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Free CFCS Practice Questions

10 free, exam-style Certified Financial Crime Specialist (CFCS) practice questions with answers and explanations. No signup required. Work through them below, then take the full free CFCS practice test to study every exam domain.

Question 1

A CFO receives an email that appears to be from the CEO, requesting an urgent wire transfer of $500,000 to a new vendor with instructions to bypass normal approval processes. This is MOST likely:

  1. A legitimate urgent business request requiring immediate processing
  2. A Business Email Compromise (BEC) attack impersonating the CEO
  3. A routine payment request following standard vendor procedures
  4. A phishing email targeting financial credentials
Show answer & explanation

Correct answer: B - A Business Email Compromise (BEC) attack impersonating the CEO

Question 2

A money launderer converts illicit cash into cryptocurrency, transfers it through multiple wallets including a mixer service, and then converts it back to fiat currency through an overseas exchange. Which stages of money laundering are represented?

  1. Placement and layering only, but not integration
  2. Layering and integration only, but not placement
  3. Placement, layering, and integration
  4. Integration only, since cryptocurrency is the final form
Show answer & explanation

Correct answer: C - Placement, layering, and integration

Question 3

A forensic accountant applies Benford's Law to a company's accounts payable data and finds that the digit 5 appears as the leading digit 22% of the time. According to Benford's Law, this result suggests:

  1. The data is perfectly normal since 22% is close to the expected frequency
  2. Benford's Law does not apply to accounts payable data
  3. The analysis is inconclusive without additional data
  4. The data may be manipulated, as 22% significantly exceeds the expected 7.9%
Show answer & explanation

Correct answer: D - The data may be manipulated, as 22% significantly exceeds the expected 7.9%

Question 4

Regarding facilitating payments, the FCPA and UK Bribery Act differ in that:

  1. Both laws prohibit facilitating payments
  2. The FCPA allows facilitating payments while the UK Bribery Act prohibits them
  3. The UK Bribery Act allows facilitating payments while the FCPA prohibits them
  4. Both laws allow facilitating payments
Show answer & explanation

Correct answer: B - The FCPA allows facilitating payments while the UK Bribery Act prohibits them

Question 5

A company is 30% owned by SDN-listed Entity A and 25% owned by SDN-listed Entity B. Under OFAC's 50% rule, this company is:

  1. Treated as blocked property because the aggregate SDN ownership (30% + 25% = 55%) exceeds 50%
  2. Not subject to sanctions because the combined ownership must be held by a single SDN entity to trigger the 50% rule
  3. Subject to blocking only if Entity A or Entity B increases their individual ownership stake to exceed 50%
  4. Requires case-by-case OFAC determination since the ownership structure involves multiple SDN entities
Show answer & explanation

Correct answer: A - Treated as blocked property because the aggregate SDN ownership (30% + 25% = 55%) exceeds 50%

Question 6

An investigator reviews a company's financial statements and notices that net income has grown 40% annually for three years, but operating cash flow has declined over the same period. This discrepancy MOST likely suggests:

  1. The company is highly profitable and growing rapidly
  2. Normal variation between accrual and cash accounting
  3. Potential revenue manipulation or fraudulent accounting
  4. The company is reinvesting all profits back into operations
Show answer & explanation

Correct answer: C - Potential revenue manipulation or fraudulent accounting

Question 7

The correct sequence of a hawala transaction is:

  1. Customer deposits funds with Hawaladar B; Hawaladar B notifies Hawaladar A; Hawaladar A releases payment to recipient; settlement occurs through reverse transactions
  2. Customer gives money to Hawaladar A; Hawaladar A contacts Hawaladar B; Hawaladar B pays the recipient; hawaladars settle debt later
  3. Customer provides collateral to Hawaladar A; Hawaladar A transfers digital codes to Hawaladar B; Hawaladar B exchanges codes for cash with recipient; debt cleared immediately
  4. Customer pays Hawaladar A in local currency; Hawaladar A converts to recipient's currency; Hawaladar A wires converted funds directly to recipient through banking system
Show answer & explanation

Correct answer: B - Customer gives money to Hawaladar A; Hawaladar A contacts Hawaladar B; Hawaladar B pays the recipient; hawaladars settle debt later

Question 8

The distinction between 'source of funds' and 'source of wealth' in Enhanced Due Diligence is:

  1. They are the same concept
  2. Source of wealth is only relevant for PEPs
  3. Source of funds is only relevant for wire transfers
  4. Source of funds refers to specific transactions, source of wealth refers to overall financial background
Show answer & explanation

Correct answer: D - Source of funds refers to specific transactions, source of wealth refers to overall financial background

Question 9

How does the Common Reporting Standard (CRS) differ from FATCA in scope?

  1. CRS is multilateral while FATCA is bilateral
  2. CRS has a narrower scope than FATCA
  3. FATCA covers more countries than CRS
  4. There is no difference in scope
Show answer & explanation

Correct answer: A - CRS is multilateral while FATCA is bilateral

Question 10

The Odebrecht scandal is frequently cited as a case study in convergence because it involved:

  1. Tax evasion and bribery schemes within Latin American markets
  2. Corruption, money laundering, and tax evasion across multiple countries
  3. Bank fraud and regulatory violations in Brazilian financial sectors
  4. Corporate embezzlement and securities fraud across regional subsidiaries
Show answer & explanation

Correct answer: B - Corruption, money laundering, and tax evasion across multiple countries

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