CFE-LAW Online Practice Questions and Answers

Davis is an employee at Waccamaw Homeplace, a publicly traded corporation. Davis knows that Waccamaw is about to publicly announce a new joint venture project in China, so he buys shares of Waccamaw stock. Assuming that his conduct was illegal in the jurisdiction in which he works and resides, what type of crime did Davis MOST LIKELY commit?

A. Insider trading

B. Trading on margin

C. Futures fraud

D. Churning

In most civil law systems, which of the following parties typically serves as the fact finder in criminal proceedings?

A. A panel of court-appointed attorneys

B. A jury

C. A panel comprised of laypersons

D. A judge

All of the following are common legal defenses for tax evasion EXCEPT:

A. Mental illness of the taxpayer

B. The actions were tax avoidance, not tax evasion

C. Death of the taxpayer

D. The taxpayer's reliance on an attorney or accountant

Which of the following statements concerning judgments involving parties in multiple jurisdictions is MOST ACCURATE?

A. If a party obtains a judgment in one jurisdiction, that party will automatically be able to enforce the judgment wherever the defendant resides.

B. If a party obtains a judgment in one jurisdiction, that party will automatically be able to enforce the judgment in any jurisdiction.

C. Whether a foreign judgment is enforceable might depend on whether the two jurisdictions have an enforcement treaty.

D. Whether a foreign judgment is enforceable always depends on where the defendant's assets are located.

Cory has been charged with tax evasion for filing a false tax return. As a defense, Cory claims that he made an honest mistake due to the tax law's complexity, and he did not intentionally submit an incorrect tax return. If the court finds that his mistake was in good faith, he most likely will not be found to have "willfully" engaged in fraudulent actions to avoid reporting or paying his taxes.

A. True

B. False

Which of the following is NOT a right of the accused under the United Nations' (UN) International Covenant on Civil and Political Rights (ICCPR)?

A. Right to be presumed innocent until proven guilty

B. Freedom from arbitrary arrests

C. Right of the accused to be informed of criminal charges

D. Right to a trial by jury

In jurisdictions that allow criminal bargaining agreements, the defendant's counsel generally has the discretion to determine whether a bargaining agreement is available to the defendant.

A. True

B. False

Which of the following, if available, would help an organization recover losses from an instance of internal fraud?

A. Deposition

B. Fidelity insurance

C. Customer liability policy

D. Privilege insurance

Which of the following is the MOST ACCURATE statement about self-regulatory organizations (SROs) in the securities industry?

A. In some jurisdictions, SROs establish the standards and rules under which members of the securities industry operate.

B. An SRO generally has sole regulatory authority over the securities industry in the jurisdiction in which it operates.

C. In most jurisdictions, SROs are prohibited from participating in the resolution of disputes related to securities transactions.

D. An SRO is a governmental entity that exercises regulatory authority over the securities industry in its jurisdiction.

Which of the following is TRUE in regard to authenticating evidence in most common law systems?

A. Digital records cannot be authenticated by testimony from a witness with personal knowledge.

B. For evidence to be authenticated, it must be reviewed and voted on by a jury.

C. The purpose of authentication is to ensure that hearsay is not admitted into evidence.

D. Exhibits that cannot be authenticated will not be admitted, regardless of relevance.