Association of Certified Fraud Examiners
|This article relies too much on references to primary sources. (February 2008)|
|Legal status||Professional organization|
|Worldwide (125 countries)|
|More than 75,000|
|Joseph T. Wells|
|James D. Ratley|
|Board of Regents|
Established in 1988 the Association of Certified Fraud Examiners is the professional organization that governs professional fraud examiners. Its activities include producing fraud information, tools and training. It governs the professional designation of Certified Fraud Examiner. The ACFE is the world's largest anti-fraud organization and a provider of anti-fraud training and education, with more than 75,000 members.
Certified Fraud Examiner credential
The Certified Fraud Examiner (CFE) credential denotes expertise in fraud prevention, detection and deterrence. CFEs are trained to identify the warning signs and red flags that indicate evidence of fraud and fraud risk. CFEs around the world uncover fraud and implement processes to prevent fraud from occurring in the first place.
Joseph T. Wells
Joseph T. Wells founded the ACFE and sits as its chairman. After graduating from the University of Oklahoma, he served for ten years with the FBI, during which time he investigated Watergate.
In addition to his duties as chairman, Wells writes, researches, and lectures to business and professional groups on white-collar crime issues. He has written books and articles on fraud prevention and detection. His writings appear in professional journals.
Research conducted by the ACFE in the 2012 Report to the Nations on Occupational Fraud and Abuse states:
- the typical organization loses 5% of its revenues to fraud each year. Applied to the estimated 2011 Gross World Product, this figure translates to a potential projected global fraud loss of more than $3.5 trillion.
- The median loss caused by occupational fraud cases was $140,000. More than one-fifth of these cases caused losses of at least $1 million.
- The frauds lasted a median of 18 months before being detected.
- Occupational fraud is more likely to be detected by a tip-off than by any other method. The majority of tips reporting fraud come from employees of the victim organization.
- Occupational fraud is a threat to small businesses. The smallest organizations in the study suffered the largest median losses.
- The industries most commonly victimized were the banking and financial services, government and public administration, and manufacturing sectors.
- The presence of anti-fraud controls is correlated with decreases in the cost and duration of occupational fraud schemes.
- Nearly half of victim organizations do not recover any losses that they suffer due to fraud. As of the time of the survey, 49% of victims had not recovered any of the perpetrator’s takings.
- Perpetrators with higher levels of authority tend to cause much larger losses. The median loss among frauds committed by owner/executives was $573,000, the median loss caused by managers was $180,000 and the median loss caused by employees was $60,000.
- The majority (77%) of all frauds in the study were committed by individuals working in one of six departments: accounting, operations, sales, executive/upper management, customer service and purchasing.
- Most occupational fraudsters are first-time offenders with clean employment histories. Approximately 87% of occupational fraudsters had never been charged or convicted of a fraud-related offense, and 84% had never been punished or terminated by an employer for fraud-related conduct.
- In 81% of cases, the fraudster displayed one or more behavioral red flags that are often associated with fraudulent conduct. Living beyond means (36% of cases), financial difficulties (27%), unusually close association with vendors or customers (19%) and excessive control issues (18%) were the most commonly observed behavioral warning signs.
- Frankensteins of Fraud, published by the ACFE
- Wells, Joseph T. (2010). I'm a Fraud; You're a Fraud: The Fables, Follies, and Foibles of a Fraud Fighter. Hoboken, NJ: Wiley. p. 376. ISBN 978-0-470-61070-1.