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Exam CFE - Investigation All Questions

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Exam CFE - Investigation topic 1 question 10 discussion

Actual exam question from ACFE's CFE - Investigation
Question #: 10
Topic #: 1
[All CFE - Investigation Questions]

Jana, the controller of XYZ Company, notices that the company’s hotel expenses increased substantially from the prior year. She wants to check to see if this is reasonable by comparing hotel expenses from both years to the number of days XYZ’s employees traveled. Which of the following data analysis functions would be the most useful in helping Jana analyze these two variables?

  • A. Correlation analysis
  • B. Duplicate testing
  • C. Verifying multiples of a number
  • D. Benford’s Law analysis
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Suggested Answer: D 🗳️

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raochavan
3 weeks, 6 days ago
Selected Answer: A
Answer: A - Correlation analysis is used to measure the relationship between two variables—in this case, hotel expenses and the number of travel days. By performing this analysis, Jana can determine whether an increase in hotel expenses aligns proportionally with an increase in travel days. If expenses have risen disproportionately, it could indicate fraud, mismanagement, or unusual spending patterns. not Benford’s Law because Benford's law helps detect anomalies in naturally occurring numerical datasets by analyzing frequency distributions of leading digits, but it is not suited for comparing two related variables like hotel expenses and travel days.
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