العربية

SOCPA Financial Fraud Examiner Exam: free practice test

Start with 10 free questions to see what needs more practice. Finish to see your score, weakest units and every option explained.

Back to SOCPA Financial Fraud Examiner Exam

Practice test questions with answers and explanations

Try the questions in the test above first, then open each one here to see the correct answer and why every other option is wrong.

01A person with a prior conviction for fraud by deception is convicted again under Article 1 of the Anti-Financial Fraud and Breach of Trust Law. If the court imposes a fine, within what range must it fall?

Practice question Unit: Introduction to Fraud

  1. ASAR 5 million to SAR 10 million

    The minimum under Article 5 is half the ceiling, not the full ceiling.

  2. BUp to SAR 5 million, with no minimum

    This ignores the repeat-offence rule in Article 5, which sets both a minimum and a higher ceiling.

  3. CSAR 1.5 million to SAR 6 million

    This applies the Article 2 breach-of-trust ceiling of SAR 3 million; the offence here is fraud under Article 1.

  4. DSAR 2.5 million to SAR 10 million ✓ Correct answer

    Article 1’s ceiling is SAR 5 million; for repeat offending Article 5 sets a range from half the ceiling to double it.

Reference: Anti-Financial Fraud and Breach of Trust Law, Royal Decree M/79 (1442H), Arts. 1 and 5

02A manager makes small, unsupported reductions to the bad-debt allowance each quarter to meet targets, and the total becomes material. How should this be viewed?

Practice question Unit: Financial Statement Fraud

  1. AAsset misappropriation, because receivables are assets

    Nothing was taken from the company. The allowance was understated to manipulate reported profit, which is financial reporting fraud, not asset misappropriation.

  2. BAcceptable, because each change was below performance materiality

    Materiality thresholds do not excuse deliberate, unsupported adjustments; intent and the cumulative total matter.

  3. CEarnings management that became fraudulent reporting ✓ Correct answer

    ISA 240 para. A2: earnings management may start with small inappropriate adjustments and, under pressure, grow into fraudulent financial reporting once the total is material. The intent to meet targets makes it fraud, not error.

  4. DAn honest estimation error because each change was small

    The adjustments were deliberate and unsupported, so they are not honest errors.

Reference: ISA 240 (conformed text ASA 240, compiled Dec 2023), paras. 3 and A2

03In the last week of the year a company bills a distributor SAR 3 million for goods that stay in its own warehouse. A side letter lets the distributor cancel in January without penalty, and it does. How does the ACFE classify this scheme?

Practice question Unit: Financial Statement Fraud

  1. AA timing difference: premature revenue recognition

    Timing schemes move a real sale into the wrong period; here no binding sale ever existed.

  2. BAn improper asset valuation of inventory

    Inventory is not misvalued; the scheme creates revenue that did not exist.

  3. CFictitious revenue: a sale with conditions ✓ Correct answer

    The ACFE lists sales with conditions under fictitious revenues: goods never left the warehouse, and the side letter let the buyer walk away, so no completed sale existed when the SAR 3 million was booked.

  4. DAn improper disclosure of the side agreement

    Non-disclosure is part of the concealment, but the revenue amount itself is false.

Reference: ACFE Fraud Examiners Manual, Financial Transactions: financial statement fraud — fictitious revenues (sales with conditions) and timing differences

04A till shows recorded sales of SAR 18,400 for the day, but the cash counted is SAR 16,900, and no refunds were processed. Which conclusion and scheme type are most consistent?

Practice question Unit: Asset Misappropriation

  1. ANo issue, because the variance is immaterial to the day

    SAR 1,500 is about 8% of the day’s sales and there were no refunds to explain it. An unexplained shortage must be investigated, not dismissed.

  2. BA SAR 1,500 shortage pointing to possible cash larceny ✓ Correct answer

    18,400 − 16,900 = 1,500 short. The sales were recorded but the cash is missing, which fits cash larceny: theft of cash after it has entered the records.

  3. CA SAR 1,500 overage suggesting skimming

    Counted cash (16,900) is lower than recorded sales (18,400), so this is a shortage, not an overage.

  4. DA SAR 1,500 shortage pointing to skimming

    Skimming takes unrecorded cash and leaves no shortage against recorded sales; a shortage against records points to larceny.

Reference: ACFE, Occupational Fraud and Abuse Classification System (Fraud Tree), Cash: Cash larceny

05A procurement officer at a privately owned limited liability trading company — not a bank, with no government shareholding and no public service — takes SAR 80,000 from a supplier to award it a contract. What is the maximum penalty for the officer under the Anti-Bribery Law?

Practice question Unit: Corruption

  1. AUp to 2 years’ prison and/or a fine of up to SAR 50,000

    That is the Article 6 penalty for taking a benefit to follow up a transaction at a government body.

  2. BUp to 3 years’ prison and/or a fine of up to SAR 100,000

    That is the Article 4 penalty for breaching duty because of a request or intercession.

