FA-CERT Sample Questions & Answers
Data analysis techniques and advanced financial and ratio analysis tie for the largest share, with the smaller remainder on textual analytics that flags fraud hiding in written communication.
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- Question 1Advanced
Data Analysis Techniques for Fraud Examiners · Scheme-Specific Data Analysis Techniques
Background:
Zephyr Manufacturing has 4,500 employees and processes over 50,000 vendor invoices annually. The internal audit team suspects that a purchasing manager might be operating a shell company scheme.Current Situation:
The audit team has extracted the Vendor Master File and the Employee Master File. They want to use data analytics to identify potential overlaps between employees and vendors that could indicate a conflict of interest or a shell company.Requirements:
The data analytics test must be designed to uncover hidden relationships even if the fraudster attempted to mask their identity by using variations of their name or address.Question:
Which of the following data analytics techniques would be the MOST effective for detecting a sophisticated shell company scheme in this scenario?flowchart TD A[Employee Master File] --> C{Data Matching Logic} B[Vendor Master File] --> C C -->|Exact Match| D[Direct Hits] C -->|Fuzzy Match| E[Hidden Hits] D --> F[Investigation] E --> FShow answer & explanation
Correct answer: C
Fuzzy matching (or approximate string matching) is the most effective technique for detecting sophisticated shell company schemes because fraudsters often alter data slightly (e.g., '123 Main St.' vs '123 Main Street') to evade exact-match detection controls. While exact-match bank account joins are useful, fuzzy matching across multiple fields (addresses, phone numbers) provides a more comprehensive net for hidden relationships.
- Question 2Intermediate
Data Analysis Techniques for Fraud Examiners · Scheme-Specific Data Analysis Techniques
A fraud examiner is analyzing payroll data to detect potential ghost employees. Which of the following data analytics queries would be the MOST direct indicator of a ghost employee scheme?
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Correct answer: B
Extracting employees who share the same bank account number is a classic test for ghost employees, as the fraudster who creates the fictitious employee must direct the payroll funds to an account they control (often their own). Overtime analysis detects overtime abuse, and missing tax withholdings could indicate other issues, but shared direct deposit accounts are a primary red flag for ghost employees.
- Question 3Beginner
Data Analysis Techniques for Fraud Examiners · Data Analytics Fundamentals
True or False: In the context of data analytics for fraud detection, a 'false positive' occurs when an analytical test flags a transaction as anomalous or potentially fraudulent, but subsequent investigation reveals it to be a legitimate, authorized transaction.
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Correct answer: A
A false positive is a result that incorrectly indicates that a particular condition or attribute is present. In fraud analytics, this means a transaction tripped the red flag parameters of the test, but upon human review, the transaction is found to have a valid business purpose.
- Question 4Intermediate
Data Analysis Techniques for Fraud Examiners · Scheme-Specific Data Analysis Techniques
When performing data analytics to detect potential check tampering schemes, an examiner notices several gaps in the sequence of cleared check numbers. Which of the following best explains why a fraudster might cause out-of-sequence checks?
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Correct answer: A
Gaps in check sequences often indicate that checks have been removed from the middle or bottom of a checkbook. Fraudsters do this hoping the missing checks will not be noticed immediately, allowing them time to forge and cash the checks. Sequence analysis is a primary data analytics test for identifying this anomaly.
- Question 5Beginner
Data Analysis Techniques for Fraud Examiners · The Data Analysis Process
During the preparation phase of a data analytics project, an examiner receives a data dump from the IT department. The examiner notices that dates are formatted as 'MM/DD/YYYY' in one column and 'DD-MM-YY' in another, and several numerical fields contain text characters. Which of the following processes must the examiner perform before running any analytical tests?
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Correct answer: B
Data cleansing and normalization (part of the Preparation Phase) involves standardizing data formats (like date fields) and removing invalid characters from numerical fields so that the analytical software can process the data accurately. Skipping this step leads to errors or false conclusions.
- Question 6Advanced
Data Analysis Techniques for Fraud Examiners · Scheme-Specific Data Analysis Techniques
To detect a potential lapping scheme utilizing data analytics, a fraud examiner would most likely focus on which of the following anomalies?
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Correct answer: B
Lapping involves stealing one customer's payment and using a subsequent customer's payment to cover the stolen amount. This creates a continuous delay in posting payments. By using data analytics to compare bank deposit dates against the dates payments are credited to the accounts receivable subledger, examiners can identify the delays characteristic of lapping.
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