Frequently Asked Questions

What is a Certified Fraud Examiner?

Certified Fraud Examiners are experts in the prevention, detection, and investigation of fraud.  The CFE credential is the most preferred certification for anti-fraud professionals in the world.  Currently, there are over 15,000 CFE’s actively fighting fraud worldwide, at all levels of business and government.  Fraud examiners have a unique set of skills that are not found in any other discipline; they combine knowledge of complex financial transactions with an understanding of investigation, law, and how to resolve allegations of fraud.  Fraud examiners are also trained to understand not only how fraud occurs, but why.
The CFE process focuses on four bodies of knowledge critical to the fight against fraud: Financial Transactions, Investigation, Law, and Criminology.  CFE’s have the ability to:

• Understand how fraud is committed and how it can be identified;
• Examine books and records to detect and trace fraudulent transactions;
• Interview suspects to obtain information and confessions;
• Write investigation reports, advise clients as to their findings, and testify at trial;
• Be well-versed in the law as it relates to fraud and fraud investigations; and
• Understand the underlying factors that motivate individuals to commit fraud.

What are some red flags regarding employee theft?

These are just some of the common denominators present in employee theft cases:

Tips or complaints from other employees or outsiders regarding a certain employee.
Employee is living extravagantly relative to his/her known income level.
Unexplained amounts of overtime by a certain employee.
Employees who have been dishonest with current or previous employers.
Employee does not take vacations or never misses work.
Overworked employee will not allow others to help with his/her work.
Custodian of financial records is overly protective of them.
Changes in behavior, such as increased drinking or moodiness.
Employees with substantial amounts of personal debt.
Employees who gamble on a regular basis.
Business is inexplicably unprofitable.
Company is having cash flow problems.
The "books" are out of balance.
Unexplained inventory shortages or adjustments.
Subsidiary account balances do not reconcile to corresponding control accounts.
Unexplained end-of-period adjusting entries.
Financial statement trends/ratios do not make sense.
Related-party assets on the financial statements.
Excessive credit memos.
Check register has been tampered with. (ex. entries whited out)
Source documents for payments made cannot be located.
Missing deposit slips and/or canceled checks.
Excessive written off accounts receivable.
Requested financial records cannot be produced upon demand.
Excessive sales voids.
Source documents, such as vendor invoices which are clearly atypical.
Reimbursements are not supported by receipts or other source documents.
Background checks on key employees are not conducted.
The company considers internal controls to be unnecessary "red tape."
A single employee controls the company checkbook.
Lack of proper authorization and/or independent checks.
Internal controls are either non-existent or not enforced.
Invoices are paid without verifying receipt or purchase authorizations.
Company credit cards are not adequately controlled.