AFF Practice Questions
Prepare for AFF with more than an answer.
- Exam fee
- $799 USD
- Level
- Foundational
- Valid for
- Lifetime (does not expire)
Domains covered on the exam 6
- Foundational Fraud Examination Knowledge12%
- Core Fraud Investigation Skills25%
- Fraud Schemes and Financial Analysis22%
- Fraud Prevention and Ethics16%
- Legal Framework and Evidence15%
- Investigation Communication and Information10%
- 1
Case Study Part 1: You are investigating a potential billing scheme at a manufacturing company. A new vendor, 'Apex Consulting,' has been receiving payments for 'Process Optimization Services.' You notice that Apex's invoices are generated using a basic Excel template, have no phone number, and list a residential address that matches the home address of the company's Operations Manager. What type of billing scheme is most likely occurring?
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Correct answer: D
A shell company scheme involves an employee setting up a fictitious entity (Apex Consulting) to bill their employer for non-existent goods or services. The matching address and unprofessional invoices are classic red flags.
- 2
Case Study Part 2: Continuing the investigation into 'Apex Consulting,' you compare the vendor master file with the employee database. Beyond the address match, which additional red flag would provide the strongest evidence that the Operations Manager is controlling this shell company?
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Correct answer: B
In shell company schemes, the perpetrator is almost always the one approving the invoices to ensure the fraud goes undetected. Sole approval authority for a suspicious vendor is a critical red flag.
- 3
A vendor pays a purchasing agent a percentage of every contract awarded to them. The purchasing agent ensures the vendor wins the bid by sharing competitor pricing. This arrangement is best classified as:
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Correct answer: C
Kickbacks are undisclosed payments made by vendors to employees of purchasing companies to enlist their influence in obtaining business. The percentage payment is the 'kickback.'
- 4
A fraud examiner is reviewing a case where an employee is suspected of stealing inventory. Before conducting an admission-seeking interview, the examiner must ensure there is a sufficient basis to suspect the specific individual of the fraud. What is this legal and professional standard called?
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Correct answer: B
Predication is the totality of circumstances that would lead a reasonable, professionally trained, and prudent individual to believe a fraud has occurred, is occurring, or will occur. It is the necessary basis for initiating an investigation or conducting an admission-seeking interview.
- 5
While analyzing the 'Fraud Theory Approach' during an investigation into missing petty cash, an examiner has analyzed the available data and created a hypothesis that the office manager is forging receipts. What is the immediate next step in this methodology?
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Correct answer: A
The Fraud Theory Approach follows four steps: 1) Analyze available data, 2) Create a hypothesis, 3) Test the hypothesis, and 4) Refine and amend the hypothesis. After creating the hypothesis, the examiner must test it by gathering evidence to prove or disprove it.
- 6
In the fundamental accounting equation, which component represents the owner's residual interest in the assets of the entity after deducting liabilities?
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Correct answer: A
The accounting equation is Assets = Liabilities + Equity. Equity represents the owner's claim on assets after all liabilities have been paid.
