Guest Author - Consuelo Herrera, CAMS, CFE
Fraud and its pervasive effects open doors for forensic accountants to excel.
Fraud has undermined earnings and efforts in corporations worldwide. Its effect is so pervasive that one could safely say that every organization has been victimized even when amounts are not material enough to merit an investigation. The 2008 Report To The Nation issued by the Association of Certified Fraud Examiners, ACFE estimates that US organizations lose 7% of their annual revenues to fraud, an estimate of $994 Billion!
Every day, the news bombards us with a multitude of headlines of wrongdoings and fraud situations that have been uncovered. The spectrum is so broad it reaches governmental entities, successful and profitable corporations, not-for-profit organizations, and the list continues. The types of fraud range from bank fraud, securities fraud, mortgage fraud, health insurance fraud, to corporate fraud at all levels. Not a day goes by without a case being brought to light by investigators. What about those that remain in the shadow?
Sadly many organizations decide forego their rights to recover losses or to the restitution of the money lost because their owners do not want the exposure and the embarrassment that comes when they realize the weakness of their internal controls and how na´ve they were, when blindly trusting those employees that were empowered to be omnipresent in their corporations.
Concerned with the toll that fraud has charged to corporations in America, regulators in partnership with educational institutions are promoting fraud awareness and instilling in the business community the drive for a new mindset that prevents fraud rather than undergoing costly investigations to detect it.
Globally, business schools are in hurry to develop curricula that cover the areas where accountants should acquire strong knowledge such as investigation techniques, investigative audit, business law, and analysis further than regular analysis of financial statements.
Firms of Certified Public Accountants are seeking qualified candidates to fill the void. Those candidates ideally should have credentials that enable them to be ready for taking over a fraud investigation. The CFE, Certified Fraud Examiner, is a well-known designation earned through fulfilling academic, expertise, and ethical requirements in addition to passing a rigorous four-part exam.
The American Institute of Certified Public Accountants, AICPA, issued the latest designation in the market that arose as a response to the demand for qualified forensic accountants. The CFF, Certified Financial Forensics seems to be a successful step to equip businesses with qualified accountants that will see beyond the numbers. They will see where others do not see, and, what others do not see.
The opportunity is open and the need ready to be served. The business community, scholars, and regulators must come together with the same goal to achieve: prevent and deter fraud and minimize its pervasive effect.
The Association of Certified Fraud Examiners web page at www.acfe.com has excellent material regarding fraud prevention detection