Rights

Hearsay
Out-of-court, for truth
Business records
Hearsay exception
Attorney-client
Privileged legal advice
Work product
Litigation materials protected
Miranda
Custody plus interrogation
Fourth Amendment
Government search limits

Fraud Triangle

Pressure + Opportunity + Rationalization

Pressure: motive or needOpportunity: control gapRationalization: self-justificationDiamond adds: capability

Preventive vs Detective

Preventive

  • Stops before occurrence
  • Segregation of duties
  • Authorization limits

Detective

  • Finds after occurrence
  • Reconciliations
  • Audits and reviews

Before vs after

Control + Prevention Picker

  1. Stop fraud beforehand→Preventive control
  2. Catch fraud afterward→Detective control
  3. One person controls process→Segregate duties
  4. No fear of detection→Increase deterrence
  5. Need anonymous tips→Whistleblower hotline
  6. Set ethical example→Tone at the top
  7. Prioritize fraud exposures→Fraud risk assessment

Fraud Triangle + Theory

Pressure
Motive or need
Opportunity
Control gap
Rationalization
Self-justification
Fraud diamond
Adds capability
Cressey
Fraud triangle origin
Tone at the top
Leadership ethics example

COSO 5 Components

Environment | Risk | Activities | Info | Monitoring

CE: tone at topRA: identify risksCA: proceduresIC: reportingM: ongoing checks

Fraud Triangle vs Diamond

Triangle

  • Three elements
  • Cressey's theory
  • Pressure, opportunity, rationalization

Diamond

  • Four elements
  • Adds capability
  • Skill to exploit

Three vs four

COSO + Internal Controls

Control environment
Tone and integrity
Risk assessment
Identify fraud risks
Control activities
Policies and procedures
Information + communication
Reporting flows
Monitoring
Ongoing evaluation
Segregation of duties
Split key functions
Preventive vs detective
Stop versus find

Governance + Ethics

Audit committee
Independent board oversight
Whistleblower hotline
Confidential reporting channel
ACFE Code of Ethics
Member conduct rules
No opinion of guilt
Court decides guilt
Fraud risk assessment
Map schemes to controls
Report to the Nations
ACFE fraud study

Common Traps

Skimming vs Larceny

Skimming = off-book ≠ Larceny = on-book

Bribery vs Gratuity

Bribery = before act ≠ Gratuity = after act

Interview vs Interrogation

Interview = fact-finding ≠ Interrogation = admission-seeking

Who decides guilt

Examiner reports evidence ≠ Court decides guilt

Common vs Costly

Asset misapp = frequent ≠ Financial statement = costliest

Miranda scope

Private examiner exempt ≠ Law enforcement bound

Fraud vs Abuse

Fraud = intentional deception ≠ Abuse = misuse, legal

Last Minute

  1. 1.Weights: 39, 39, 22 percent
  2. 2.Pass 75 percent each section
  3. 3.310 questions, three sections
  4. 4.Skimming off-book; larceny on-book
  5. 5.Bribery before; gratuity after act
  6. 6.Interview finds facts; interrogation confronts
  7. 7.Triangle: pressure, opportunity, rationalization
  8. 8.Laundering: placement, layering, integration
  9. 9.COSO has five components
  10. 10.Examiner never opines on guilt
  11. 11.Net worth finds hidden income
  12. 12.Chain of custody stays unbroken

CFE

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