ACFE CFE - Law (Certified Fraud Examiner - Law) Practice Test 9

Question 80

An insolvency administrator seeks to set aside an undervalue transfer by the debtor before bankruptcy. Which mechanism may apply?

  1. Avoidance of fraudulent transfer
  2. Derivative action
  3. Corporate indemnification limits
  4. Direct shareholder claim

Explanation

Correct Answer

A:

Applicable insolvency law can permit recovery of certain transfers made with fraudulent intent or for inadequate value under specified conditions.

Incorrect Answers

B:

A qualifying shareholder may sue on the corporation's behalf subject to standing and demand rules instead of simply claiming corporate loss as personal harm; the inquiry instead concerns Avoidance of fraudulent transfer, with its own elements.

C:

Corporate law and public policy may restrict advancement or indemnification for certain misconduct even if internal documents promise it; the relevant step in this scenario is Avoidance of fraudulent transfer.

D:

A direct claim seeks redress for a duty and injury owed to the investor personally, subject to statutory and pleading elements; here the operative distinction is Avoidance of fraudulent transfer.

Question 81

A nonprofit investigator plans to share a confidential witness interview with unrelated external parties. Which professional concern governs?

  1. Prima facie case
  2. No unsupported adjudication of guilt
  3. Conflict of interest
  4. Professional competence
  5. Confidentiality obligation
  6. Burden of production

Explanation

Correct Answer

E:

Private professional duties and applicable law may require restricted use and disclosure of sensitive investigation material.

Incorrect Answers

A:

A prima facie showing is sufficient at the relevant procedural stage to support an inference or shift a production obligation, not automatically to win ultimately; confidentiality obligation addresses the distinct legal requirement stated in the facts.

B:

An investigator can report supported findings and evidence but should not substitute a private determination for the competent court's legal verdict; confidentiality obligation raises a different threshold from this alternative.

C:

Representation duties require screening and management of conflicts according to the governing professional-conduct rules and consent limits; that concept must be distinguished from Confidentiality obligation here.

D:

Professionals must act within their competence or obtain qualified assistance, rather than present unsupported specialist conclusions; the circumstances point to Confidentiality obligation rather than that separate test.

F:

The burden of producing evidence concerns whether enough material has been presented to put an issue before the factfinder, distinct from ultimate persuasion; confidentiality obligation is the issue raised by the described conduct.

Question 82

A lawyer represents parties with opposing financial interests in the same dispute. Which concern must be addressed?

  1. Professional competence
  2. Confidentiality obligation
  3. No unsupported adjudication of guilt
  4. Conflict of interest

Explanation

Correct Answer

D:

Representation duties require screening and management of conflicts according to the governing professional-conduct rules and consent limits.

Incorrect Answers

A:

Professionals must act within their competence or obtain qualified assistance, rather than present unsupported specialist conclusions; conflict of interest is the issue raised by the described conduct.

B:

Private professional duties and applicable law may require restricted use and disclosure of sensitive investigation material; the inquiry instead concerns Conflict of interest, with its own elements.

C:

An investigator can report supported findings and evidence but should not substitute a private determination for the competent court's legal verdict; the relevant step in this scenario is Conflict of interest.

Question 83

A licensed professional realizes the disputed valuation needs expertise outside their competence. Which obligation matters?

  1. Professional competence
  2. Conflict of interest
  3. No unsupported adjudication of guilt
  4. Confidentiality obligation

Explanation

Correct Answer

A:

Professionals must act within their competence or obtain qualified assistance, rather than present unsupported specialist conclusions.

Incorrect Answers

B:

Representation duties require screening and management of conflicts according to the governing professional-conduct rules and consent limits; those prerequisites should not be confused with Professional competence.

C:

An investigator can report supported findings and evidence but should not substitute a private determination for the competent court's legal verdict; professional competence addresses the distinct legal requirement stated in the facts.

D:

Private professional duties and applicable law may require restricted use and disclosure of sensitive investigation material; professional competence raises a different threshold from this alternative.

Question 84

A fraud examiner wishes to say the suspect is legally guilty solely based on an internal interview. Which boundary applies?

  1. Professional competence
  2. No unsupported adjudication of guilt
  3. Confidentiality obligation
  4. Conflict of interest

Explanation

Correct Answer

B:

An investigator can report supported findings and evidence but should not substitute a private determination for the competent court's legal verdict.

Incorrect Answers

A:

Professionals must act within their competence or obtain qualified assistance, rather than present unsupported specialist conclusions; the circumstances point to No unsupported adjudication of guilt rather than that separate test.

C:

Private professional duties and applicable law may require restricted use and disclosure of sensitive investigation material; no unsupported adjudication of guilt is the issue raised by the described conduct.

D:

Representation duties require screening and management of conflicts according to the governing professional-conduct rules and consent limits; the inquiry instead concerns No unsupported adjudication of guilt, with its own elements.

Question 85

A plaintiff initially shows enough facts to require the defendant to respond, but no final judgment is entered. Which concept is involved?

  1. Permissive inference
  2. Burden of persuasion
  3. Prima facie case
  4. Burden of production

Explanation

Correct Answer

C:

A prima facie showing is sufficient at the relevant procedural stage to support an inference or shift a production obligation, not automatically to win ultimately.

