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CFE Certified Fraud Examiner Cheat Sheet

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Fraud Schemes + Financial Crimes

  • 39% of exam
  • Fraud Tree Asset Misappropriation Corruption Financial Statement Fraud Red Flags + Ratios Money Laundering

Fraud Investigations + Legal Issues

  • 39% of exam
  • Evidence + Chain of Custody Interviewing Tracing + Hidden Assets Digital + Document Forensics Fraud Law + Statutes Evidence Law + Rights

Fraud Prevention + Deterrence

  • 22% of exam
  • Fraud Triangle + Theory COSO + Internal Controls Governance + Ethics Detection Methods Deterrence Code of Ethics

Quick Facts

  • Exam CFE
  • Credential Certified Fraud Examiner
  • Questions 310 total
  • Sections 120 + 120 + 70
  • Time 2.5h + 2.5h + 1.5h
  • Pass 75% each section
  • Fee $480 application
  • Delivery Prometric or remote
  • Blueprint June 2 2026

Money Laundering Stages SC

  • Placement -> Layering -> Integration
  • Placement: cash enters Layering: obscure trail Integration: appears clean

Skimming vs Cash Larceny SC

Skimming

  • Off-book theft
  • Before recording
  • No ledger trail

Cash larceny

  • On-book theft
  • After recording
  • Deposit comes up short
  • Before vs after books

Scheme Identifier SC

  • Cash gone before recording → Skimming ( Off-book )
  • Cash gone after recording → Cash larceny ( On-book )
  • False invoice paid → Billing scheme
  • Ghost worker paid → Payroll fraud
  • Check altered or forged → Check tampering
  • Revenue booked too early → Financial statement fraud
  • Vendor pays buyer back → Kickback ( Corruption )
  • Cash split under threshold → Structuring ( BSA crime )

Fraud Tree SC

  • Fraud tree Three fraud branches ACFE
  • Asset misappropriation Most common, least costly
  • Corruption Bribery, conflicts
  • Financial statement fraud Least common, costliest
  • Occupational fraud Employee against employer
  • Predication Reasonable basis to investigate

Fraud Tree Branches SC

  • Corruption | Asset Misappropriation | Financial Statement
  • Corruption: bribery, conflicts Asset misapp: most common Financial stmt: costliest

Bribery vs Illegal Gratuity SC

Bribery

  • Before decision
  • Quid pro quo
  • Intends to influence

Illegal gratuity

  • After the act
  • Reward for decision
  • No agreement required
  • Influence vs reward

Asset Misappropriation SC

  • Skimming Off-book cash theft
  • Cash larceny On-book cash theft
  • Billing scheme Shell or inflated invoices
  • Payroll Ghost employees
  • Check tampering Forged or altered checks
  • Expense reimbursement Fake or inflated claims
  • Register disbursement False refunds, voids

Corruption SC

  • Bribery Pay to influence
  • Kickback Vendor secret commission
  • Illegal gratuity Reward after act
  • Conflict of interest Undisclosed self-interest
  • Economic extortion Demand under duress
  • Bid rigging Collusive procurement

Financial Statement Fraud SC

  • Revenue recognition Book revenue early
  • Channel stuffing Excess period-end shipping
  • Bill-and-hold Bill before delivery
  • Fictitious revenue Fake sales, customers
  • Timing differences Wrong-period recording
  • Concealed liabilities Hide payables, expenses
  • Improper disclosures Omit material facts
  • Asset valuation Overstate asset values

Red Flags + Ratios SC

  • Current ratio Short-term liquidity
  • Quick ratio Acid-test liquidity
  • Gross margin Sudden spikes suspicious
  • Receivable turnover Collection speed
  • Inventory turnover Stock movement speed
  • Vertical analysis Percent of base
  • Horizontal analysis Period-to-period change

Money Laundering SC

  • Placement Cash enters system
  • Layering Obscure the trail
  • Integration Funds appear legitimate
  • Structuring (smurfing) Split under threshold
  • Trade-based Mis-invoiced trade value
  • CTR Currency transaction report $10k
  • SAR Suspicious activity report
  • BSA Bank Secrecy Act

5 Interview Question Types IN

  • Intro | Info | Assessment | Closing | Admission
  • Intro: rapport Info: open then closed Assessment: test credibility Closing: reconcile Admission: confront guilty

Interview vs Interrogation IN

Interview

  • Non-accusatory
  • Fact-finding
  • Open questions

Interrogation

  • Accusatory
  • Admission-seeking
  • After evidence gathered
  • Gather vs confront

Investigation Method Picker IN

  • Prove hidden income → Net worth method
  • Unknown income source → Bank deposits method
  • Test digit patterns → Benford's Law
  • Seized a computer → Forensic image ( Hash it )
  • Confirm facts, non-accusatory → Interview
  • Guilt already established → Admission-seeking interview
  • Check document authenticity → Document exam
  • Move evidence to court → Chain of custody

Evidence + Chain of Custody IN

  • Chain of custody Unbroken handling trail
  • Direct evidence Proves fact directly
  • Circumstantial Inference required
  • Documentary Records and papers
  • Testimonial Witness statements
  • Spoliation Destroying evidence

