CPA, CFF, CFE, CFI….say what?

If you get an email or a business card from a forensic accounting professional, you might see a bunch of credentials behind their name. But what do they all mean? Here is a brief description for some of the most common forensic accounting related professional credentials:

  • Certified Fraud Examiner (CFE) – CFEs resolve allegations of fraud, obtain evidence, conduct interviews, write reports, testify to findings and assist in the prevention and detection of fraud.

 

  • Certified Public Accountant (CPA) – CPAs are accounting professionals who have passed the CPA examination and have also met additional state certification and experience requirements.

 

 

  • Certified Forensic Interviewer (CFI) – CFIs conduct a variety of investigative interviews with victims, witnesses, suspects or other sources to determine the facts regarding suspicions, allegations or specific incidents.

Additional certifications that are common for forensic specialists include the following:

 

  • Certified Financial Crimes Investigator
  • Accredited in Business Valuation (ABV)
  • Certified Valuation Analyst (CVA)
  • Private Investigator
  • MBA in Fraud Management and Economic Crime
  • Seized Computer Evidence Recovery Specialist
  • Certified Handheld Forensic Examiner
  • Certified E-Discovery Specialist (CEDS)
  • Encase Certified Forensic Examiner (EnCE)
  • AccessData Certified Examiner (ACE)
  • Certified in Risk and Information Systems Control (CRISC)
  • Certified Information System Security Professional (CISSP)
  • Certified Information System Manager (CISM)

Segregation of Duties. What is that?

When one person controls multiple phases of accounting transactions (i.e. accounts payable, payroll, accounts receivable, etc.), the opportunity for fraud in the workplace significantly increases.

By involving at least one other person in the transaction, the risk of fraud can be greatly reduced. According to the Association of Certified Fraud Examiner’s Report to the Nation, the presence of anti-fraud controls such as segregation of duties are associated with reduced fraud losses.

Accounting processes are divided into three separate phases:

  1. Authorization (requires an employee to direct another employee to initiate a transaction)
  2. Custody (the actual possession of the asset)
  3. Recording (adjusting accounts to reflect the transaction within the accounting records)

The “ARC” duties should be se segregated so an employee doesn’t have responsibility for more than one phase (authorization, custody and/or recording) within an accounting process.

What’s next? Do I need an audit? Who can help me?

You find yourself in a bad situation – you are concerned that an employee has taken advantage of your organization and mishandled company funds. Now what? Do you need to bring in auditors? What is the different between an audit and one of those, what do you call it, fraud examinations?

Financial audits are recurring reviews of financial statements. They provide an independent opinion on whether financial statements are presented fairly but are NOT designed to detect fraud. Often they are completed to give a level of comfortability to stakeholders.

If you are looking to answer the questions of whether fraud has occurred or is occurring, who might be responsible, what amount was taken and having documentation prepared to move forward, you need a fraud examination. Fraud examinations are nonrecurring examinations of financial records designed to detect fraud and resolve specific allegations, without any opinion on financial statements.

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