The Board of Regents, representative of the rich diversity of the ACFE membership, contemplate the profession as the ACFE celebrates its 25th anniversary.
A smorgasbord of talent. That’s how Board of Regents member Michelle Brown, CFE, describes the board and the ACFE. “Whether the angle is education, law enforcement, accounting or law — we all bring to the table a common theme of deterring fraud. … That’s one of the great things about the ACFE.”
As we begin celebrating the 25th year of the ACFE, Fraud Magazine invited the board members to a relaxed, lively roundtable discussion at the 24th Annual ACFE Global Fraud Conference to consider the future of the fraud examination profession and the association that largely created it.
Representing three continents and several industries, the board discussed ways to train and encourage budding fraud examiners, the care and feeding of whistleblowers (or sentinels as the ACFE calls them), fraud deterrence and return on investment, C-suite responsibilities, fraudsters’ new methods and developing a passion for fighting fraud, among other topics.
Participants included: Richard G. Brody, Ph.D., CFE, CPA (vice chair), Douglas Minge Brown Professor of Accounting, University of New Mexico Anderson School of Management; Michelle Brown, CFE (treasurer); principal, Verizon Business; Roger Darvall-Stevens, MBA, MA, CFE (secretary), partner, Ernst & Young, Fraud Investigation & Dispute Services, Melbourne, Australia; ACFE Vice President and Program Director Bruce Dorris, J.D., CFE, CPA (advisory member); Bruce G. Dubinsky, CFE, CPA (assistant treasurer), managing director, commercial disputes, Duff and Phelps, LLC, Washington, DC; James J. Oakes, CFE (chair), global director, financial crime, for the Wynyard Group, London, U.K.; ACFE President and CEO James D. Ratley, CFE (advisory member); and Vice President and General Counsel John Warren, J.D., CFE (advisory member).
THE ACFE AND A NEW PROFESSION
When Dr. Joseph T. Wells, CFE, CPA, founded the ACFE in 1988, few auditors and accountants knew what to do with fraud when they discovered it. What a difference 25 years makes. Or even 20 or 10. “I think the ACFE created the fraud examination profession,” says Ratley. “The Fraud Examiners Manual was the first time anything was put on paper about fraud examination. …
“We had an attendee at one of our first early events who told me that ‘Until you started the association my kids would ask what I did for a living, and I didn’t know what to tell them. Now I know to tell them I’m a fraud examiner,’ ” Ratley says.
Within two weeks after the ACFE began offering the Certified Fraud Examiner credential, the post office was bringing in boxes of applications, he says. “They were hungry for that type of knowledge. …
“However, some members of the accounting profession would come to our training in the early years,” Ratley says. “Many of them were angry that their companies sent them. They didn’t want to be there. They said ‘Fighting fraud isn’t my job.’ A partner from what was then a Big 6 accounting firm told me that ‘When I see fraud I turn my back because it makes my job harder.’ ”
Ratley says that “ostrich head in the ground” attitude is no longer prevalent. “It’s taken years and years, but the ACFE has worked to change those beliefs. We’ve given outstanding professionals a way to solidify their existence as anti-fraud experts.”
Those fraud examiners who’ve earned the CFE credential have a leg up on competitors, says Dubinsky. “Last year we were contacted by a Fortune 100 company for a boardroom investigation from a whistleblower for an alleged fraud,” he says. “We lead with our pitch that our people were CFEs. They told us that was one of the reasons they hired us. They had other forensic accountants that had come on [to work the case] but they really weren’t fraud specialists. We got onsite and within a day and a half they had fired the other accounting firm — a very large accounting firm — who had been trying to investigate for six weeks. They just really didn’t have the mindset to investigate the fraud that we completed within a couple of days. The Certified Fraud Examiner is able to show companies great value.”
Darvall-Stevens agrees with Dubinsky. “A client will recognize that if you submit a proposal for anti-fraud work and you’ve got CFEs as part of that team, that’s a competitive advantage,” he says.
“I see more and more requirements for CFE qualifications in job postings at least outside the U.S.,” says Oakes. “Corporations around the world now recognize the CFE credential as an essential component for applicants, he says.
“The CFE credential is being recognized in the courts a lot,” says Dubinsky. “I testify quite often. The elevation and awareness of the credential in the judicial sense has really helped recognize the ACFE and the anti-fraud profession. … Fifteen years ago as a CPA I could qualify on fraud issues. Today you can’t. You need to have the CFE credential to distinguish you from others in that forum. It’s really raised the bar.”
Brown says that “the ACFE has laid the foundation for anti-fraud training so that other organizations [for accountants and auditors] are now offering similar anti-fraud curriculum. This discipline has become a profession because of the efforts of Dr. [Joseph T.] Wells [ACFE founder and Chairman] and Mr. Ratley.”
ATTRACTIVE PROFESSION FOR STUDENTS BUT NO INSTANT FRAUD EXAMINERS
Brody says that accounting — at least the anti-fraud component — is “now sexy for students. The number of accounting majors was way down, but more have entered the field because they want to learn about fraud. …”
Anti-fraud education from the ACFE, whether via its seminars and materials, or through its free higher-education Fraud Examination 101 course has changed the auditing profession, Brody says. “All the education we’re getting from the ACFE is filtering down to the universities. …
Ph.D., CFE, CPA
J.D., CFE, CPA
|James D. Ratley,
|James J. Oakes,
“When I started in the fraud world, I don’t know how many [higher-education] schools offered fraud examination classes but it was probably 10 and now it’s hundreds because of the ACFE’s commitment to education at the university level,” Brody says. “So I think even employers are starting to take notice because we’re exposing our students to anti-fraud concepts. If you don’t offer fraud examination classes people are asking why not.
“Graduating students now probably have more anti-fraud training than the seniors, the managers and the partners they’re working for,” he says.
“For years and years we’ve said that we [auditors and accountants] are not responsible for fraud,” he says. “Now we know we can’t turn a blind eye to it, and that’s what we tell our students.
“As educators, we also tell them that even if they get the proper training they’re not going to become fraud examiners overnight. So many students graduate and immediately want to be a fraud examiner or forensic accountant,” Brody says. “I have to tell them they need to develop their skill sets first. … So even if you’ve been out of college for six months and you decide that you want to be a fraud examiner you’re still probably not ready. This isn’t an entry-level profession per se. You need to develop skills — get public or private accounting experience, governmental experience, and then you can move into it.”
Higher education institutions appear to be reading from the ACFE’s playbook. Dubinsky says that he has been approached by a major university, which has received support from a U.S. Department of Justice grant, to study white-collar crime. The university “is planning to combine the criminology section with sociology and accounting and put them into one program for students,” he says.
“Students who were on the accounting track, up until recently, didn’t learn about criminology, or law enforcement or cyber security because an accounting curriculum didn’t have time to teach them. It will be interesting to see where academia goes with that to get students ready to come into the real world,” he says.
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