Ralph Q. Summerford, CFE, CPA

It was 1970, and Ralph Summerford saw nothing but grim faces in his office. They were in the midst of an economic downturn — accountants were losing their jobs at the CPA firm, and Summerford decided he wasn't going to lose his. 

"Job insecurity convinced me that I wanted to be in control of my destiny," he said in an interview with Fraud Magazine®. So he quit and started his first firm, Pearce & Summerford, P.C., Certified Public Accountants. That break began a professional journey that led to his Certified Fraud Examiner (CFE) credential and the eventual founding of the highly specialized Forensic Strategic Solutions, LLC with offices in Alabama, Texas and California. Summerford, who is president of the firm, started it in 1992 with just one employee — himself. 

"I worked from my home for the first six months and then bit the bullet and leased an office in the downtown [Birmingham] area right in the middle of the attorney firms I wanted to work with," he said. "I set up a daily routine of calling and visiting with potential clients." 

He began speaking at professional meetings and wrote for area publications. Eventually, he built a solid client base and began expanding. The firm specializes in providing experts for fraud examinations, forensic investigations, business valuations, computer forensics, litigation support services, data analysis, economic damages calculations, statistical analysis, fraud prevention and risk assessment, and financial distress. Despite the recession, Summerford doesn't necessarily recommend against CFEs starting businesses. Demand for fraud examination services is still at an all-time high. Lawyers, consulting firms, government agencies and companies of all sizes require the expertise of fraud examiners, he said. 

What prompted you to enter the anti-fraud field? 

First, I had — and have — a passion for this work. After I prepared my business plan, I realized this field afforded outstanding opportunities. I became a CFE in 1993; I believe the opportunities for CFEs are even greater today. Most courts now recognize CFEs as experts who are qualified to testify about fraud. That wasn't true in 1993. To be an expert witness I had to rely on qualifying as a CPA who had knowledge about fraud. We've come a long way since then. But the anti-fraud movement, which the Association of Certified Fraud Examiners (ACFE) began in earnest in 1988, is still young.  

What are some of the best reasons to begin a fraud examination or forensic accounting business? 

There will always be a demand for these services. The work is absolutely fascinating, and you get to work with true forensic and legal professionals. The work is mentally stimulating. Each day is different, and the challenges are unique. And it's fun to get out of bed each day and go to work! 

What are the initial steps a CFE should take when starting a business? 

As I've emphasized, write a detailed business plan. Most people spend more time planning a vacation than they do their lives. Some make feeble attempts to construct business plans, but most aren't thorough. The business plan process will take you from your idea to implementation. You can buy software that will take you down the "yellow brick road" of planning. You must be committed and passionate for this type of work. You can't treat your business as a sideline. And, most of all, find mentors who can help you avoid pitfalls. I found seasoned professionals who were able to guide and save me grief. 

Considering the recession, is this a good or bad time to “hang your shingle”? 

There is no best time to hang the shingle, regardless of the economic environment. Unless you have the depth of knowledge, experience, a solid plan and an abundance of caution to start the business, you might not be able to sustain it even in the best of times. A good example is the internal control work generated by the Sarbanes-Oxley Act (SOX). Lots of folks jumped into that arena and proclaimed themselves to be "forensic accountants." Now that the SOX work has all but dried up, those people are scrambling for new areas — areas for which they're neither prepared nor possess the depth of knowledge typically associated with forensic expertise. 

The ACFE, under the early direction of founder and Chairman Dr. Joseph T. Wells, CFE, CPA, has always stressed prevention and deterrence. What are some ways you stress those steps to your clients? 

Most businesses don't want to spend money for prevention and detection. Our counseling comes as a follow-up to our work. It's a natural progression. It's unfortunate, but once a firm has suffered a loss due to fraud or abuse, only then is it willing to spend some money on prevention and detection. One CFE I know has a great deal of success selling anti-fraud services because he knows a lot of people on the inside — internal auditors and people in the C-suite. 

How has your ACFE training helped you in your business? 

ACFE training has been invaluable. It's truly the foundation for our business. This is where we learned about data mining, computer-assisted crimes, investigations, you name it — almost everything. Furthermore, fraud examination is a networking business. There's no way that a CFE can be all things to all people. ACFE training has allowed us to network with nearly 90,000 other anti-fraud professionals around the world with whom we have something in common, can share information, and can solicit help and refer work.  

Would you be willing to share something that no one tells you when you start a business, something you had to learn the hard way? 

There will be many people who will tell you they will help you — they will not. However, others will help you whom you never expected. Also, if you don't have selling skills, acquire them. 

If you were advising a CFE who was about to start their own firm, what recommendations would you give them? What are the most important factors developing a successful anti-fraud practice? 

In 2003, the ACFE asked me to help develop a course on this very topic, and together we developed the 1-day course, How to Build Your Fraud Examination Practice. If you can't attend the course, in addition to the items I've included here, I'd advise the CFE to take the sage advice of motivational business speaker Jim Rohn and spend more time on developing yourself than you do on your job. 

ACFE membership is open to individuals of all job functions, industries and levels of experience who are interested in the prevention, detection and deterrence of fraud. If you want to level up your anti-fraud career, we can help.

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