ACFE CFE-Law Practice Exam Questions & Answers

7 Free Questions Last reviewed November 4, 2026 Prepared & Reviewed by the ValidExamDumps Editorial Team

158 Practice Questions (Our Bank)
120 minutes Exam Duration
70% Passing Score
Exam Facts

ACFE CFE-Law Exam Details

Key details for this exam, checked against the published exam outline

Exam Code
CFE-Law
Full Name
Certified Fraud Examiner (CFE) - Law
Issuing Body
Association of Certified Fraud Examiners (ACFE)
Question Format (Our Bank)
Multiple Choice
Official Exam Fee
USD 480 (included as part of CFE Exam Application fee)
Delivery
Online proctored via Prometric ProProctor platform or in-person at Prometric Testing Centers
Eligibility
Must be an Associate Member of the ACFE in good standing and meet minimum 40-point eligibility requirement on CFE Exam Application
Full Question Set
158 questions Get All Questions
Practice Questions

Free CFE-Law Practice Questions

Each question shows the correct answer and an explanation of why it is right

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ValidExamDumps Editorial Team Every question and its answer is checked by our CFE-Law exam preparation team, who also write the explanation shown with each one. How we research and review these pages

Question 1 Domain 2 Law

The Financial Action Task Force (FATF) Recommendations suggest that countries should do which of the following?

Correct Answer A
Explanation The UK Bribery Act has different requirements than the FCPA, even though both target corruption. An organization might satisfy FCPA standards but still fall short of the UK law's expectations for anti-corruption programs. The other options misstate the relationship between these two laws. Some suggest the acts are identical or that compliance with one automatically satisfies the other, which is incorrect. Understanding these differences matters because companies operating internationally must comply with multiple legal regimes simultaneously.

Question 2 Domain 2 Law

The government filed a avil action against a politician for accepting real estate as a bribe. There is a possibility that the politician could transfer the real estate to a third party before the court enters a final judgment Which type of order should the government seek from the court to prevent the politician from transferring the real estate?

Correct Answer C
Explanation Enforcing a judgment across borders depends heavily on whether the countries involved have treaties or agreements recognizing each other's court decisions. Without such an enforcement treaty, a judgment from one jurisdiction may not be recognized or enforced in another. The other options either ignore the role of treaties or suggest that enforcement is automatic based on other factors like the amount involved or the type of case. Knowing how enforcement treaties work is essential for fraud examiners dealing with cases involving international parties.

Question 3 Domain 2 Law

Which of the following would be direct evidence that the criminal defendant a former cashier for a home improvement store committed a cash larceny scheme that resulted in the theft of more than $5 000 from the store?

Correct Answer B
Explanation Whistleblower protection laws shield employees from retaliation when they report fraud, illegal activity, or misconduct to appropriate authorities like the government. Alison's report qualifies her for these protections regardless of any wrongdoing she personally committed. The laws specifically prevent employers from firing, demoting, or harassing whistleblowers. The other options either suggest her own misconduct disqualifies her or that she needs approval from others before reporting. Her embezzlement is a separate matter handled independently of her whistleblower status.

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Question 4 Domain 2 Law

The MAIN PURPOSE for maintaining the chain of custody on an item of evidence is to

Correct Answer A
Explanation Front businesses used for money laundering typically try to blend into normal operations and avoid drawing attention. A large number of customers during peak hours actually looks normal for legitimate businesses and would not be a red flag for illegal activity. Real red flags include small customer traffic combined with large cash deposits, or the opposite pattern where there are many transactions but little inventory movement. The other options correctly identify suspicious indicators like unusual cash handling, inconsistent with the business type, or transactions that don't match the stated business purpose.

Question 5 Domain 2 Law

Which of the following schemes involves disguising money from illegal nonbusiness sources by recording more income on a business's books than the business actually generates?

Correct Answer A
Explanation Common defenses in tax evasion cases include proving the taxpayer lacked knowledge of the tax obligation, acted on bad advice from professionals, or made honest mistakes in calculations. Filing for bankruptcy is not a legal defense to tax evasion because it does not erase tax fraud liability. The IRS can pursue tax evasion cases even after bankruptcy, as tax fraud is considered a willful violation. The other three options represent legitimate defenses that address the intent or knowledge elements required to prove the crime.

Question 6 Domain 2 Law

Which of the following typically does NOT have to be present for communications between an attorney and the attorney's client to be protected by a legal professional privilege?

Correct Answer B
Explanation As an employer's employee, Burton generally has an implied obligation to cooperate with internal investigations conducted by the company, especially regarding potential fraud or misconduct. The employment relationship creates this duty as part of the employment contract and the employee's obligation to act in the employer's interest. However, Burton likely still has rights like the right to legal counsel and protections against self-incrimination in certain contexts. Other options that suggest Burton has absolute silence rights or that the CFE must handle this as a criminal investigation mischaracterize the nature of internal workplace investigations.

