Certified Fraud Examiner
Encyclopedia
The Certified Fraud
Examiner (CFE) is a credential awarded by the Association of Certified Fraud Examiners
(ACFE). The ACFE association
is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with more than 55,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession. CFEs have a unique set of skills that are not found in any other career field or discipline; they combine knowledge of complex financial transactions with an understanding of methods, law, and how to resolve allegations of fraud. Fraud examiners are also trained to understand not only how fraud occurs, but why.
In order to become a Certified Fraud Examiner (CFE) one must meet the following requirements:
or equivalent from an institution of higher education
. Two years of professional experience related to fraud can be substituted for each year of college.
Other experience can qualify, but must be reviewed for applicability.
The CFE Exam covers the following four areas:
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
Examiner (CFE) is a credential awarded by the Association of Certified Fraud Examiners
Association of Certified Fraud Examiners
Established in 1988 the Association of Certified Fraud Examiners is the professional organization that governs professional fraud examiners. Its activities include producing fraud information, tools and training. It also governs the professional designation of Certified Fraud Examiner...
(ACFE). The ACFE association
Professional body
A professional association is usually a nonprofit organization seeking to further a particular profession, the interests of individuals engaged in that profession, and the public interest.The roles of these professional associations have been variously defined: "A group of people in a...
is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with more than 55,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession. CFEs have a unique set of skills that are not found in any other career field or discipline; they combine knowledge of complex financial transactions with an understanding of methods, law, and how to resolve allegations of fraud. Fraud examiners are also trained to understand not only how fraud occurs, but why.
In order to become a Certified Fraud Examiner (CFE) one must meet the following requirements:
- Be an Associate Member of the ACFE in good standing
- Meet minimum academic and professional requirements
- Be of high moral characterMoral characterMoral character or character is an evaluation of a particular individual's durable moral qualities. The concept of character can imply a variety of attributes including the existence or lack of virtues such as integrity, courage, fortitude, honesty, and loyalty, or of good behaviors or habits...
- Agree to abide by the Bylaws and Code of Professional EthicsEthical codeAn ethical code is adopted by an organization in an attempt to assist those in the organization called upon to make a decision understand the difference between 'right' and 'wrong' and to apply this understanding to their decision...
of the Association of Certified Fraud Examiners
Academic Requirements
Generally, applicants for CFE certification have a minimum of a bachelor's degreeBachelor's degree
A bachelor's degree is usually an academic degree awarded for an undergraduate course or major that generally lasts for three or four years, but can range anywhere from two to six years depending on the region of the world...
or equivalent from an institution of higher education
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
. Two years of professional experience related to fraud can be substituted for each year of college.
Professional Requirements
At the time of certification, at least two years of professional experience in a field either directly or indirectly related to the detection or deterrence of fraud is required. The ACFE recognizes the following areas as qualified professional experience:- Accounting and auditAuditThe general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...
ing - CriminologyCriminologyCriminology is the scientific study of the nature, extent, causes, and control of criminal behavior in both the individual and in society...
and sociologySociologySociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
(sociology is acceptable only if it relates to fraud.) - Fraud investigation
- Loss prevention (experience as a security guardSecurity guardA security guard is a person who is paid to protect property, assets, or people. Security guards are usually privately and formally employed personnel...
or equivalent is not acceptable) - LawLawLaw is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
relating to fraud
Other experience can qualify, but must be reviewed for applicability.
Moral Character
The ACFE will require references attesting to one's character before granting the certificate.Adhere to the Code of Ethics
Per the ACFE website, the code of ethics states that a Certified Fraud Examiner shall:- Demonstrate a commitment to professionalism and diligence in his or her duties.
- Not engage in any illegal or unethical conduct, or any activity which constitutes a conflict of interestConflict of interestA conflict of interest occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other....
. - Exhibit the highest level of integrity in the performance of all professional assignments and will accept only assignments for which there is reasonable expectation that the assignment will be completed with professional competence.
- Comply with lawful ordersCourt orderA court order is an official proclamation by a judge that defines the legal relationships between the parties to a hearing, a trial, an appeal or other court proceedings. Such ruling requires or authorizes the carrying out of certain steps by one or more parties to a case...
of the courtCourtA court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
s and testify to matters truthfully and without biasBiasBias is an inclination to present or hold a partial perspective at the expense of alternatives. Bias can come in many forms.-In judgement and decision making:...
or prejudice. - Obtain evidenceEvidenceEvidence in its broadest sense includes everything that is used to determine or demonstrate the truth of an assertion. Giving or procuring evidence is the process of using those things that are either presumed to be true, or were themselves proven via evidence, to demonstrate an assertion's truth...
or other documentation to establish a reasonable basis for any opinion rendered. No opinion shall be expressed regarding the guilt or innocence of any person or party. - Not reveal any confidential information without proper authorization.
- Reveal all pertinent material matters discovered during the course of an examination.
- Continually strive to increase the competence and effectiveness of professional services performed under his or her direction.
Examination
The CFE Exam consists of 500 questions divided into four sections: Fraud Examination and Investigation, Criminology and Ethics, Financial Transactions, and Legal Elements of Fraud. Each question has a time limit of 75 seconds, and each section contains 125 questions.The CFE Exam covers the following four areas:
- Fraud Prevention and Deterrence - Tests your knowledge of why people commit fraud and what can be done to prevent it. Topics covered in this section include crime causation, white-collar crime, occupational fraud, fraud prevention, fraud risk assessment, and the ACFE Code of Professional Ethics.
- Financial Transactions - This section tests your knowledge of the types of fraudulent financial transactions incurred in accounting records. To pass this section, you will be required to demonstrate knowledge of these concepts: basic accounting and auditing theory, fraud schemes, internal controls to deter fraud and other auditing and accounting matters.
- Fraud Investigation - This section includes questions in the following areas: interviewing, taking statements, obtaining information from public records, tracing illicit transactions, evaluating deception and report writing.
- Legal Elements of Fraud - This section ensures that you are familiar with the many legal ramifications of conducting fraud examinations, including criminal and civil law, rules of evidence, rights of the accused and accuser and expert witness matters.
Notable CFEs
http://www.acfe.com/about/board.asp- Joseph T. Wells, founder and chairman of the Association of Certified Fraud ExaminersAssociation of Certified Fraud ExaminersEstablished in 1988 the Association of Certified Fraud Examiners is the professional organization that governs professional fraud examiners. Its activities include producing fraud information, tools and training. It also governs the professional designation of Certified Fraud Examiner...
- Cynthia Cooper, whistle blower of the WorldCom accounting scandal
- Harry MarkopolosHarry MarkopolosHarry M. Markopolos is a former securities industry executive and independent financial fraud investigator for institutional investors and others seeking forensic accounting expertise. He has received public acclaim for uncovering evidence over a period of nine years that Bernard Madoff's wealth...
, whistle blower of the Bernard MadoffBernard MadoffBernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S...
scandal