FraudJournal Blog

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?

 

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August 24, 2010

Fraud & Forensics: Times are changing…are we?


Most of you are familiar with the CSI shows on television. And you have read articles on fraud examiners catching the Madoff’s of the world lately, but most of you don’t know the process forensic accountants, fraud examiners, and law enforcement go through to quantify or qualify the information for their clients and the court. It’s not a glamorous process and it doesn’t happen in sixty minutes let alone sixty days. It’s a tedious and detail oriented process that requires pulling hundreds if not thousands of bits of information into one historical reference, and the process has been in place for a very long time. But Dylan was right, times they are a-changing.

The recent shifts in technology have made the amount of data exponential, and this means the time to manage and analyze have also become exponential. Cases now span years instead of months. Imagine an embezzlement case over five years with one hundred clients and their historical information. So how do you provide your clients with a work product using what I call the F.E.E. principle: Focused, Efficient & Effective?

In my usual internet nosing around I found this article “Follow the Money – Find the Fraud” by Tracy L Coenen, at Sequence Inc from the Wisconsin Law Journal, written by Tracy Coenen, CPA, CFF in June of this year. It’s a¬†article about how we each must consider the complexity of our case. What are we faced with? How can we wade through mounds of documents and data and deceptive efforts to get to the facts and then put all of that into a format that educates the facts to both judge and jury. I think this article will help you ponder this thought and hopefully consider some new ideas. There is a lot out there to choose from, but in the end it is about the truth and the best and most efficient way to get to that truth. Facts speak loud, but they rarely shout ‘here I am’.

I would also like to add that technology does NOT replace the ability to interview and investigate, but it does allow us to more efficiently get to the facts to build a case and prepare that case for litigation. Remember, fraud examination and forensic accounting is not about technology it’s about the truth of the situation; the prima facie evidence necessary to present a case if you choose to go to trial.

TIP: CFF means Certified in Financial Forensics – see link above.

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