ACFE CFE - Law (Certified Fraud Examiner - Law) Practice Test 2

Question 10

A deceived investor seeks compensation from the person who misled her. Which branch of liability is invoked?

  1. Criminal liability
  2. Administrative enforcement
  3. Internal disciplinary action
  4. Civil liability

Explanation

Correct Answer

D:

Private civil claims ordinarily seek remedies for legal injury, with an applicable civil proof standard and available damages or equitable relief.

Incorrect Answers

A:

Criminal proceedings enforce public prohibitions and may impose punishment after the prosecution proves the offense beyond a reasonable doubt; civil liability is the issue raised by the described conduct.

B:

An authorized regulator may impose professional or regulatory consequences under statutory procedures without seeking a criminal conviction; the inquiry instead concerns Civil liability, with its own elements.

C:

Employer discipline arises from workplace policy and employment law; it does not itself establish civil damages or a criminal offense; the relevant step in this scenario is Civil liability.

Question 11

A professional regulator proposes to suspend a license after a misconduct hearing. What type of proceeding is this?

  1. Criminal liability
  2. Civil liability
  3. Beyond a reasonable doubt
  4. Internal disciplinary action
  5. Administrative enforcement

Explanation

Correct Answer

E:

An authorized regulator may impose professional or regulatory consequences under statutory procedures without seeking a criminal conviction.

Incorrect Answers

A:

Criminal proceedings enforce public prohibitions and may impose punishment after the prosecution proves the offense beyond a reasonable doubt; those prerequisites should not be confused with Administrative enforcement.

B:

Private civil claims ordinarily seek remedies for legal injury, with an applicable civil proof standard and available damages or equitable relief; administrative enforcement addresses the distinct legal requirement stated in the facts.

C:

The government bears the burden of establishing every charged criminal element to the high standard required for conviction; administrative enforcement raises a different threshold from this alternative.

D:

Employer discipline arises from workplace policy and employment law; it does not itself establish civil damages or a criminal offense; that concept must be distinguished from Administrative enforcement here.

Question 12

A corporation evaluates whether to dismiss an employee for violating its ethics code independent of a criminal case. What category of response is it?

  1. Civil liability
  2. Administrative enforcement
  3. Criminal liability
  4. Internal disciplinary action
  5. Beyond a reasonable doubt

Explanation

Correct Answer

D:

Employer discipline arises from workplace policy and employment law; it does not itself establish civil damages or a criminal offense.

Incorrect Answers

A:

Private civil claims ordinarily seek remedies for legal injury, with an applicable civil proof standard and available damages or equitable relief; the circumstances point to Internal disciplinary action rather than that separate test.

B:

An authorized regulator may impose professional or regulatory consequences under statutory procedures without seeking a criminal conviction; internal disciplinary action is the issue raised by the described conduct.

C:

Criminal proceedings enforce public prohibitions and may impose punishment after the prosecution proves the offense beyond a reasonable doubt; the inquiry instead concerns Internal disciplinary action, with its own elements.

E:

The government bears the burden of establishing every charged criminal element to the high standard required for conviction; the relevant step in this scenario is Internal disciplinary action.

Question 13

A prosecutor must prove the charged fraud offense to the demanding trial standard. Which standard applies in a U.S. criminal case?

  1. Preponderance of the evidence
  2. Beyond a reasonable doubt
  3. Probable cause
  4. Reasonable suspicion

Explanation

Correct Answer

B:

The government bears the burden of establishing every charged criminal element to the high standard required for conviction.

Incorrect Answers

A:

The civil claimant typically must show the proposition is more likely true than not, subject to any heightened requirement for the particular claim; here the operative distinction is Beyond a reasonable doubt.

C:

Probable cause concerns a reasonable factual basis for a specified legal step and is not the ultimate level of proof needed to convict; those prerequisites should not be confused with Beyond a reasonable doubt.

D:

Reasonable suspicion is a lower, contextual standard for certain brief investigative steps; it cannot be substituted for trial proof; beyond a reasonable doubt addresses the distinct legal requirement stated in the facts.

Question 14

A claimant seeks damages for deceit in an ordinary U.S. civil case. Which general trial standard applies absent a special statute?

  1. Preponderance of the evidence
  2. Probable cause
  3. Beyond a reasonable doubt
  4. Reasonable suspicion

Explanation

Correct Answer

A:

The civil claimant typically must show the proposition is more likely true than not, subject to any heightened requirement for the particular claim.

Incorrect Answers

B:

Probable cause concerns a reasonable factual basis for a specified legal step and is not the ultimate level of proof needed to convict; that concept must be distinguished from Preponderance of the evidence here.

C:

The government bears the burden of establishing every charged criminal element to the high standard required for conviction; the circumstances point to Preponderance of the evidence rather than that separate test.

D:

Reasonable suspicion is a lower, contextual standard for certain brief investigative steps; it cannot be substituted for trial proof; preponderance of the evidence is the issue raised by the described conduct.

Question 15

An ethics board investigates whether probable cause supports initiating formal proceedings. Which threshold is it assessing?

  1. Probable cause
  2. Reasonable suspicion
  3. Preponderance of the evidence
  4. Beyond a reasonable doubt

Explanation

Correct Answer

A:

Probable cause concerns a reasonable factual basis for a specified legal step and is not the ultimate level of proof needed to convict.