Criminal vs Civil IN

Criminal

  • State prosecutes
  • Beyond reasonable doubt
  • Fines or prison

Civil

  • Victim sues
  • Preponderance of evidence
  • Monetary recovery
  • Punish vs recover

Interviewing IN

  • Interview Non-accusatory fact-finding
  • Interrogation Accusatory, admission-seeking
  • Introductory Establish rapport
  • Informational Open then closed
  • Assessment Test credibility
  • Closing Confirm, reconcile
  • Admission-seeking Confront guilty subject

Direct vs Circumstantial IN

Direct

  • Proves fact directly
  • Eyewitness account
  • No inference needed

Circumstantial

  • Requires inference
  • Indirect proof
  • Can still convict
  • Direct vs inferred

Tracing + Hidden Assets IN

  • Net worth method Assets minus liabilities
  • Asset method Track asset growth
  • Expenditures method Spending versus income
  • Bank deposits method Deposits versus income
  • Direct method Specific transactions
  • Lifestyle analysis Spending exceeds income

Digital + Document Forensics IN

  • Forensic image Bit-for-bit copy
  • Hash value Prove integrity
  • Write blocker Prevent alteration
  • Metadata Data about data
  • Benford's Law Digit frequency test
  • Preserve originals Analyze copies only

Fraud Law + Statutes IN

  • Fraud elements Misrep, intent, reliance, damage
  • Mail fraud 18 USC 1341
  • Wire fraud 18 USC 1343
  • RICO Pattern of racketeering
  • SOX 404 Internal control report
  • FCPA Foreign bribery ban
  • Money laundering 18 USC 1956

Evidence Law + Rights IN

  • Hearsay Out-of-court, for truth
  • Business records Hearsay exception
  • Attorney-client Privileged legal advice
  • Work product Litigation materials protected
  • Miranda Custody plus interrogation
  • Fourth Amendment Government search limits

Fraud Triangle PR

  • Pressure + Opportunity + Rationalization
  • Pressure: motive or need Opportunity: control gap Rationalization: self-justification Diamond adds: capability

Preventive vs Detective PR

Preventive

  • Stops before occurrence
  • Segregation of duties
  • Authorization limits

Detective

  • Finds after occurrence
  • Reconciliations
  • Audits and reviews
  • Before vs after

Control + Prevention Picker PR

  • Stop fraud beforehand → Preventive control
  • Catch fraud afterward → Detective control
  • One person controls process → Segregate duties
  • No fear of detection → Increase deterrence
  • Need anonymous tips → Whistleblower hotline
  • Set ethical example → Tone at the top
  • Prioritize fraud exposures → Fraud risk assessment

Fraud Triangle + Theory PR

  • Pressure Motive or need
  • Opportunity Control gap
  • Rationalization Self-justification
  • Fraud diamond Adds capability
  • Cressey Fraud triangle origin
  • Tone at the top Leadership ethics example

COSO 5 Components PR

  • Environment | Risk | Activities | Info | Monitoring
  • CE: tone at top RA: identify risks CA: procedures IC: reporting M: ongoing checks

Fraud Triangle vs Diamond PR

Triangle

  • Three elements
  • Cressey's theory
  • Pressure, opportunity, rationalization

Diamond

  • Four elements
  • Adds capability
  • Skill to exploit
  • Three vs four

COSO + Internal Controls PR

  • Control environment Tone and integrity
  • Risk assessment Identify fraud risks
  • Control activities Policies and procedures
  • Information + communication Reporting flows
  • Monitoring Ongoing evaluation
  • Segregation of duties Split key functions
  • Preventive vs detective Stop versus find

Governance + Ethics PR

  • Audit committee Independent board oversight
  • Whistleblower hotline Confidential reporting channel
  • ACFE Code of Ethics Member conduct rules
  • No opinion of guilt Court decides guilt
  • Fraud risk assessment Map schemes to controls
  • Report to the Nations ACFE fraud study

Common Traps

Skimming vs Larceny

  • Skimming = off-book ≠ Larceny = on-book

Bribery vs Gratuity

  • Bribery = before act ≠ Gratuity = after act

Interview vs Interrogation

  • Interview = fact-finding ≠ Interrogation = admission-seeking

Who decides guilt

  • Examiner reports evidence ≠ Court decides guilt

Common vs Costly

  • Asset misapp = frequent ≠ Financial statement = costliest

Miranda scope

  • Private examiner exempt ≠ Law enforcement bound

Fraud vs Abuse

  • Fraud = intentional deception ≠ Abuse = misuse, legal

Last Minute

  • 1. Weights: 39, 39, 22 percent
  • 2. Pass 75 percent each section
  • 3. 310 questions, three sections
  • 4. Skimming off-book; larceny on-book
  • 5. Bribery before; gratuity after act
  • 6. Interview finds facts; interrogation confronts
  • 7. Triangle: pressure, opportunity, rationalization
  • 8. Laundering: placement, layering, integration
  • 9. COSO has five components
  • 10. Examiner never opines on guilt
  • 11. Net worth finds hidden income
  • 12. Chain of custody stays unbroken

CFE

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