Fraud examiners rely on professional skepticism, investigative judgment and strong analytical skills. But those abilities do not develop in isolation; they are shaped by experience, training and research that helps the profession better understand how fraud is detected and prevented.
The
ACFE Research Institute (ARI) supports scholars who are advancing that knowledge. Recent grant recipients Joe Brazel, Ph.D., and Medina Williams, a doctoral candidate at Purdue University, are exploring different questions that both speak to the future of fraud examination.
Brazel’s research examines how fatigue during audit busy season can affect professional skepticism when fraud red flags appear. Williams is studying how gamification can help students and early career professionals build the critical thinking skills needed to identify fraud.
We asked Brazel and Williams to discuss their recent work, challenges they have encountered and what their research means for fraud examiners.
What is the focus of your current research under the ACFE Research Institute grant? What sparked your interest in this particular area?
Brazel: Our current project examines the effect of busy season (i.e., extensive hours, less sleep) on the application of professional skepticism when a fraud red flag is present. We experimented with practicing financial statement auditors via an audit simulation. We had a sample of auditors go through the simulation during the summer (less fatigued) and a separate sample of auditors go through it at the tail end of their busy season (more fatigued).
The drop in skepticism (e.g., management inquiry, additional testing, informing their audit manager) related to the fraud red flag was dramatic for auditors who were more fatigued.
However, we also examined a solution related to data analysis. We compared visualizations with traditional Excel analysis with the thought that visualizations would aid the tired eyes of auditors fatigued by busy season.
We found that with the aid of both static and interactive visualizations, the skepticism levels of auditors fatigued by busy season increase substantially.
Williams: A prior supervisor, Criston Kudlacik, who is also a Certified Fraud Examiner (CFE), initially piqued my interest in fraud. Over time, through both academic and professional experiences, that interest developed into a fascination with teaching and learning approaches.
A chance reading of one of Dr. Roderick Graham’s posts on the
ACFE discussion board helped spark the idea that eventually led to us applying for an ACFE Research Institute grant.
My current research broadens that work by exploring ways to improve the game my research collaborator and I built to teach fraud examination concepts.
How do you believe your research will contribute to the field of fraud examination and prevention?
Brazel: While most would assume skepticism related to fraud red flags is more difficult when fatigued by busy season, our research quantifies the drop, and the drop is substantial.
We also examine visualizations as a potential solution and offer practitioners a way to cope with fatigue when applying professional skepticism.
Williams: Most young professionals, or those making a career pivot, truly begin to learn their duties and responsibilities on the job. However, the ability to develop and harness fraud-related critical thinking skills should ideally begin beforehand. This can be particularly challenging in a classroom setting because of modality limitations.
Gamification presents a new way to bridge that gap because it is often scenario-based. It can also present an easier way for educators to adapt their current curriculum and help students learn not only the basics but also how and why to apply them.
What are some of the biggest challenges you have faced in your research?
Brazel: I run auditor experiments through simulations of the tasks they perform during financial statement audits. One challenge is making fraud red flags possible to detect without making them obvious; it is a fine line.
We have also experimented with ways to make participants feel the costs of skepticism, such as going over budget or straining relationships with management, in a simulated environment. Over many experiments, we have refined these simulations so that auditors perceive a real cost for further investigating a fraud red flag.
Williams: The biggest challenge is getting the word out that we have developed this tool. Educators typically build course content that is customized to their programs, so it can be challenging to weave new content into existing course requirements.
My current doctoral research aims to help address this by asking students how we can improve the game and the content built around it. The goal is to encourage more instructors, students and users to try the game and provide feedback.
What are the practical implications of your research for fraud examiners?
Brazel: I have done a deep dive into the incentives around professional skepticism, including how it is evaluated and how those evaluations often depend on finding some type of misstatement rather than identifying a reasonable explanation.
We have also identified supervisors on audit engagements who are more likely to reward appropriate skepticism regardless of the outcome. Much of my current research also examines the role of technology, including visualizations, full population testing and artificial intelligence, in the application of professional skepticism when a fraud red flag is present.
Williams: The scenarios used in the game are inspired by real experiences. The goal is to extend the conversation and thought process beyond the game and back into the classroom setting.
Fraud can be an elusive phenomenon. Early in my career, I remember questioning whether something I found truly met the definition of fraud or fraudulent behavior. Having the opportunity to work through similar scenarios earlier would have helped build the confidence needed for continued success in the fraud examination field.
What advice would you give fraud examiners and researchers interested in applying for an ACFE Research Institute grant?
Brazel: Identify a key problem for stakeholders in the fraud detection arena. Then focus on offering and examining solutions that could mitigate that problem.
Williams: Join forces and extend your contacts beyond your immediate circles, whether that means collaborating with individuals who have more academic perspectives or with those who have practical fraud fighting experience.
From a more pragmatic perspective, think about your methodology early and often. Pay close attention to how you will measure cause and effect. Starting with smaller observations can help build momentum for larger findings and conclusions.
There is always a way to extend research and contribute to the fraud literature. Just try. There is a great deal of learning that comes from putting your work out there.
Together, Brazel and Williams’ research highlights a range of questions shaping the future of fraud examination. From understanding how fatigue affects professional skepticism to exploring new ways to develop investigative thinking skills, their work reflects the role research plays in strengthening the profession and preparing the next generation of fraud fighters.
