Illinois Fraud Examiner Certification

Illinois Fraud Examiner Certification Examination Practice Questions And Correct Answers (Verified Answers) Plus Rationales 2026 Q&A | Instant Download Pdf

• Which of the following is the primary objective of a fraud

examination?

• To prosecute the perpetrator
• To identify, gather, and evaluate evidence of fraud
• To enhance company profits
• To implement internal controls
• To identify, gather, and evaluate evidence of fraud

Rationale: Fraud examination focuses on detecting and documenting

fraud to support possible legal or disciplinary action. 1 / 4

• Which type of fraud involves misappropriation of company assets by

employees?

• Financial statement fraud
• Corruption
• Asset misappropriation
• Identity theft
• Asset misappropriation

Rationale: Asset misappropriation is the theft or misuse of an

organization’s resources by employees.

3. Financial statement fraud is typically committed to:

• Cover embezzlement
• Improve financial reporting accuracy
• Mislead investors or creditors
• Punish management
• Mislead investors or creditors

Rationale: Financial statement fraud is designed to misrepresent

financial health to stakeholders.

• Which of the following is a common red flag of occupational fraud?
• Excessive overtime
• Lifestyle changes inconsistent with income
• Frequent business travel
• Participation in charity work
• Lifestyle changes inconsistent with income 2 / 4

Rationale: Sudden wealth without legitimate income sources often

indicates fraudulent activity.

5. The “fraud triangle” consists of:

• Motive, means, opportunity
• Pressure, opportunity, rationalization
• Fraud, risk, exposure
• Theft, concealment, conversion
• Pressure, opportunity, rationalization

Rationale: The fraud triangle explains the three conditions often

present in fraud cases.

• Which of the following investigative tools involves examining an

employee’s personal spending patterns?

• Forensic accounting
• Background checks
• Lifestyle audit
• Surveillance
• Lifestyle audit

Rationale: Lifestyle audits compare expenditures to known income to

detect unreported funds.

7. In fraud examination, chain of custody refers to:

• Legal procedures for hiring investigators
• Documentation of evidence handling from collection to

presentation 3 / 4

• Organizational hierarchy
• Process of training staff
• Documentation of evidence handling from collection to

presentation

Rationale: Proper chain of custody ensures evidence remains

admissible in court.

• Which federal law primarily governs securities fraud in the United

States?

• Sarbanes-Oxley Act
• Securities Exchange Act of 1934
• Foreign Corrupt Practices Act
• Dodd-Frank Act
• Securities Exchange Act of 1934

Rationale: The Securities Exchange Act of 1934 regulates secondary

trading of securities and prohibits fraudulent activities in the markets.

9. Embezzlement differs from theft in that embezzlement:

• Involves physical property only
• Requires lawful possession followed by unlawful conversion
• Is always committed by executives
• Can only occur in financial institutions
• Requires lawful possession followed by unlawful conversion
• / 4