FraudJournal Blog

March 23, 2013

“What’s your fraud IQ” (Journal of Accountancy) Mar1.2013


The recent news articles and discussions regarding the over testing or improper testing of students to measure their progress in the basics brought to mind how much education each of us as fraud fighting professionals maintain to continue our professional certifications; those lovely alphabet letters that follow our name. As a fraud fighter, I tend to feel that these letters mean little without the experience and ability to apply said education to my professional work. I could have lots of alphabet soup after my name, but without the ability to apply this knowledge to each case and think outside of the testing box, I have just become adept at passing tests. Which brings me to my point, and I do have one, once we take the path to become credentialed, how do we know we are or have maintained our ‘fraud IQ’?

The ongoing issues regarding the students’ continual testing and preparation for the testing are important; “when does an education become a required process instead an education of how to apply knowledge?”  And so I ask myself, am I honestly building my skill sets or am I just meeting my requirements to maintain my CPE credentials. If tested, would the result be a true measurement of my abilities or instead my ability to accurately recall information. Can you accurately measure an individual’s ability to apply information by the methods of current testing?

I think the article of “Whats your fraud IQ” posted in the Journal of Accountancy dated March 1, 2013 is an interesting way to find out how you test. How would you approach these questions? How would you redesign this test? How much do you really remember? Should CFEs test like Auditor’s – in case work scenarios? What to do you think? Talk amongst yourselves.

 

March 12, 2013

Should Forensic Accountants Be Considered Private Investigators?


I must say it is nice to see Forensic Accountants become acknowledged by the general public as a potential solution to detecting, defending and even more importantly deferring, as much as possible, fraudulent behavior in the workplace and home. Even shows such as NCIS have given a nod, however slightly, to Forensic Accountants (often noted as FA). Most Certified Fraud Examiners (CFE) have some working knowledge of accounting and this has become more emphasized in our annual training. And many private investigators have to review financial information in order to follow through with their engagements with clients. Which brings me to my question for the general fraud community, should Forensic Accountants become Private Investigators and licensed within their state as is required by some states.

While most states have specific regulations that professionals who “investigate” as a profession must be registered and licensed as private investigators, FAs and CFEs for the most part have not been included in this group. Recently, private investigators have raised their voices to urge any and all individuals that claim to or state they investigate be required to follow state law and become licensed as a private investigator.

I agree that investigative work requires knowledge of state laws and regulations to keep both investigator and the general public safe from unqualified professionals looking to merely increase revenue and try out new trends of services. CFEs are required by the Association of Certified Fraud Examiners (ACFE) to maintain training and must pass a 4-part exam and submit recommendations prior to being allowed to take the exam. This includes: Investigation, Financial Transactions, Criminology, Law.

Having said this, many CPAs have become FAs in order to build a more diversified portfolio of services such as fraud prevention, fraud risk consultations and forensic accounting. I do have concerns with CPAs who provide forensic accounting services that are not CFEs. Not because they are educationally lacking in work financial knowledge or work experience, but there are legal ramifications to consider when performing investigative accounting. The rights of both sides of the case, claimant and defendant, have legal rights of process and must be acknowledged according to the rules and regulations of the law.

And so I ask, “Should Forensic Accountants and Certified Fraud Examiners be considered Private Investigators”, and if so, “Should Private Investigators be required to be certified in bookkeeping or accounting 101 before handling financial case work”? There is the opportunity to collaborate in wonderful ways, but do we think this will be the end result or is this a turf war? The question has some merit. What do you think?

 

Create a free website or blog at WordPress.com.