Table of Contents
Why Become a Fraud Examiner?
Since our lives have migrated to the online arena, fraud has expanded at a rapid pace. Current estimates show that fraud is costing the economy $600 billion each year. This means that there is an increased demand for risk watchdogs, to ensure that public and private entities don't fall prey to bad actors. This demand has been fueled in no small part by the creation of the Consumer Financial Protection Bureau (CFPB). Accountants who wish to specialize their practice should consider becoming certified fraud examiners through the Association of Certified Fraud Examiners.
The ACFE certification provides accountants with a way to identify themselves as experts in the field of fraud examination. In fact, the credential opens up a variety of career choices. CFEs are found working for the government and private industry with career paths such as compliance officer, forensic accountant, internal/external auditor, private investigator, and even law enforcement. There are even top-level executive positions available for CFEs including chief compliance officer, chief risk officer, and audit executive.
What Is a Fraud Examiner?
A fraud examiner is a sort of accountant who is an expert in uncovering and rooting out fraud and the bad actors who perpetuate that crime. They are specially trained and certified to detect, investigate, and conclude fraud cases. Their work helps to protect consumers and corporations to avoid losing precious revenues to fraudsters. They also work with the authorities to make sure that they have the evidence they need to try the perpetrators in a courtroom.
What Does a Fraud Examiner Do?
A certified fraud examiner is a professional who is a white-collar, office worker with special training in discovering, investigating, and resolving fraud cases. They are found working for a variety of employers and some even work independently. In fact, CFEs may be found working for law enforcement, corporations, and as private investigators.
CFEs who work in law enforcement might primarily work on their computers in an office. However, they might also spearhead investigations in which they are called upon to collect evidence from various sources, interview suspects, brief undercover agents, and otherwise perform the duties of a detective. Sometimes, CFEs work undercover to collect evidence and uncover suspected fraud. CFEs are found in all areas of law enforcement including the federal, state, and local level.
CFEs in the corporate environment often scrutinize their employer's books to discover any possible cases of embezzlement or other theft. In these positions, CFEs are often referred to as auditors. Many fraud examiners work as forensic accountants who analyze financial data to investigate possible money laundering, insurance fraud, embezzlement, and more.
Private investigators and attorneys often employ CFEs as a way to uncover how their clients may have been defrauded by way of financial malfeasance. Many divorce cases, for instance, require that a CFE discover where certain assets and equities may have gone. In fact, a CFE might attain an additional credential to operate as a private investigator and establish a practice centered on forensic accounting and fraud investigations.
Requirements to Become a Certified Fraud Examiner
In order to sit for the ACFE examination and become a certified fraud examiner, candidates must first be members of the association in good standing and have a bachelor's degree or equivalent experience. That is to say, candidates can substitute experience for a college education. To satisfy this requirement, each missing year of a four-year degree is worth two years of experience. Thus, a candidate who has never completed any college should expect to document eight total years of experience in the field. It is therefore more expedient for aspiring CFEs to study for a degree than to accrue experience. In fact, there are many programs that offer specialized courses in forensic accounting and related topics.
The CFE examination covers the four primary areas of a fraud examiner's professional life:
If, for some reason, a candidate cannot satisfy the technical requirements and thus needs to take the test in person, arrangements can be made. The ACFE conducts in-person review courses throughout the year. Candidates can take the course and then complete the exam in a proctored environment. The ACFE's calendar reflects available dates.
How is the Certified Fraud Examiner Exam Scored?
To pass the certified fraud examiner exam, takers must pass all four parts with a score of 75% or better. This score is calculated by computer and results are returned to candidates within 3-5 business days of the test. Even review course attendees receive their results in this time frame. All candidates have three chances to pass each portion of the exam.
Note that each of the four parts take two hours to complete, so examinees should set aside a full day for the exam. If a retake is necessary, candidates can request a new test and they will receive a key for the new test within 3-5 business days. Note that the ACFE does not provide review for incorrect responses.