Incorrect Answers

B:

Reasonable suspicion is a lower, contextual standard for certain brief investigative steps; it cannot be substituted for trial proof; the relevant step in this scenario is Probable cause.

C:

The civil claimant typically must show the proposition is more likely true than not, subject to any heightened requirement for the particular claim; here the operative distinction is Probable cause.

D:

The government bears the burden of establishing every charged criminal element to the high standard required for conviction; those prerequisites should not be confused with Probable cause.

Question 16

An investigator decides whether specific, articulable facts warrant an initial temporary investigative stop by police. Which U.S. threshold is relevant?

  1. Substantial-evidence review of agency findings
  2. Beyond a reasonable doubt
  3. Probable cause
  4. Reasonable suspicion

Explanation

Correct Answer

D:

Reasonable suspicion is a lower, contextual standard for certain brief investigative steps; it cannot be substituted for trial proof.

Incorrect Answers

A:

Substantial-evidence review is a deferential judicial test for agency fact findings on an administrative record, not the field threshold for a brief police stop based on specific observed facts.

B:

The government bears the burden of establishing every charged criminal element to the high standard required for conviction; that concept must be distinguished from Reasonable suspicion here.

C:

Probable cause concerns a reasonable factual basis for a specified legal step and is not the ultimate level of proof needed to convict; the circumstances point to Reasonable suspicion rather than that separate test.

Question 17

A defendant invokes a contractual clause requiring a neutral third party to issue a binding private decision. Which dispute process is contemplated?

  1. Arbitration
  2. Mediation
  3. Civil litigation
  4. Prescriptive jurisdiction
  5. Negotiated settlement

Explanation

Correct Answer

A:

Arbitration submits disputes to a neutral adjudicator outside ordinary court trial, with enforceability and review governed by the agreement and law.

Incorrect Answers

B:

A mediator assists agreement but ordinarily does not decide the merits or compel settlement in the way an adjudicator can; the inquiry instead concerns Arbitration, with its own elements.

C:

Litigation asks a court to adjudicate legal rights through pleadings, evidence, judgment and possible appeals; the relevant step in this scenario is Arbitration.

D:

Prescriptive jurisdiction concerns whether a sovereign's law lawfully reaches the conduct, a question distinct from a court's practical ability to enforce abroad; here the operative distinction is Arbitration.

E:

A settlement reflects agreed terms that resolve claims, subject to validity and approval requirements where applicable; those prerequisites should not be confused with Arbitration.

Question 18

After a supplier alleges overbilling, both sides appoint an independent facilitator who manages settlement discussions but cannot impose an award. They want to retain control of whether any compromise becomes binding. Which dispute-resolution method have they chosen?

  1. Civil litigation
  2. Negotiated settlement
  3. Arbitration
  4. Mediation

Explanation

Correct Answer

D:

A mediator assists agreement but ordinarily does not decide the merits or compel settlement in the way an adjudicator can.

Incorrect Answers

A:

Litigation asks a court to adjudicate legal rights through pleadings, evidence, judgment and possible appeals; mediation addresses the distinct legal requirement stated in the facts.

B:

A settlement reflects agreed terms that resolve claims, subject to validity and approval requirements where applicable; mediation raises a different threshold from this alternative.

C:

Arbitration submits disputes to a neutral adjudicator outside ordinary court trial, with enforceability and review governed by the agreement and law; that concept must be distinguished from Mediation here.

Question 19

A company offers a payment agreement to resolve civil claims without a hearing. Which mechanism is being used?

  1. Mediation
  2. Civil litigation
  3. Negotiated settlement
  4. Prescriptive jurisdiction
  5. Arbitration

Explanation

Correct Answer

C:

A settlement reflects agreed terms that resolve claims, subject to validity and approval requirements where applicable.

Incorrect Answers

A:

A mediator assists agreement but ordinarily does not decide the merits or compel settlement in the way an adjudicator can; negotiated settlement is the issue raised by the described conduct.

B:

Litigation asks a court to adjudicate legal rights through pleadings, evidence, judgment and possible appeals; the inquiry instead concerns Negotiated settlement, with its own elements.

D:

Prescriptive jurisdiction concerns whether a sovereign's law lawfully reaches the conduct, a question distinct from a court's practical ability to enforce abroad; the relevant step in this scenario is Negotiated settlement.

E:

Arbitration submits disputes to a neutral adjudicator outside ordinary court trial, with enforceability and review governed by the agreement and law; here the operative distinction is Negotiated settlement.

Question 20

Business parties agree to present an existing controversy directly to a court for judgment rather than use a private process. Which mechanism is involved?

  1. Civil litigation
  2. Mediation
  3. Arbitration
  4. Negotiated settlement

Explanation

Correct Answer

A:

Litigation asks a court to adjudicate legal rights through pleadings, evidence, judgment and possible appeals.

Incorrect Answers

B:

A mediator assists agreement but ordinarily does not decide the merits or compel settlement in the way an adjudicator can; those prerequisites should not be confused with Civil litigation.

C:

Arbitration submits disputes to a neutral adjudicator outside ordinary court trial, with enforceability and review governed by the agreement and law; civil litigation addresses the distinct legal requirement stated in the facts.

D:

A settlement reflects agreed terms that resolve claims, subject to validity and approval requirements where applicable; civil litigation raises a different threshold from this alternative.

Certified Fraud Examiner - Law (CFE - Law) Practice Tests