Because information technology has made white collar crimes like fraud easier and faster, certified fraud examiner certification has become popular with business management, finance and forensic accounting professionals working in all industries. The certified fraud examiner (CFE) credential is administered by the Association of Certified Fraud Examiners (ACFE). Industry professionals usually join ACFE to gain more education about fraud identification and prevention through the organization’s training courses, publications, webinars and conferences. ACFE members in good standing, who have at least an undergraduate degree and two years of relevant professional experience, are eligible to sit for the CFE certification exam. Here are the main knowledge areas covered on the CFE certification exam.
Fraudulent Schemes and Financial Transactions
While the ACFE is open to all professions, the exam and associated training primarily covers the identification and deterrence of fraud pertaining to financial and accounting activities. For instance, the exam tests ACFE members’ knowledge of the generally accepted accounting principles that include standard financial statement reporting and ledger keeping. ACFE members successfully pass the Fraudulent Schemes section of the CFE certification exam by being familiar with common financial schemes like embezzlement, money laundering, securities fraud and misappropriation of assets.
Legal Statutes and Regulations
The main objectives of fraud examination are to detect fraudulent activities and help bring those involved in the crimes to justice. However, fraud examiners must operate within certain regulatory constraints during the investigative process to protect everyone’s legal rights. The Legal section within the CFE certification exam tests ACFE members’ knowledge of the laws associated with conducting fraud examination. Aspiring CFEs must also demonstrate familiarity with the legal processes and the court systems used to convict white collar criminals.
Fraud Identification and Investigation
Fraud examiners do not rely on guess work or haphazard investigative activities to uncover and prevent fraud. These professionals use systematic procedures and techniques to conduct their fraud examinations. Common tools used by fraud examiners are fraud examination checklists and sample fraud examination reports; these tools help to ensure that fraud examinations are thorough and legal. The types of fraud that examiners uncover are internal, external and fraudulent crime against individuals. Internal fraud happens when a business entity is robbed in some way by its own employees; external fraud is when vendors or customers cheat the business. Fraud examiners often discover fraudulent activities against individuals when they investigate Ponzi and pyramid schemes disguised as multi-level marketing businesses.
The duties of fraud examiners do not end with identifying and reporting white collar crimes. These professionals often help their employers to strengthen their defenses against fraudulent activities. This part of the CFE certification examination covers the psychology of white collar crimes. Fraud examiners gain clear insight into the motivations of white collar criminals, and this insight enables them to generate plans to protect companies from all types of future fraudulent activities. These fraud prevention planning efforts include fraud risk assessment and management. The ACFE exam tests members’ familiarity with the fraud triangle that helps explain why people commit white collar crimes; this triad includes financial pressure, rationalization and opportunity. The ACFE exam also tests members’ knowledge of the organization’s code of ethics in the Fraud Prevention section.
An industry professional may become interested in the fraud examiner certification after the company for which they work experiences costly ethical failures. Others view the certified fraud examiner certification as a way to position themselves within a high growth career.