From the2014 International Fraud Examiners Manual, under the section related to tracing financial transactions, specifically tracing the disposition of loan proceeds, the following objectives of tracing activities are explicitly outlined:
“Tracing the disposition of loan proceeds can help fraud examiners:
Determine whether loan proceeds were deposited into hidden or unknown accounts
Determine whether loan proceeds were used to pay off other loans
Identify the involvement of previously unknown individuals (potential witnesses)
Determine whether payments were made from hidden accounts
Identify undisclosed related-party transactions”
There isno mentionthat tracing loan proceeds can uncoverprevious civil offensescommitted by the subject. Civil offenses refer to non-criminal violations (e.g., breach of contract, torts), which tracing offinancial transactions like loan proceedsis not directly designed to uncover.
This isnot a recognized purposeof tracing as taught in the CFE Investigation section. The core objectives revolve around uncovering hidden assets, hidden accounts, payments, and potential witnesses —not prior legal infractions.
Therefore, thecorrect answer is A, as it is the only option that isNOT trueaccording to official CFE investigation materials.
