522 - Exam 1 - Chapter 1 (6) Flashcards
1. Fraud-Related Definitions 3Q 2. Cultural Differences & Fraud 1Q 3. Fraud Detection 1Q 4. Cost of Fraud 1Q
CFE Certification
Fraud Examiners - Certified Fraud Examiner
ACFE
Fraud Examiners - Association of Certified Fraud Examiners - the issue CFE’s
CFF
Forensic Accountants - Certification in Financial Forensics (C.F.F.)
What is Fraud examination?
Investigation of financial and other documentation for criminal fraud.
CFF qualifications
- AICPA member - good standing
- at least 5 years experience in accounting
- CFF Examination
- Minimum requirements in relevant business experience
IFP
Institute for Fraud Prevention
CFS
Certified Fraud Specialist
NAFA
National Association of Forensic Accountants Certification
def: Fraud Examination (vs. forensic accounting)
Prevention and deterrence, detection, investigation;
Applies business, accounting, auditing, legal concepts to facts or hypotheses under consideration;
Identifies & examines fraud (FS & other types)
def: Forensic Accounting (vs. Fraud examination)
Litigation matters and investigations:
a. Includes litigation support consulting, expert witnessing, resolution of fraud allegations
b. Work with damage claims, valuations, legal & other issues not involving allegations of fraud
Internal and External Auditing
Planning, Risk Assessment, IC, audit evidence
Who provides expert testimony?
CFEs & CFFs Provide Expert Witness Testimony
Fraud-Related Definitions (3Q)
- Falsification, alteration, or manipulation of material financial records, supporting documents, or business transactions
- Material intentional omissions or misrepresentations of events, transactions, accounts, or other significant information from which financial statements are prepared
- Deliberate misapplication of accounting principles, policies, and procedures used to measure, recognize, report, and disclose economic events and business transactions
- Intentional omissions of disclosures or presentation of inadequate disclosures regarding accounting principles and policies in addition to related financial amounts
Detected and/or Reported
Only a small portion of financial statement fraud is detected (reported), and most cases continue until they are discovered
5 Basic Elements of Fraud
- A false representation of a material nature
- Scienter
- Reliance on the false representation by the victim
- Financial damages are incurred by the victim
- Was intentional