Certified Fraud Examiner (CFE) | Complete Guide

Who is Certified Fraud Examiner (CFE)?

A Certified Fraud Examiner (CFE) is a skilled professional adept at preventing, detecting, and investigating fraud, possessing expertise in complex financial transactions, investigative techniques, and legal matters. They play a pivotal role in designing anti-fraud programs and work across distinct industries to fight fraud, limit losses, and conduct investigations. The CFE credential signifies expertise and professionalism in high-stakes accounting, requiring specific education and work experience outlined by the Association of Certified Fraud Examiners.

Geeky Takeaways:

• Certified Fraud Examiners are professionals skilled in preventing, detecting, and investigating fraud, possessing expertise in complex financial transactions, investigative techniques, and legal matters.
• Eligibility requirements for the CFE program include education criteria, professional experience, and passing a rigorous examination process.
• CFEs earn an average base salary of $93,000 in the United States, with the certification significantly impacting earnings and career growth potential.
• The CFE membership requirement entails holding an Associate Membership with the Association of Certified Fraud Examiners.
• The CFE exam is structured into four sections, allowing flexibility in testing options and preparation methods.

Benefits of CFE Certification

• Enhanced Professional Credibility: Possessing the CFE credential demonstrates a robust understanding of anti-fraud methodologies, enhancing credibility with clients, employers, and peers alike.
• Increased Earnings: CFEs earn approximately 17% more than their non-certified counterparts, offering a tangible financial incentive for obtaining the certification.
• Career Advancement: CFEs can continuously enhance their anti-fraud expertise through top-tier training and resources, paving the way for lucrative career advancement opportunities.
• Specialized Knowledge and Skills: CFEs boast specialized expertise in fraud examination, prevention, financial transactions, investigation tactics, and legal aspects, forming a solid foundation for fraud detection, investigation, and prevention.
• Global Recognition: The CFE certification carries global recognition, enabling CFEs to explore professional avenues internationally and position themselves as credible fraud assessment professionals worldwide.
• Networking Opportunities: CFEs can leverage networking events, seminars, and online forums to connect with peers, share best practices, and forge partnerships, providing ongoing support and collaborative opportunities throughout their careers.
• Professionalism and Ethical Values: The CFE certification signifies a high standard of professionalism, competency, and ethical values, strengthening professional credibility and expanding employment options.
• Access to Job Opportunities: CFEs have access to specialized job sites and career centers tailored to forensic accounting and related industries, enhancing job prospects and facilitating career growth.
• Expertise in Fraud Examination: With expertise in investigating financial circumstances to uncover fraudulent activities, CFEs play a vital role in limiting fraud, including insurance fraud and financial scams, safeguarding firms from significant economic losses.

Eligibility Requirements for CFE Program

1. Education Requirements: Many CFE candidates hold at least a bachelor’s degree (or equivalent) from an accredited institution, earning 40 qualifying points. While no specific field of study is mandated, those without a bachelor’s degree can substitute two years of fraud-related professional experience for each year of academic study. For instance, two years of full-time college attendance would yield 20 points, requiring an additional four years of professional experience to meet the education criteria.

2. Experience Criteria: During the time of certification, candidates should possess a minimum of 2 years of professional experience in a field indirectly or directly linked to fraud deterrence or detection. However, individuals lacking the requisite experience can still sit for the CFE Exam if they accumulate a minimum of 40 qualifying points. Upon acquiring the mandatory 50 points and two years of professional experience, candidates become eligible for the CFE credential.

3. Examination Process: Initiating the examination process entails professionals applying for ACFE membership, submitting an application fee, and obtaining a CFE exam key. The exam will have four sections: financial transactions and fraud schemes, investigation, law, and fraud prevention and deterrence. Each section consists of objectives along with true or false questions, with candidates needing to achieve a minimum score of 75% in each section to pass.

4. Fees and Payment Options: The registration fee for the CFE exam stands at $450. However, candidates opting for the prep course, priced at $1062, receive a $100 credit towards the exam fee, thus paying only $350. ACFE members enjoy a discounted prep course fee of $849.60. Additionally, members have the flexibility to pay in installments.

5. Membership Requirement: Candidates should possess an Associate Membership with the ACFE to undertake the CFE Exam and get the CFE credential. ACFE membership serves as a prerequisite for pursuing CFE certification.

Salary of a CFE

1. Average Base Salary: According to Payscale, the average base salary for CFEs in the United States stands at $93,000 per year. However, this figure varies depending on factors, specifically job title, experience, and geographical location. For example, a CFE-certified fraud investigator can earn between $52,000 and $118,000 annually, with an average salary of $74,507.

2. CFE Certification Impact on Earnings: The 2020 Compensation Guide for Anti-Fraud Professionals by the Association of Certified Fraud Examiners reveals that individuals holding the CFE credential earn 32% more than their non-certified counterparts. Obtaining the CFE certification early in one’s career can significantly boost total career earnings, potentially amounting to an additional $647,828 for individuals employed continuously from age 25 to 65.

