BOYD
Forensic
Accounting
& Investigation
Certified Fraud Examiners
Certified Public Accountants
5501 Highway 280
Birmingham, AL 35242
Tel: 205.991.5506
Fax: 205.991.5450
E-mail Us
FREQUENTLY ASKED QUESTIONS
What is a CFE designation? Certified Fraud Examiner (CFE)
Who sets the standards for CFE certification?
What is the CFE Code of Professional Ethics?
These FAQs are specific to audits -
Q: How is an area selected to be audited?
Q: What happens during an audit?
Q: Who audits the auditors?
Q. What kinds of Fraud are currently out there?
Q. What is Corporate Fraud?
Q. What is Securities Fraud?
Q. What is Investment Fraud?
Q. What is Consumer Fraud?
Q. What is Identity Theft?
Q. What is the difference between Fraud Examination and Forensic Accounting?
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Q. What is a CFE designation? CERTIFIED FRAUD EXAMINER (CFE)
A. A Certified Fraud Examiner (CFE) is a specialist educated and trained in the detection and deterrence of a wide variety of white-collar crimes. All CFEs must meet the rigorous criteria for admission to the Association of Certified Fraud Examiners. Thereafter, they must exemplify the highest moral and ethical standards and must agree to abide by the Association's code of Professional Ethics.
The CFE designation is a statement of applied competence in the field of fraud examination. Successful completion of the CFE Exam is an affirmation of one's ability to conduct complete, efficient, thorough, and ethical fraud investigations. Members of the Association specialize in a wide range of fields, including fraud investigation, criminology, internal and external auditing, loss prevention and security, forensic accounting, law, law enforcement, investigation at the local, state, and federal levels, education, and others, as well as students of these fields.
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Q. Who sets the standards for CFE certification?
The standards are set by the ACFE's Board of Regents, who are elected by CFE members and drawn from our most experienced members.
Q: How is an area selected to be audited?
A: Risk Analysis - The Office of Internal Audits has developed a risk measurement process for use in constructing annual audit plans. Areas are selected for review based on several risk factors such as financial loss potential, regulatory compliance, size and complexity of operations, prior audit recommendations, time since last audit, etc... The annual audit plan is approved by the Finance and Audit Committee of the Board of Regents.
Special Projects - These projects are audits or investigations that are conducted upon request. These include specific requests by administration, departmental request, and investigations based on information obtained from various sources.
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Q: What happens during an audit?
A: Notification Letter - With a few exceptions, auditees are notified in writing when their area is selected for an audit. The notification letter states the objectives of the audit and estimated start date. Due to the nature of some audit work, there may be little or no advance notice.
Entrance Conference - An entrance conference is scheduled with the auditee to discuss the purpose and scope of the audit. This may also be accomplished via telephone if the auditee so desires. Auditees are encouraged to discuss any concerns or questions they may have about the audit at this time.
Together, the auditee and the auditors determine the departmental personnel and physical facilities needed to conduct the audit
Audit Work - It will often be necessary for the auditors to be in the auditees area to review records and conduct interviews of appropriate personnel. The interviews are necessary for the auditor to become familiar with the auditees operations and procedures. Written policies and procedures may also be requested to aid the auditor in understanding the operations.
The duration of the audit will vary depending upon its nature and scope. Limited scope audits may take only a week or two, while broad scope audits may take several months. The level of cooperation received from the auditee also has a bearing on the duration of the audit. Timely access to personnel and records is important for the prompt completion of our audit work.
Communicating Results - The results of the audit are communicated to the auditee via verbal communication, informal letters to the auditee, or a written audit report (in draft form). The purpose of the written audit report is to present the audit objective, scope, methodology, results, and recommendations of the audit. Audit recommendations are intended to improve the operations of the auditee and the company.
Exit Conference - An exit conference is held to discuss the written audit report (in draft form) and provides an opportunity to resolve any questions or concerns the auditee may have about the audit recommendations and to resolve any other issues before the final audit report is released. Those attending usually include the auditors and the Vice President, Chairperson, and/or Director, as well as anyone from the audited area that the auditee wishes to invite. After the exit conference, the auditee will be required to provide to the auditors their written management's responses to the audit recommendations to be included in the final audit report.
Final Audit Report - The final audit report will include the audit objective, scope, methodology, results, recommendations, and management's responses.
Follow-up Review - There will be occasions when action to resolve a recommendation will not be accomplished until after the audit work is completed. Professional standards require follow-up and reports on previously reported audit recommendations to determine whether corrective action was taken as planned by the auditee.
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Q: Who audits the auditors?
A: The Office of Internal Audits is not immune to being audited. Members of the State Auditor's Office annually review internal audit activity. In addition, every three years, a team of auditors from outside performs a Quality Assurance Review as required by law.
Q. What kinds of Fraud are currently out there?
There are numerous kinds of fraud in current society. Here are the common types of fraud: misrepresentation of material facts, concealment of material facts, bribery, illegal gratuities, conflicts of interest, embezzlement, theft of trade secret, mail fraud, wire fraud, false claims and statements, conspiracy, bankruptcy fraud, financial institution fraud, identity theft, health care fraud, computer fraud, telemarketing fraud, economic espionage, and money laundering.
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Q. What is Corporate Fraud?
When a corporation deliberately conceals or skews information to appear healthy and successful before shareholders, it has committed corporate or shareholder fraud. Corporate fraud may involve a few individuals or many, depending on the extent to which employees are informed of their company’s financial practices. Directors of corporations may fudge financial records or disguise inappropriate spending. Fraud committed by corporations can be devastating, not only for outside investors who have made share purchases based on false information, but for employees who, through 401ks, have invested their retirement savings in company stock.
Q. What is Securities Fraud?
Securities fraud occurs when an individual or entity acts in an attempt to illegally manipulate the investment market. Securities fraud may be committed by broker/dealers, financial advisor/analysts, corporations, and private investors. Renewed concern over securities fraud arose during the recent telecom bust. Investors lost millions on Internet companies that had gone from being highly rated and seemingly secure to bankrupt in a phenomenally short period of time.
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Q. What is Investment Fraud?
Investment brokers, advisors, and analysts may commit investment or brokerage fraud in an effort to control the market or lure business. The following activities are considered investment fraud when done intentionally:Analysts who advised against their research during the telecom bust have faced investigations from the SEC and other state and federal regulators.
- Giving biased investment advice
- Giving unfounded advice
- Offering separate clients contradicting advice
- Advising clients to continue an imprudent risk
- Advising out of a conflict of interest
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Q. What is Consumer Fraud?
Consumer fraud includes a large range of improper practices relating to any part of the advertising, the marketing, the selling, and the provision of services and/or goods.Q. What is Identity Theft?
Identity Theft is when someone illicitly obtains personal information about someone else for the purposes of impersonating them. This is often done for financial gain by creating debt for the victim, but can also be used to commit crimes using the assumed identity.Q. What is the difference between Fraud Examination and Forensic Accounting?
Fraud examination and forensic accounting are distinct but somewhat related. Forensic accounting work is done by accountants in anticipation of litigation, which can include fraud, bankruptcy, valuation, and other professional accounting services. On the other hand, fraud examinations can be conducted by either accountants or non-accountants, and refer only to anti-fraud matters.
More Details and Some Specific Cases in the Industry News section
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Fraud Experience and Cases - Click here
Contact Us for References
Please call us at: Tel: 205.991.5506
