The number of businesses and firms that need corporate investigators is increasing year after year. A couple of years ago, individuals who wanted to become corporate investigators in the field of accounting would have simply needed to obtain a Certified Public Accountant designation in order to be considered competitive candidates for such a role, while a small percentage of Certified Public Accountants actually specialize in fraud investigation. As a result of the surge caused by the incidents of law enforcement, more and more expert witnesses and companies have started to feel the need to use corporate investigators. One of the most reputed organizations that focus on fraud investigation was created a little over 2 decades ago. Its name is the Association of Certified Fraud Examiners. This organization provides training for aspiring corporate investigators.
In order to become a certified fraud investigator, an individual simply needs to satisfy a couple of standards. The first standard requires the individual to become a member of the Association of Certified Fraud Examiners in good standing. The membership with this association must be paid on an annual basis and enables the individual to be incorporated on the rolls of all other individuals also interested in the study of fraud preclusion. The second standard is that the individual complete an undergraduate education or possess at least 2 years of professional experience in fraud investigation that would count for each year of academic study. This is equivalent to at least 4 years of experience in a field that is considered to be related to fraud. The third standard requires that the individual possess a high moral character and submit 3 referral letters. The fourth standard imposes that the individual agree to abide the Bylaws and Code of Professional Ethics of the Association of Certified Fraud Examiners.
We will only discuss about the first three standards. When it comes to fraud investigation, there are four major areas. The first area is the fraud prevention & deterrence, the second area is the fraudulent transactions & indications that the transactions have been covered up, the third area is fraud investigation, and the fourth area is the legal elements of fraud. The first discipline is the fraud prevention & deterrence. This discipline can teach an individual about the three facets of the fraud triangle. The individual will be taught about the reasons why some people engage in fraudulent activities and about how to prevent fraud from happening. The individual shall also be taught about fraud risk assessment and be instructed about the code of professional ethics of the Association of Certified Fraud Examiners.
The individual must be very careful to observe all the code otherwise they might lose their designation. The second discipline is the fraudulent financial transactions and the signs that those operations have been hidden. The individual will be taught about these two things and will need to figure out both the accounting theory and the auditing theory. The individual will not only receive instruction about what is called the fraud tree but also about the most important types of fraud crimes that are typically committed. In general, fraud crimes have one common factor, which if determined by the individual, can considerably reduce the amount of time spent on an investigation case. Other things such as internal controls, segregation of duties, and other techniques employed to spot fraud activities will also be taught to the person.
The third discipline is the fraud investigation. This basically engages teaching the individual about how to interview and interrogate witnesses and other people knowing about the fraud activity. Fraud investigation also consists of being able to get information from bank statements or public records that can help uncover fraudulent transactions.