3. Factors Influencing Salary: The salary of CFEs is influenced by distinct factors, including level of education and professional responsibility. In the ACFE Compensation Guide, a survey shows that CFEs earn 34% more than non-CFEs. Moreover, findings from the ACFE compensation guide indicate that over 60% of survey respondents hold managerial or higher-level positions, with CFEs more likely to occupy senior roles compared to non-CFEs.

4. Future Career Opportunities: The global recognition of the CFE certification enhances professionals’ marketability, with nearly 90% of Fortune 500 companies employing at least one CFE. Beyond increasing earning potential, the certification also opens up a plethora of career opportunities for certified individuals.

CFE Membership Requirement

You can easily become an ACFE member or update your existing account online at ACFE.com/Join. To apply for and keep your CFE credential, you need to be an ACFE member in good standing. ACFE membership provides special benefits aimed at keeping you up-to-date in the field of fraud examination. As an ACFE member, you join a community of professionals dedicated to preventing fraud in their organizations and communities. The ACFE offers training and resources tailored to help you meet this goal effectively. Moreover, you have the opportunity to connect with other professionals who are willing to offer assistance and support.

CFE Exam Requirements (Exam Structure)

1. Understanding the CFE Exam 

The CFE Exam is a comprehensive assessment divided into four sections, each containing 100 multiple-choice questions. Each section has a time limit of two hours, and the exam is designed to evaluate your knowledge of distinct aspects of fraud examination. Prepare thoroughly to excel in all the four sections.

2. Exam Format and Content

a. Closed-Book Format: The CFE Exam is a closed-book and closed-notes test, meaning candidates cannot refer to any external materials during the exam. It ensures fairness and integrity in the assessment process. Candidates must rely solely on their understanding of the subject matter.

b. Four Major Areas of Fraud Examination: The CFE exam will cover four major areas of fraud examination. These four topics will correspond to the sections of the Fraud Examiners Manual, which serves as the efficient source of knowledge for the exam content. The four pivotal sections are:

• Financial Transactions and Fraud Schemes: This part will evaluate a candidate’s understanding of distinct fraudulent financial transactions found in accounting records. It assesses your knowledge of basic accounting and auditing theory, fraud schemes, internal controls to deter fraud, and other related auditing and accounting matters.
• Law: This segment focuses on understanding the legal framework involved in prosecuting fraudsters. It covers statutes and common law principles, criminal and civil law, rules of evidence, rights of the accused and accuser, and expert witness matters.
• Investigations: This part assesses your grasp of essential tools and techniques for gathering information and evidence during a fraud examination. It includes questions on statement-taking, interviewing, tracing illicit transactions, getting information from public records, assessing deception, and report writing.
• Fraud Prevention and Deterrence: This section examines your understanding of the motives behind fraud and strategies to prevent it. Topics include crime causation, white-collar crime, occupational fraud, fraud prevention methods, fraud risk assessment, and adherence to the ACFE Code of Professional Ethics.

3. Unique Exam Generation

Each exam is generated from a master database, ensuring that no two exams are identical. This randomization process maintains the integrity and security of the exam. Candidates can expect a diverse range of questions to test their understanding.

4. Exam Format Options

• In-Person Options: Candidates have the option to take the exam in person either at a CFE Exam Review Course or at a Prometric Testing Center. In-person testing provides a traditional exam setting for those who prefer it. Opt for the option that best suits your choices and needs.
• Online Option with Remote Proctoring: Alternatively, candidates can opt for digital testing using Prometric’s ProProctor platform. This option permits candidates to take the exam remotely from the comfort of their own homes, offering flexibility and convenience. Ensure you have a suitable testing environment and meet the technical requirements for remote proctoring.

5. Taking the Exam

• Scheduling Process: Upon approval of the CFE Exam Application, candidates need to schedule their exam appointments through Prometric. It’s essential to schedule appointments at least 30 days in advance to secure preferred time slots. Plan your exam schedule carefully to accommodate your study needs.
• Step-by-Step Scheduling: Candidates can log in to the Certification Portal to activate their eligibility and obtain an eligibility number. They then use this number to schedule exam appointments through Prometric’s website. 
• Taking the Exam and Receiving Results: Candidates must complete each section of the exam in one sitting, but they are not required to finish all four sections at once. It’s recommended to take one or two sections at a time. After completing a section, candidates receive their score report from Prometric within 24 hours. Review your results and use them to guide your study efforts for future sections.

How to Apply for CFE Exam?

1. Application Process: Candidates should approach the application process systematically. It begins with understanding the requirements and ensuring they meet the eligibility criteria outlined by the ACFE.

2. Application Requirements: The application process delves into four critical areas: qualifications and experience, character, consent to proctoring, and signature and payment. Fulfilling these requirements demonstrates a candidate’s commitment to professional integrity.

