Certified Fraud Examiners are trained in fraud examination activities like forensic accounting. Certified Fraud Examiners (CFEs) have a variety of job options, such as forensic accountants, compliance officers, internal or external auditors, state or private investigators and law enforcement. CFEs can also become special agents, inspector generals, chief risk officers, chief compliance officers, and chief audit executives. In this article we’ll explore how the certification is earned and used, especially as it relates to the work of a financial advisor.
How to Become a CFE
The CFE certification is issued by the Association of Certified Fraud Examiners (ACFE), based in Austin, Texas. It is the world’s largest anti-fraud organization. In order to become a CFE, you must have a bachelor’s degree or its equivalent, in any field, and at least two years of professional experience in a field related directly or indirectly to detecting or deterring fraud.
Qualifying fields include auditing, accounting, law and loss prevention. Whether or not your experience qualifies is determined by a points system that awards credit for education, experience, and professional affiliations. You’ll need to receive at least 50 points for your experience to be accepted.
You’ll also need to become a member of the ACFE and pass the CFE exam in order to receive the designation. There are several ways that you can prepare for the CFE exam. You could study on your own using the Fraud Examiners Manual, which is a 2,000-page guide that goes over examination techniques and procedures. Its four main sections are Financial Financial Transactions and Fraud Schemes, Law, Investigation and Fraud Prevention and Deterrence.
If you want more structure for your test prep, you could take the CFE Exam Prep Course or the CFE Exam Review Course. The CFE Exam Prep Course is an online self-study course, available in the United States and internationally. As of 2020, it costs $796 for ACFE members and $995 for non-members.
The CFE Exam Review Course is a four-day, instructor-led course that provides the essentials needed to pass the exam. This course is designed for those who have already studied or believe they are mostly prepared for the CFE Exam. ACFE strongly recommends individuals study independently with the CFE Exam Prep Course before attending the review course.
Individuals can take the CFE Exam onsite, beginning the first day of the CFE Exam Review Course. As of 2020, it costs $1,895 if you have purchased a CFE Exam Prep Course in the last two years, and costs $2,395 if you have not. The price includes the exam fee.
Taking the Exam
To take the CFE Exam, you’ll need to complete a CFE Exam application with documentation. The Exam application fee is $400 unless you have purchased the CFE Exam Prep course, in which case the fee is $300.
The exam will cover the four primary areas of fraud examination: Financial Transactions & Fraud Schemes, Law, Investigation, and Fraud Prevention & Deterrence. The exam has four sections, and you must take each section within 24 hours of unlocking it. Once you begin a section, you must complete it in one sitting. You can complete each section at separate times. The ACFE recommends only taking a section or two at a time. You must pass each exam section within three attempts.
The exam is administered online and is closed notes and closed book. There are some technical requirements for you to be able to take the exam, including a web camera, microphone, and a high-speed internet connection. However, you can take the exam at any time.
The exam you take corresponds with the year or edition you are using to study. For example, if you are studying with the 2020 CFE Exam Prep Course, U.S. Edition, you will take the 2020 CFE Exam, U.S. Edition. However, a particular exam is only valid for two years after the release date. The 2020 CFE Exam, U.S. Edition is only valid until December 2021.
You will receive your exam results within 3-5 business days after you have completed all four sections. The passing score is 75% of all questions in each individual section of the exam. The scores are only released if you do not pass.
After you pass the exam, your application will be reviewed by the Certification Committee. When you are approved, you are then a CFE. In order to maintain the designation, you’ll need to obtain a minimum of 20 hours of Continuing Professional Education each year and pay annual membership dues.
Benefits of the CFE Designation
Getting the CFE designation can be very helpful for an anti-fraud professional, or someone pursuing a career in fraud prevention. The certification is recognized in the hiring and promotion policies of leading fraud prevention organizations, including the FBI, the U.S. Department of Defense and the U.S. Securities and Exchange Commission (SEC). In addition, CFEs earn 31% more than their colleagues without the certification, according to the 2017/2018 Compensation Guide for Anti-Fraud Professionals.
Those with the CFE credential are valuable to anti-fraud organizations because they have a unique set of skills. They are able to combine knowledge of complex financial transactions with an ability to understand methods, law, and how to resolve allegations of fraud. They know how and why fraud occurs.
CFEs vs. Certified AML and Fraud Professionals
Certified AML and Fraud Professionals (CAFPs) are also fraud prevention experts. This certification is offered by the American Bankers Association. CAFPs are focused on financial crimes, and the certification recognizes their practical experience in complying with U.S. laws and regulations and their ability to respond to a wide variety of financial crimes. It also recognizes their proven ability in program design and governance, regulatory requirements, detection, prevention and reporting, among other skills.
Like the CFE, you need the experience to be eligible for the certification. In order to receive the CAFP certification, you need a minimum of two years of financial crimes experience, in addition to a qualifying certificate or designation. You can also become eligible after five years of financial crime experience. You’ll also need to have U.S. banking experience in Bank Secrecy Act (BSA)/anti-money laundering (AML) compliance, fraud detection, and/or cyber-enabled financial crimes in order to be eligible for the certification.
Like CFEs, CAFPs must apply for, and pass the exam in order to receive the designation. However, CAFPs take their exams in a testing center. The CAFP exam fee is $750, and $450 for retakes. In order to maintain the CAFP designation, you’ll need to complete 45 CE credits every three years, pay the annual renewal fee, and adhere to the Professional Code of Ethics.
The Bottom Line
If you’re interested in, or already have, a career in fraud prevention, you might want to get the CFE certification. You’ll learn more skills that can help you in your career. Getting the certification may also raise your salary in the long run and give you more job and promotion options than you had without the designation. It’s a great certification to have on the staff of most financial advisory firms.
Tips to Avoid Fraud
- The CFE is just one of many certifications you might find when searching for a financial advisor. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Besides a CFE, there are several other important financial certifications. Financial professionals who hold one or more of these certifications can be quite helpful as you seek advice about how to grow your wealth securely.
Photo credit: ©iStock.com/AndreyPopov,©iStock.com/artoleshko, ©iStock.com/WIRUL KENGTHANKAN