The Frequently Asked Questions (FAQ’s) and general knowledge provided below is to enable you to truly understand who you are working with, what their capabilities and limitations are. Knowing what your needs are and who best to help you is the key to maximizing your dollar value for services offered in the world.
We hope this guide gives you a better idea of what we do to help you, and your company. If you have any questions or comments, please feel free to email us.
1. What is a Certified Fraud Examiner?
Certified Fraud Examiners (CFEs) perform a variety of services in a variety of industries and in many capacities in an organization. They are part accountant, part investigator, part attorney, and part criminologist. CFEs have the ability to:
Understand how fraud is committed and how it can be identified;
Examine books and records to detect and trace fraudulent transactions;
Interview suspects to obtain information and confessions;
Write investigation reports, advise clients as to their findings, and testify at trial; and
Understand the underlying factors that motivate individuals to commit fraud.
Types of Services Performed
Examine records for fraud
Present investigation findings
Testify in court
Conduct background checks
Investigate employee theft
Conflict of interest investigations
Insurance claim investigations
Financial statement analysis
Locate hidden assets
Reconstruct accounting records
Review of financial statements
For more information, visit www.acfe.com
2. What is an Enrolled Agent?
An EA is authorized by the U.S. Department of the Treasury to represent taxpayers before the IRS for audits, collections, and appeals, according to the National Association of Enrolled Agents (NAEA). EAs advise, represent and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any entities with tax-reporting requirements.
Enrolled Agents are the only tax professionals who get their license to practice directly from IRS and the United States Treasury.
Enrolled agents are the only taxpayer representatives who receive their unlimited right to practice from the federal government globally (CPAs and attorneys are licensed by the states). That means if you need to file in more than one state and eventually need representation before that state in an audit or resolution case, the same EA can do it.
People who don’t have the resources to pursue a taxation attorney often hire EAs instead for civil resolution cases. Not only do EAs rates tend to be more affordable, they can leverage their tax law expertise to represent clients in tax proceedings, audit hearings and appeals.
Enrolled Agents are the only tax professionals who get their license after taking a rigorous set of exams that only cover taxation and the related representation rules of the Internal Revenue Code and the Internal Revenue Manual.
Enrolled Agents are the only tax professionals whose continuing education must be 100% in taxation and the ethics of taxation.
CPAs may study accounting, auditing, consulting services, specialized knowledge and applications, management, taxation and ethics. They do not have to have specialized tax knowledge.
Attorneys can study any area of the law to keep up with their mandatory legal continuing education requirements – they aren’t required to study tax law
EAs help ensure clients are treated appropriately by the IRS, work out payment plans on the best possible terms, and ensure the IRS follows laws that protect taxpayers.
3. Do all companies have a standardized business model where all financial guidelines apply across the board?
Your business relies on you to define your needs and risks. We can help you by providing a logical holistic approach in identifying needs related to desired end state. No two businesses are alike, as such, no two business models are the same.
4. What are the requirements for someone to prepare tax returns?
With the exception of the within State of Oregon and California, the only requirement for a person to prepare tax returns for compensation is to obtain an IRS Paid Preparer Tax Identification Number (PTIN). The requirements to obtain an PTIN is to submit an application with the required fee. The IRS checks to make sure that the applicant is in compliance with tax regulations (ie. No monies are due to the IRS and all tax returns have been filed) and applicants are required to disclose any felony convictions. There is no test or educational requirements to obtain the PTIN.
5. Is the individual doing my taxes the person an expert in taxation?
Not always, See links above for clarification as to the specific capabilities provided by financial services. If you are confused, it’s not the right entity helping you. Taxes do not have to be complicated and/or overwhelming for you. EA’s are individuals who solely concentrate in the tax world, unlike any other financial services provider.
6. How do I choose the right bookkeeper for my needs?
Would you go to a dentist and ask him to perform heart surgery on you? Of course not, so why should you randomly choose someone to understand and identify your financial personal or business needs? Bookkeeping by a competent financial person or company need not be over the top expensive to meet your needs. Figuring out what your needs are, is the first step in finding the right provider for you. Ask questions, until you understand what is going on with your financial picture.
7. What is the definition of fraud?
Fraud is any intentional act or omission designed to deceive others, resulting in the victim suffering a loss and/or the perpetrator achieving a gain. (ACFE)
8. What is a Fraud Risk Assessment?
A fraud risk assessment is an exercise tailored to the organization’s size, complexity, industry, and goals and should include risk identification, risk likelihood and significance assessment, and risk response. An effective fraud risk identification process includes an assessment of the incentives, pressures, and opportunities to commit fraud, access and override of system controls as well as internal and external threats to data integrity, system security, and theft of financial and sensitive business information completed through analytical exercises, discussions and interviews with key company personnel and takes into consideration an organization’s financial reporting, operations, and reputation, as well as legal and regulatory compliance requirements
9. What type of business should have a fraud risk assessment?
Since all organizations are subject to risks associated with fraud, all businesses should have a fraud risk assessment conducted by a Certified Fraud Examiner. Frauds have led to the downfall of entire organizations, massive investment losses, significant legal costs, incarceration of key individuals, and erosion of confidence in capital markets. Publicized fraudulent behavior by key executives has negatively impacted the reputations, brands, and images of many organizations around the globe. Protecting your company against the significant loss associated with fraud is a necessity.
10. Are there any tips you can give for preventing fraud?
See 5 Fraud Tips Flyer (PDF)
We can assist you in implementation of these five fraud tips. We have the knowledge and expertise to assist you in proactively protecting your company against fraud.
11. Isn’t fraud an expected cost of doing business in today’s economy?
Fraud should not be an accepted cost of doing business. Fraud can be prevented. The cost of complacency in regards to fraud is significant. Please read the Cost of Complacency flyer by the ACFE. View Cost of Complacency (PDF)
12. Are there positions or departments in a company that are more likely to experience fraud?
Although it is difficult to determine a person’s propensity to commit fraud, there are some characteristics that signify a person may commit fraud or are common amongst those committing fraud. See this great informational brochure from the ACFE. View Profile of a Fraudster (PDF)