• Qualifications and Experience: This section verifies that candidates possess the necessary qualifications and experience to become a CFE. It requires candidates to provide evidence supporting their eligibility, which includes meeting specific educational and professional benchmarks. Providing detailed evidence enhances the credibility of the application.
• Character: Maintaining the integrity of the CFE credential is paramount. Candidates must demonstrate good moral character and a commitment to ethical conduct within the anti-fraud profession. This is confirmed by agreeing to adhere to the ACFE’s Code of Professional Ethics and obtaining three professional recommendations. Building a reputation for ethical conduct strengthens the anti-fraud profession as a whole.
• Consent to Proctoring: As the CFE Exam is proctored, candidates must agree to comply with all proctoring policies to proceed with their application. It ensures the integrity and security of the examination. Acceptance of proctoring policies underscores a candidate’s commitment to fairness and honesty.
• Signature and Payment: Candidates must affirm the accuracy of the information provided in their application through a signature. Additionally, payment of the application fee is mandatory before submission. The signature is a solemn affirmation of the candidate’s commitment to honesty and accuracy.

3. Process to Fill Out the Application: The application process comprises two primary stages: completing the online prequalification and submitting supporting documentation. The methodical completion of each step expedites the application process.

• Complete the Online Prequalification: Candidates initiate the process by logging into their ACFE.com account and filling out the prequalification form. It’s essential to carefully review and agree to all the terms and conditions this section outlines.
• Submit Supporting Documentation: Upon successful completion of the prequalification stage and payment, candidates gain access to the Certification Portal. Individuals can upload the required documentation, including proof of experience, education, and professional recommendations.

4. Experience: Candidates must provide comprehensive details about their relevant work experience, including job titles, responsibilities, and the percentage of time devoted to fraud-related activities. Providing specific examples of how their roles contributed to combating fraud strengthens their application.

5. Proof of Education: Documenting educational qualifications is a crucial aspect of the application process. Candidates must submit official transcripts, diplomas, or letters from academic institutions to validate their educational background. Accurate documentation verification ensures transparency and credibility.

6. Professional Affiliations: Certain professional affiliations may be considered equivalent to academic points. Candidates can include documentation for these affiliations in their application to bolster their credentials. Recognition of professional affiliations acknowledges their contribution to professional development.

7. Submitting Documentation for Review: After completing the application and uploading all required documents, candidates submit their application for review by the Certification Committee. In some cases, committee may request additional information or documentation if they consider it necessary.

8. Application Period and Expiration: CFE Exam applications remain valid for two years from the date of receipt. If candidates do not complete the exam within this timeframe, they must reapply, which involves resubmitting payment and supporting documentation. Planning for timely exam completion ensures continuity in the certification process.

CFE Exam Tips and Resources

• Review the Exam Content Outline: Familiarize yourself with the CFE Exam Content Outline, detailing the core topics across the exam’s four sections. Understanding this outline provides insight into the exam’s format and content.
• Select Appropriate Study Materials: Consider utilizing the ACFE’s CFE Exam Prep Course, a comprehensive self-study program offering pre-assessments, interactive lessons, review questions, and flashcards. Alternatively, self-directed study using the Fraud Examiners Manual is an option, but it requires more time and self-discipline.
• Prepare Methodically: Utilize the resources provided in the CFE Exam Prep Course, available in various subscription packages tailored to your requirements. Alternatively, delve into the Fraud Examiners Manual, covering all exam subjects. However, note that self-directed study demands significant time and self-discipline.
• Practice with Sample Exams: Enhance your familiarity with the exam’s format and content by taking practice exams. This helps refine your test-taking skills and boosts confidence for the actual exam.
• Ensure Technology Compatibility: Prioritize a system check to ensure your computer meets Prometric’s technology requirements, especially if you are considering remote proctoring. This ensures a smooth exam experience without any technical glitches.
• Schedule Exams in Advance: Plan your exam appointments well in advance, scheduling them at least a month ahead to secure your preferred dates and times for each section.
• Optimize the Testing Environment: Create a quiet and distraction-free testing space, free from interruptions by pets, family members, or colleagues. Prometric may terminate the exam if external interference occurs.
• Prioritize Rest: Ensure you get ample rest, aiming for at least 8 hours of sleep before the exam. Being well-rested can significantly improve your performance.
• Maintain Focus and Calm: Stay composed and focused during the exam, practicing deep breathing and careful question reading. Remaining calm enhances clarity of thought and decision-making during the test.

Conclusion

Becoming a Certified Fraud Examiner offers numerous benefits, including enhanced professional credibility, increased earnings, and career advancement opportunities. The eligibility requirements for the CFE program involve meeting education criteria, accumulating relevant experience, and successfully passing the rigorous examination process. With thorough preparation, adherence to technology requirements, and a conducive testing environment, candidates can approach the CFE exam with confidence, aiming to achieve their certification and advance in their careers as fraud examination professionals.

Certified Fraud Examiner – FAQs

Is the CFE exam difficult to pass?

Yes, the CFE exam is widely regarded as challenging, with a pass rate typically ranging from 50% to 60%.

Is pursuing a CFE certification a good choice?

The CFE credential is highly respected internationally and holds significant value within the industry.

Who should consider obtaining a CFE certification?

Professionals such as insurance fraud investigators and fraud examiners employed by corporations, businesses, or associations are ideal candidates for pursuing a CFE certification.

Which day of the CFE exam is considered the most challenging?

Day 2 of the CFE exam is often considered the toughest of all the exam days.