CFE Question of the Day: Immunity in Investigations

Quiz Yazan Ibrahim
CFE 2026 Master Prep Bundle with Fraud Exam Books, Digital Tablet, and Smartwatch.

CFE exam practice question — CFE Question of the Day: Immunity in Investigations

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

Question

During a corporate fraud investigation, a federal prosecutor offers an employee immunity for any testimony she provides to encourage cooperation against a former manager. Which statement best describes the legal effect of this type of immunity?

  • A. She cannot be prosecuted for any offenses discussed in her testimony or for other offenses arising from the same transaction.
  • B. Prosecutors may not use her testimony or evidence derived from it to prosecute her, but may pursue charges based on independent evidence.
  • C. The immunity prevents both criminal prosecution and all civil suits related to the subject matter of her testimony.
  • D. The immunity is effective only if the witness signs a written agreement filed with the court before testifying.
Show the answer and explanation

Correct answer: B. Prosecutors may not use her testimony or evidence derived from it to prosecute her, but may pursue charges based on independent evidence.

The correct answer is that prosecutors cannot use the witness’s testimony or derivative evidence to prosecute her, but they may bring charges if they have independent, preexisting evidence. This describes use and derivative-use immunity. Option A describes transactional (or total) immunity, which bars prosecution for the transaction entirely and is broader. Option C is incorrect because use immunity does not shield a witness from civil suits or from prosecution based on independent proof. Option D is wrong because, while immunity grants are typically documented (often by court order), the defining legal effect depends on the scope of the immunity granted, not solely on a written formality.

Want more practice?

Prepare for the Certified Fraud Examiner (CFE) exam with New Material: CFE 2026 Prep Bundle.