ACFE Updated CFE-Investigation Exam Questions and Answers by benedict

The Fraud Examiners Manual notes:

“Management of an organisation should ensure that the organisation has a proper and effective document retention policy in place… An effective policy requires clear retention protocols… and should be immobilised due to a pending investigation or foreseeable litigation.”

Thus, the existence of a document retention policy is a critical factor in deciding how to dispose of evidence.

“Records obtained from financial institutions are perhaps the single most important financial source available to a fraud examiner for tracing purposes. They can be used as evidence for fraud, uncover criminal profits, identify criminal assets, and locate assets”.

Pretexting is defined as impersonating someone else or making false/misleading statements to obtain information. Many jurisdictions specifically prohibit pretexting against financial institutions, which includes pretending to be a customer to access their bank account information.

The 2014 International Fraud Examiners Manual provides examples of data analysis for accounts payable:

“Examples of data analysis queries that can be performed to help detect fraud through examination of accounts payable include:

• Audit paid invoices for manual comparison with actual invoices.

• Summarise large invoices by amount, vendor, etc.

• Identify debits to expense accounts outside of set default accounts.

• Reconcile cheque registers to disbursements by vendor invoice.”

While other functions apply to payroll or asset management, the most effective function for accounts payable fraud detection is to summarize large invoices by amount and vendor.