Questions for the CFE-LAW were updated on : Nov 21 ,2025
Page 1 out of 11. Viewing questions 1-15 out of 158
Question 1
Acme Inc. is the debtor in a bankruptcy case that will enable the organization to continue conducting business after the proceeding. Which of the following is one of the preferred approaches to governance and management of the proceeding under the World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (World Bank Principles)?
A. The creditor with the largest claim against Acme is entrusted as the insolvency supervisor.
B. Exclusive control of the proceeding is entrusted to an independent insolvency representative.
C. Acme's management and its creditors oversee governance responsibilities.
D. Supervision of Acme's management is undertaken by the company's internal audit function.
Answer:
B
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 2
In an inquisitorial judicial proceeding, which of the following parties is primarily responsible for questioning witnesses and generally has a larger role in the evidence-gathering process?
A. The defendant's counsel
B. The grand jury
C. The prosecution
D. The judge
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 3
Which of the following is a red flag that might be indicative of an entity operating a security business without the proper license or registration?
A. There are justified gaps in the work history of promoters at the entity.
B. The entity is known to have a history of regulatory problems.
C. There is a lack of customer complaints against the entity.
D. The entity's website contains detailed background information.
Answer:
B
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 4
__________ insurance is a type of insurance under which an insured entity is covered against losses caused by the dishonest or fraudulent acts of its employees.
A. Fidelity
B. Inherent risk
C. Opportunity
D. Residual risk
Answer:
A
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 5
Calvin, an attorney, sends a letter that is protected by a legal professional privilege to Katrina, one of his clients. Upon receiving the letter, Katrina emails it to her coworker who has no need to know the information contained in the letter. Which of the following statements is MOST ACCURATE?
A. The privilege might have been waived because Katrina used email to transmit the protected information.
B. The privilege might have been waived because Katrina transmitted the protected information to a third party who has no need to know the information.
C. The privilege was not waived by Katrina because the legal professional privilege belongs to the attorney, not the client.
D. The privilege was not waived because the legal professional privilege cannot be waived by transmitting protected information to a third party.
Answer:
B
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 6
The Financial Action Task Force (FATF) Recommendations suggest that countries should do which of the following?
A. Use a risk-based approach when creating and establishing their anti-money laundering policies.
B. Require financial institutions to monitor their customers' social media activity for signs of money laundering.
C. Only conduct business with other countries that comply with the anti-money laundering recommendations.
D. Impose a sentence of five years of imprisonment for all money laundering and terrorist financing convictions.
Answer:
A
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 7
Consents to searches by government agents that are obtained by force, duress, or bribery are NOT effective under the law and do NOT eliminate the need for a search warrant.
A. True
B. False
Answer:
A
User Votes:
A
50%
B
50%
Discussions
0/ 1000
Question 8
The Financial Action Task Force (FATF) Recommendations concerning cross-border transfers of currency recommend that countries do which of the following?
A. Require individuals to make a disclosure any time currency is physically transported into or out of a country, regardless of the currency amount.
B. Eliminate the practice of carrying currency above a certain threshold across international borders.
C. Establish reporting thresholds for physically carrying currency or currency equivalents into or out of a country.
D. Stipulate that financial institutions must inform authorities any time they conduct a transaction involving a cash equivalent originating from another country.
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 9
Which of the following is required for a contract, transaction, or scheme to qualify as an investment contract?
A. The investment must not have been made with expectations of making a profit.
B. The investment must be made in cash.
C. The investment is in a common enterprise.
D. The investment activity is managed solely by the efforts of the investor and no others.
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 10
In common law jurisdictions, which of the following scenarios would MOST LIKELY result in sanctions for an organization for failing to preserve evidence?
A. An employee intentionally destroys a relevant document prior to the company announcing the possibility of litigation.
B. An employee unintentionally alters a digital document that is not directly relevant to any potential litigation that the company has announced to its staff.
C. An employee accidentally deletes a digital document that is relevant to litigation after the company announces that such litigation is a possibility.
D. An employee abstains from destroying a document relevant to an ongoing proceeding even though this act violates the company's document retention policy.
Answer:
A
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 11
Which of the following statements about civil actions in most jurisdictions is CORRECT?
A. The plaintiff's complaint must typically contain a copy of all documents that might be relevant to the case.
B. Civil actions begin with the filing of a pleading, usually in the jurisdiction where the defendant resides or where the claim originated.
C. The plaintiff's complaint does not need to state the grounds for legal relief.
D. All of the above are correct.
Answer:
B
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 12
Leslie, a business owner, submits tax information regarding her company's finances to her country's taxing authority. The taxing authority allows companies to subtract the cost of production from their gross sales to determine the taxable income. To reduce her tax liability, Leslie inflates the costs of production on her tax forms. Which of the following schemes has Leslie MOST LIKELY committed?
A. A value-added tax evasion scheme
B. A falsified tax deduction scheme
C. A sales tax scheme
D. A tax credit evasion scheme
Answer:
B
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 13
Which of the following is a requirement of the European Union's (EU) General Data Protection Regulation (GDPR)?
A. An organization must obtain a data subject's consent before collecting or processing personal data about that individual.
B. An organization must refrain from confirming or denying whether it is in possession of a data subject's personal data even if the data subject requests this information.
C. An organization must provide a data subject's personal data upon that individual's request for a reasonable fee.
D. An organization must notify all affected data subjects within six months when a data breach occurs that is likely to result in a high risk to their rights and freedoms.
Answer:
A
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 14
Which of the following statements regarding using front businesses as a method of laundering money is MOST ACCURATE?
A. Front businesses are a favored method because it is easy to match the costs associated with providing customers food, liquor, and entertainment with the revenues produced.
B. Bars, restaurants, and nightclubs are commonly used as front businesses because these venues tend to charge relatively low prices and customers rarely vary in their purchases.
C. Front businesses can often be detected because these businesses have a large number of customers during peak operating hours and high income.
D. A front business that conducts legitimate business can provide cover for delivery and transportation related to illegal activity.
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 15
Which of the following is a legal element that the government must show to prove a conspiracy claim?
A. All of the conspirators knowingly committed an overt act in furtherance of the conspiracy.
B. The defendant entered into an agreement to commit an illegal act with at least one other person.
C. The conspirators accomplished the purpose of the conspiracy that was initially established.
D. The defendant intentionally or unintentionally joined and participated in the illegal scheme.