Question 7 Domain 4 Fraud Prevention and Deterrence

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

Correct Answer D
Explanation Fidelity insurance is a risk transfer mechanism that protects organizations against losses from employee theft and dishonesty. This type of insurance covers direct losses from internal fraud and helps recover money stolen by trusted employees. While other options might relate to fraud detection or prevention measures, only fidelity insurance provides a direct financial recovery tool. Organizations purchase this coverage specifically to mitigate the financial impact when internal fraud occurs, making it the most practical loss recovery method available.
Study Guide

What the ACFE CFE-Law Exam Covers

4 domains from the ACFE CFE-Law exam outline, with approximate weightings. Every sample question above is tagged with the domain it comes from

Domain 1 Financial Transactions and Fraud Schemes

This section assesses your comprehension of fraudulent financial transactions within accounting records. Demonstrate knowledge of fundamental accounting and auditing principles, various fraud schemes, and the role of internal controls in fraud deterrence, along with other pertinent accounting and auditing topics.

Domain 2 Law

This portion evaluates your understanding of the legal frameworks utilized in prosecuting fraud cases. Measure your awareness of the legal implications associated with conducting fraud examinations, including elements of criminal and civil law, evidentiary rules, and the legal rights of defendants and plaintiffs.

Sample questions from this domain above Q1Q2Q3Q4Q5Q6

Domain 3 Investigations

This domain evaluates your skills in essential investigative techniques for collecting evidence and identifying fraud perpetrators. Encompasses effective interviewing strategies, methods for obtaining statements, accessing and utilizing public records, techniques for tracking illicit financial activities, recognizing deceptive behavior, and preparing comprehensive investigation reports.

Domain 4 Fraud Prevention and Deterrence

In this segment, candidates are evaluated on their knowledge of fraud motivations and preventive strategies, as well as frameworks related to criminal behavior. Focuses on understanding the conditions that create fraud risk and the controls and awareness programs that reduce that risk.

Sample question from this domain above Q7

FAQ

CFE-Law Exam FAQ

Common questions about the exam itself

How difficult is the CFE-Law exam and what do I need to pass?
The CFE-Law exam is a rigorous assessment that requires solid understanding of both legal concepts and fraud examination principles. You need to pass all three sections of the CFE exam, with CFE-Law being one component alongside Fraud Schemes and Financial Crimes and Fraud Investigations. The exam tests practical knowledge and critical thinking, and candidates typically spend 100-200 hours preparing depending on their background.
What background or experience do I need before taking CFE-Law?
You must be an Associate Member of the ACFE in good standing and accumulate at least 40 eligibility points through education and fraud-related work experience. Many candidates have a bachelor's degree plus fraud-related work experience in accounting, auditing, law, investigation, or loss prevention. You do not need prior certification, though fraud examination experience is valuable preparation.
Which section of the CFE exam do candidates struggle with most and why?
The Law section challenges many candidates because it requires understanding of both criminal and civil legal frameworks, evidence rules, and investigative procedures that vary by jurisdiction. Success depends on grasping how legal concepts apply to fraud investigation and prosecution rather than memorizing statutes. Focusing on practical application scenarios and understanding the intersection between fraud investigation and legal requirements helps most.
How long should I spend preparing for CFE-Law?
Realistic preparation typically ranges from 100 to 200 hours depending on your current knowledge of legal frameworks and fraud examination. Many candidates study for 2 to 4 months while balancing work and other commitments. The ACFE offers structured prep courses and the Fraud Examiners Manual as core study resources.
What happens on exam day for CFE-Law?
You take the exam either remotely through Prometric's ProProctor online platform from a private location, or in-person at a Prometric Testing Center. The exam is closed-book and closed-notes with 100 multiple-choice and true-false questions to complete in 120 minutes. You must ensure your environment meets specific requirements including a single monitor, proper furniture, and no other people present.
What are the rules for retaking CFE-Law if I fail?
If you fail the Law section, you pay USD 110 to retake that section only. You do not need to retake sections you passed. You can attempt each section up to five times. Additional fees apply if you reschedule within five to 29 days of your appointment, and you cannot reschedule less than five days before your test date.
How long is the CFE credential valid after I pass CFE-Law?
The CFE credential does not expire, but maintaining it requires ongoing Continuing Professional Education (CPE). You must earn 20 CPE credits per calendar year or 40 credits per two-year rolling period and pay annual ACFE membership dues to keep your certification active.
What job roles does the CFE-Law credential prepare me for?
CFE-Law is designed for attorneys, legal compliance officers, fraud investigators, auditors, and law enforcement personnel who need to understand the legal aspects of fraud detection and prosecution. Many CFEs work in internal audit, government agencies, corporate compliance, law firms, and forensic accounting firms where they apply their legal knowledge to identify and investigate fraud.
How does CFE-Law relate to the other sections of the CFE exam?
CFE-Law is one of three required sections you must pass to earn the Certified Fraud Examiner credential. The other sections are Fraud Schemes and Financial Crimes and Fraud Investigations, plus Fraud Prevention and Deterrence. Each section tests different competencies but together they cover the complete fraud examination body of knowledge. You do not need to pass all sections on your first attempt.
Can I take just the CFE-Law section or do I have to sit all three sections?
You must pass all three CFE exam sections to earn the Certified Fraud Examiner credential, though you can take them in any order and on different dates. Each section stands alone, so if you pass one you do not lose credit if you fail another. You only pay for sections you fail if you need to retake them.

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