Incorrect Answers

A:

A permitted inference allows but does not require a conclusion from proven circumstances, unlike a rule that conclusively establishes an issue; here the operative distinction is Prima facie case.

B:

The persuasion burden identifies who bears the risk of failing to convince the decision-maker to the required evidentiary standard; those prerequisites should not be confused with Prima facie case.

D:

The burden of producing evidence concerns whether enough material has been presented to put an issue before the factfinder, distinct from ultimate persuasion; prima facie case addresses the distinct legal requirement stated in the facts.

Question 86

A court requires a party to present supporting evidence for its asserted defense. Which burden is being addressed?

  1. Prima facie case
  2. Burden of production
  3. Permissive inference
  4. Burden of persuasion

Explanation

Correct Answer

B:

The burden of producing evidence concerns whether enough material has been presented to put an issue before the factfinder, distinct from ultimate persuasion.

Incorrect Answers

A:

A prima facie showing is sufficient at the relevant procedural stage to support an inference or shift a production obligation, not automatically to win ultimately; that concept must be distinguished from Burden of production here.

C:

A permitted inference allows but does not require a conclusion from proven circumstances, unlike a rule that conclusively establishes an issue; the circumstances point to Burden of production rather than that separate test.

D:

The persuasion burden identifies who bears the risk of failing to convince the decision-maker to the required evidentiary standard; burden of production is the issue raised by the described conduct.

Question 87

A claimant must convince a judge of the truth of a fraud allegation at final hearing. Which burden is relevant?

  1. Permissive inference
  2. Burden of persuasion
  3. Burden of production
  4. Prima facie case

Explanation

Correct Answer

B:

The persuasion burden identifies who bears the risk of failing to convince the decision-maker to the required evidentiary standard.

Incorrect Answers

A:

A permitted inference allows but does not require a conclusion from proven circumstances, unlike a rule that conclusively establishes an issue; the relevant step in this scenario is Burden of persuasion.

C:

The burden of producing evidence concerns whether enough material has been presented to put an issue before the factfinder, distinct from ultimate persuasion; here the operative distinction is Burden of persuasion.

D:

A prima facie showing is sufficient at the relevant procedural stage to support an inference or shift a production obligation, not automatically to win ultimately; those prerequisites should not be confused with Burden of persuasion.

Question 88

A court instructs that an established fact may permit, but does not compel, an inference of a disputed fact. Which concept is involved?

  1. Burden of persuasion
  2. Burden of production
  3. Prima facie case
  4. Limited monetary jurisdiction
  5. Permissive inference

Explanation

Correct Answer

E:

A permitted inference allows but does not require a conclusion from proven circumstances, unlike a rule that conclusively establishes an issue.

Incorrect Answers

A:

The persuasion burden identifies who bears the risk of failing to convince the decision-maker to the required evidentiary standard; permissive inference raises a different threshold from this alternative.

B:

The burden of producing evidence concerns whether enough material has been presented to put an issue before the factfinder, distinct from ultimate persuasion; that concept must be distinguished from Permissive inference here.

C:

A prima facie showing is sufficient at the relevant procedural stage to support an inference or shift a production obligation, not automatically to win ultimately; the circumstances point to Permissive inference rather than that separate test.

D:

A court of limited jurisdiction can hear only matters within powers granted by law, including any prescribed amount-in-controversy limits; permissive inference is the issue raised by the described conduct.

Question 89

A claimant files in a court empowered to hear only small civil monetary claims, but the demand exceeds its statutory limit. Which defect may arise?

  1. Waiver of personal-jurisdiction defense
  2. Limited monetary jurisdiction
  3. Nonwaivable subject-matter jurisdiction
  4. Consent to personal jurisdiction

Explanation

Correct Answer

B:

A court of limited jurisdiction can hear only matters within powers granted by law, including any prescribed amount-in-controversy limits.

Incorrect Answers

A:

A defendant may lose certain personal-jurisdiction objections by failing to assert them through the required procedural route; the inquiry instead concerns Limited monetary jurisdiction, with its own elements.

C:

Parties cannot generally confer federal subject-matter jurisdiction merely by agreement or failure to object; the relevant step in this scenario is Limited monetary jurisdiction.

D:

Valid consent or forum-selection terms can support personal jurisdiction subject to mandatory limits and proper interpretation; here the operative distinction is Limited monetary jurisdiction.

Question 90

A defendant lives abroad but has agreed by contract to submit specified disputes to a named court. Which jurisdictional factor matters?

  1. Consent to personal jurisdiction
  2. Waiver of personal-jurisdiction defense
  3. Limited monetary jurisdiction
  4. Nonwaivable subject-matter jurisdiction

Explanation

Correct Answer

A:

Valid consent or forum-selection terms can support personal jurisdiction subject to mandatory limits and proper interpretation.

Incorrect Answers

B:

A defendant may lose certain personal-jurisdiction objections by failing to assert them through the required procedural route; consent to personal jurisdiction addresses the distinct legal requirement stated in the facts.

C:

A court of limited jurisdiction can hear only matters within powers granted by law, including any prescribed amount-in-controversy limits; consent to personal jurisdiction raises a different threshold from this alternative.

D:

Parties cannot generally confer federal subject-matter jurisdiction merely by agreement or failure to object; that concept must be distinguished from Consent to personal jurisdiction here.

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