  3. CUp to 5 years’ prison and/or a fine of up to SAR 500,000 ✓ Correct answer

    Article 9 bis (2), added by Royal Decree M/4 (1440H), punishes anyone working in a private company who takes a benefit to act in breach of duty with up to 5 years’ prison and/or up to SAR 500,000.

  4. DUp to 10 years’ prison and/or a fine of up to SAR 1 million

    That is the Article 1 penalty for public employees; Article 8(4) deems staff of joint-stock companies, banks, public-service operators and government-owned companies to be public employees, and this company is none of these.

Reference: Anti-Bribery Law, Royal Decree M/36 (1412H) as amended, Arts. 8 and 9 bis (2)

06A launderer deposits drug cash in small amounts into accounts of several shell companies. They wire it abroad as “consulting fees” to a firm that then “lends” the money back to him, and he uses the loan to buy a hotel. At which point does integration take place?

Practice question Unit: Other Financial Fraud

  1. AWhen the “loan” comes back to him and pays for the hotel ✓ Correct answer

    Integration returns the funds to the launderer as apparently legitimate wealth; a loan-back used to buy an asset does this.

  2. BWhen the funds are wired abroad as consulting fees

    Moving funds through transfers with false descriptions to hide the trail is layering.

  3. CWhen the shell companies are first registered

    Setting up vehicles is preparation; no laundering stage has yet taken place.

  4. DWhen the cash is deposited into the shell companies’ accounts

    Getting cash into the financial system in small amounts is placement.

Reference: FATF, What is money laundering? (placement, layering, integration)

07A board member of a listed company uses confidential tender information he learned on the board to help his own side business win a contract with another entity. Which duty does this most directly breach?

Practice question Unit: Conflicts of Interest

  1. AThe duty of care in managing company assets

    The duty of care concerns diligence in board decisions; using company information for oneself is a loyalty breach.

  2. BThe duty not to accept gifts from suppliers

    No gift is described; he is using confidential information for his own business.

  3. CThe duty not to exploit company information ✓ Correct answer

    Companies Law Art. 27(3) and CGR Art. 42(b) prohibit a director from exploiting the company’s information for his own direct or indirect benefit; this is a breach of loyalty.

  4. DThe duty to disclose interests in company contracts

    Article 27(1) covers an interest in contracts made for the company’s account; here the contract is with another entity, so the core breach is exploiting company information.

Reference: Companies Law, Royal Decree M/132 (1443H), Art. 27(1) and (3); CMA Corporate Governance Regulations, Art. 42(b)

08Which candidate may be appointed to a listed company’s audit committee under the CGR?

Practice question Unit: Combating Financial Fraud

  1. AAn executive director with strong accounting expertise

    Article 51(a) excludes executive board members from the audit committee, whatever their expertise.

  2. BA non-executive director who left the company’s external audit firm 30 months ago ✓ Correct answer

    Article 51(f) bars anyone who works, or worked in the past two years, in the company’s executive or financial management or for its auditor. Thirty months is beyond that window, and a non-executive director is eligible under 51(a).

  3. CA director who was the company’s deputy CFO until last year

    Work in the company’s financial management within the past two years bars membership.

  4. DA former partner of the company’s audit firm who left 18 months ago

    He worked for the company’s auditor within the past two years, so he is barred.

Reference: CMA Corporate Governance Regulations (amended 2023), Art. 51(a) and (f)

09A party admits receiving SAR 400,000 but in the same statement says it was repayment of an earlier loan. May the other side rely only on the receipt and reject the explanation?

Practice question Unit: Advanced Fraud Investigation

  1. AYes, each party may take the part that favours it

    That is exactly the split Article 18(2) restricts.

  2. BGenerally no, as an admission is indivisible ✓ Correct answer

    Article 18(2) bars splitting unless it covers several facts that do not necessarily imply one another.

  3. CYes, if receipt and loan are separate facts in different documents

    The exception needs facts that do not imply one another; repayment of a loan is tied to the receipt.

  4. DYes, if the sum exceeds SAR 100,000

    The SAR 100,000 figure is the Article 66 threshold for requiring written proof; it has nothing to do with whether an admission can be divided.

Reference: Law of Evidence, Royal Decree M/43 (1443H), Arts. 18 and 66

10A party refuses, without an acceptable excuse, to hand over the device the court requested to verify his own digital evidence. What does the Law of Evidence provide?

Practice question Unit: Advanced Fraud Investigation

  1. AThe court must accept the evidence anyway

    Article 61 attaches a consequence to the refusal; the court is not bound to accept evidence it could not verify.

  2. BHe loses the right to rely on that evidence ✓ Correct answer

    Article 61: refusal costs him reliance on it, or lets it be used against him, as the case may be.

  3. CThe court fines him up to SAR 10,000

    The SAR 10,000 fine in Article 43 applies to a party who denied a document later held genuine, not to refusing a verification request.

  4. DThe burden passes to his opponent to disprove it

    Article 61 makes the refusal count against the party who refuses; it does not shift a burden onto his opponent.

Reference: Law of Evidence, Royal Decree M/43 (1443H), Arts. 43 and 61

Keep preparing for SOCPA Financial Fraud Examiner Exam

See also: Accounting & Tax Exams