Study Resources and Preparation for the Fraud Examiner Exam
The ACFE provides ample resources for its members to prepare for the certification examination. Perhaps the most common test preparation method is the computer based CFE Exam Prep Course. This course can be taken at the candidate's leisure and thus does not require any special travel or time out of one's schedule. Another option is to purchase the deluxe CFE Exam Prep Toolkit that includes the Prep Course plus other resources such as the Fraud Examiners Manual, a test-prep flashcard app, and the CFE Exam Study Guide.
For those who prefer the structure and focus of an in-person session, the AFCE offers four-day training sessions that includes the opportunity to take the exam with a live proctor. Official AFCE sessions are limited to select cities in the United States. In a recent year, there were three sessions scheduled, one each in Washington, D.C.; New York City; and Austin, TX. Candidates outside of the US can take the course through authorized, independent third parties in major cities throughout the world. Attendees who are eager may take the exam on the first day of the course.
As if that weren't enough, the AFCE offers additional resources that help future CFEs prepare for their exam. The CFE Exam newsletter, for instance, provides study tips, motivators, and other guidance to help ensure a passing score on the professional exam. There are other resources available online, such as the CFE Exam Prep LinkedIn page, which is loaded with tips and tricks. The ACFE also maintains an online community full of discussions related to the test, and more.
The CFE examination is not considered to be terribly difficult. However, most in the field do suggest that potential examinees purchase study courses and other materials in advance of their test. While some take as much as a full year to prepare, including four months of intensive study, others follow the guidelines set forth in the study guides and complete their preparation in either 30, 60, or 90 days, depending on their individual need.
Perhaps the more difficult part of attaining CFE credentials is the education and experience portion. That is, aspiring CFEs will need to spend a minimum of four years in college or up to 8 years in the field working in fraud and risk. Consider that some CFEs start out with a two-year associate degree in accounting and then work for four years prior to attaining their credentials.
It is not necessarily cheap to become a CFE. All candidates must first pay dues to become members of the ACFE. To satisfy the experience or educational qualifications, future examiners spend either many thousands on a bachelor's degree or are able to land a job in fraud examination and thus spend their time and energy to qualify. Prior to sitting for the exam, candidates will want to purchase preparation materials or attend a traditional classroom course.
The fees for these options are as follows:
Career & Salary
Where Might You Work?
Certified fraud examiners work in a variety of environments. Some may work for federal law enforcement agencies such as the FBI and investigate high-level corruption such as money laundering in casinos, organized crime, and other offenses. Others might work for state or local law enforcement, private-sector corporations, or as private investigators.
Some CFEs work independently as investigators and contract with attorneys or individuals who may feel that they have been defrauded. These professionals can then work from their own offices or even their own homes. Independent CFEs may even be called to audit a company's books and then may spend that time working in the client's offices.
Unfortunately, financial malfeasance seems to be on the rise. However, this is good news for fraud examiners who are seeing growth in their field. The Bureau of Labor Statistics does not specifically address fraud examiners, but the Occupational Information Network (OIN) shows that the field of financial specialists is slated to grow along with the economy, or 4-6% between the years 2018-2028.
The salary figures for financial specialists is likewise healthy with OIN reporting a median salary of $82,000 in 2019. Future CFEs should keep in mind that salary figures often omit other parts of a professional's compensation package. Bonuses, health insurance packages, and travel expense reimbursements may add significantly to one's overall income picture. Furthermore, CFEs who work independently may report their income under different employment classifications, such as consultant.
According to the AFCE, who surveyed 5,678 examiners, their certified professionals earn 31% more than their non-certified peers. This can calculate to total career earnings that exceed non-CFEs by as much as $600,000. AFCE members can request more detailed career reports for specific job descriptions through their website.
Certified fraud examiners have a wide range of career paths to choose from.
Here is a brief list of the opportunities that open up for credentialed examiners: