CFE Question of the Day: Entrapment and Private Actors

Quiz Yazan Ibrahim
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CFE exam practice question — CFE Question of the Day: Entrapment and Private Actors

CFE exam practice question: daily practice for the Certified Fraud Examiner (CFE) exam — domain: Law.

Question

A company compliance officer asked an employee to create a fictitious vendor and funded the initial invoices to test controls. The employee later faces criminal charges related to the bogus payments. Which statement best describes the applicability of the entrapment defense here?

  • A. The employee can successfully claim entrapment because the employer directed and financed the scheme.
  • B. Entrapment applies only when government agents induce the offense; private employer inducement generally does not establish entrapment unless the employer acted as an agent of the government.
  • C. Any inducement by an employer is illegal entrapment, so evidence of the scheme must be suppressed.
  • D. The employer is automatically criminally liable for the employee’s offense solely because it instigated the conduct.
Show the answer and explanation

Correct answer: B. Entrapment applies only when government agents induce the offense; private employer inducement generally does not establish entrapment unless the employer acted as an agent of the government.

Option B is best because entrapment is a constitutional and common-law defense that requires government (or government-agent) inducement of the criminal act; private-party inducement usually does not meet that legal threshold unless the private actor was effectively acting on behalf of the state. Option A is wrong because private direction/financing alone does not create an entrapment defense. Option C is incorrect since not all private inducement requires suppression of evidence—suppression is tied to constitutional violations by state actors. Option D is wrong because employer instigation does not automatically create criminal liability; liability depends on statutes and the employer’s intent and participation, which must be proven.

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