FA-CERT Fraud Analytics Certificate Program Practice Questions
Prepare for FA-CERT with more than an answer.
- Exam fee
- $473 USD
- Level
- Certificate
- Valid for
- Lifetime (does not expire)
Domains covered on the exam 3
- Data Analysis Techniques for Fraud Examiners40%
- Textual Analytics20%
- Uncovering Fraud with Advanced Financial and Ratio Analysis40%
- 1
A fraud examiner is reviewing a dataset of employee expense reimbursements. Company policy requires receipts for any expense over $50.00. The examiner runs a query to identify employees who have a disproportionately high number of expenses submitted for amounts between $45.00 and $49.99. What specific behavior is the examiner attempting to detect?
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Correct answer: B
Fraudsters often submit fictitious expenses just below the threshold that requires documentation (in this case, $50). By submitting multiple claims just under the limit (e.g., $49.50), they evade the control requiring receipts. Data analytics easily highlights these artificial clustering patterns.
- 2
When applying analytical procedures to detect financial statement fraud, an examiner converts all items on the balance sheet to a percentage of total assets, and all items on the income statement to a percentage of net sales. This allows for easier comparison across different financial periods. Which data analysis technique is the examiner utilizing?
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Correct answer: B
Vertical analysis, also known as common-size financial statements, involves expressing each item in a financial statement as a percentage of a base amount (total assets for the balance sheet, net sales for the income statement). This helps identify disproportionate changes in accounts that may indicate financial statement fraud.
- 3
A fraud examiner is tasked with identifying potential bid-rigging and corruption schemes within the procurement department. Which of the following data analytics routines would be MOST helpful in identifying a potential conflict of interest or kickback scheme? (Select TWO)
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Correct answer: A, C
In corruption and bid-rigging schemes, a corrupt employee may provide an inside vendor with the competing bid amounts, allowing that vendor to submit the final, lowest bid just before the deadline. Analyzing bid submission timelines and success rates can reveal this anomaly. Additionally, analyzing the ratio of contract wins to total bids can highlight vendors receiving preferential treatment.
In corruption and bid-rigging schemes, a corrupt employee may provide an inside vendor with the competing bid amounts, allowing that vendor to submit the final, lowest bid just before the deadline. Analyzing bid submission timelines and success rates can reveal this anomaly. Additionally, analyzing the ratio of contract wins to total bids can highlight vendors receiving preferential treatment.
- 4
During a fraud investigation at a logistics company, an examiner is tasked with utilizing data analytics to identify potential anomalies in the accounts payable system. The examiner is currently establishing the scope of the analysis, identifying the required data sources, and building initial hypotheses about how a billing scheme might be perpetrated within the organization's specific control environment. In which phase of the data analysis process is the examiner currently operating?
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Correct answer: C
The Planning Phase of the data analysis process involves defining the objectives and scope of the analysis, understanding the business context, identifying relevant data sources, and developing hypotheses about potential fraud. The Preparation Phase involves data extraction and cleaning, while Testing involves the actual execution of analytical routines.
- 5
A fraud examiner is considering using Benford's Law to detect potential anomalies in a dataset. Which of the following datasets would be the MOST appropriate candidate for a reliable Benford's Law analysis?
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Correct answer: B
Benford's Law applies most accurately to naturally occurring sets of numbers that span multiple orders of magnitude and are not artificially constrained. Accounts payable disbursements fit this profile perfectly. Assigned numbers (like SSNs or sequential invoice numbers) and constrained numbers (like per diem rates) do not conform to Benford's Law.
- 6
A financial institution is implementing a continuous monitoring program using advanced data analytics. Which of the following represents a primary advantage of this approach compared to traditional audit sampling methods? (Select TWO)
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Correct answer: B, D
Two primary advantages of data analytics and continuous monitoring are the ability to test 100% of the population (eliminating sampling risk) and the capability to detect anomalies in real-time or near-real-time. It does not eliminate false positives, nor does it replace the need for professional judgment.
Two primary advantages of data analytics and continuous monitoring are the ability to test 100% of the population (eliminating sampling risk) and the capability to detect anomalies in real-time or near-real-time. It does not eliminate false positives, nor does it replace the need for professional judgment.
