Peet & Associates, LLC  Seattle-Tacoma-Olympia 360-825-2661

FAQs


What is a CFE?

A CFE (Certified Fraud Examiner) is a credential awarded by the Association of Certified Fraud Examiners to those that have met these minimum requirements: 

  • Is a member of the ACFE
  • Meets minimum education and professional standards (possesses a bachelor’s degree and have at least two years of professional experience in a field directly or indirectly related to the detection or deterrence of fraud)
  • Be of high moral character
  • Adhere to the ACFE’s Code of Ethics
  • Pass all four parts of the CFE exam (a 500 question exam that tests knowledge of Fraudulent Financial Actions, Legal Elements of Fraud, Investigation Methods, and Fraud Prevention and Deterrence)

What is the difference between a CFE, a CPA, an auditor, and a forensic accountant? 

A CFE is one that actively works to prevent fraud and looks for it within an organization. Using specialized skills and knowledge related to criminology and financial transactions, a CFE will investigate potential crimes and interview witnesses and suspects.

A CPA is an accountant who has earned the CPA designation. In Washington State the requirements for earning the CPA are found at the Washington State Board of Accountancy.  An accountant is one that works with businesses to ensure that the financial paperwork (book balancing, financial statements, etc.) are done properly (i.e., that the numbers match up).  Some accountants become forensic accountants, those who specialize in reviewing financial transactions for actual or anticipated disputes or litigation.

An auditor is an accounting professional who conducts an independent examination of a company’s financial statements or records to ensure that there are no material discrepancies in the accountant’s work.

A forensic accountant is one who applies accounting principles to any financial situation that may go to litigation.  Forensic simply means "suitable for court" so any work that a forensic accountant does should be suitable for the court.

Why should we hire a CFE if we've already got a CPA or Internal Auditor?

What differentiates a CFE from a CPA or an auditor is that the CFE is trained and experienced in detecting and investigating fraud, which includes collecting evidence for purposes of litigation (i.e., a CFE is prepared to go to trial).  Many CPAs and auditors are not.  If there is any possibility of your case going to trial, which would you prefer to have working on the case?

According to the ACFE’s 2018 Report to the Nation, only 15 percent of all occupational fraud is detected by internal audits and only 4 percent is detected through external audits. As you can see, a lot gets past those who should know what to look for. Sadly, most CPAs do not take classes related to fraud during their formal education period. This is probably due to the fact that not many schools offer a fraud examination course or because it's not a topic that is tested on much in the CPA exam. 

Fighting fraud calls for somebody who has the education, training, and experience. A CFE does, many CPAs and Internal Auditors do not.


I need to hire somebody to investigate a possible financial crime.  Whom should I hire?

That depends on how you intend to investigate it.  In Washington State, if all you're doing is having somebody review the books, then a CPA, CFE, or forensic accountant can do that for you. If you need somebody to do more than review the data (which includes interviewing anyone or looking for evidence outside the organization), then you need to hire somebody licensed as a Private Investigator or a CPA. A CFE, or forensic accountant without a PI license is committing an illegal act by investigating any crime, be it financial or otherwise, if  not licensed  as a private investigator. While there are exemptions to private investigator licensing, CFEs are not exempt (see RCW 18.165.020 for a list of exemptions).  Forensic accountants are exempt only if they do not go beyond the analysis of data task.

What is Occupational Fraud?

According to the ACFE, "Occupational fraud - fraud committed against the organization by its own officers, directors, or employees - constitutes an attack against the organization from within, by the very people who were entrusted to protect its assets and resources.

We have seen this numerous times, be it in business partnerships, non-profit organizations, or even sole proprietor businesses. Those who are trusted most are sometimes the ones violating that trust most. Sometimes to the tune of millions of dollars (even in small businesses).

As we say in the fraud investigation industry, "Trust is not a control."

What is due diligence and why should I have it done?

Due diligence is the process of investigating and evaluating a person or business.  The purpose for conducting due diligence is to ensure that what you are investing in, be it an employee or a business, is truly what it says it is.  We’ve all heard of Bernie Madoff.  The question regarding Mr. Madoff shouldn’t be “how did he swindle so many people?” rather it is “why didn’t people do their homework and learn more about him before giving him their money?”

When considering a future employee, particularly one who will be entrusted with money, corporate reputation, or other resources, a company should conduct due diligence to ensure that the person is, indeed, whom they say they are, and that no surprises will be discovered after hiring them.

Due diligence differs from a standard background check, in that far more resources are used and much more information is gathered to ensure the best possible decision is made.  Due diligence looks at past employment, references, education, criminal and civil actions, to list just a few of the things reviewed.  A basic background check might verify past employment and check for a criminal record, along with a drug test, but that may be all that’s done.  Would you base an important decision, such as you’re company’s financial health, on such a skimpy investigation?


What is a specialized fraud prevention program?

A specialized fraud prevention program is one that is set up specific to your company’s needs and budget.  It is designed to ensure your business reduces the risks associated with fraud at a cost that is commensurate with planned outcomes.  No amount of money can eliminate fraud, but many risks can be mitigated for far less than the annual cost of fraud committed against your business. 


Why should we develop a fraud prevention program?

According to the ACFE’s 2018 Report to the Nation, the average business loses five percent of their revenues to fraud.  Companies with fewer than 100 employees had the most occupational fraud committed against them (accounting for 28% of all acts).  Companies with 100 to 999 employees accounted for 22% of all occupation fraud acts.  In the United States, these companies suffered, on average, a loss of $200,000 for small businesses and $100,000 for businesses with 100 to 999 employees.. 

Smaller companies, those least able to afford it, generally suffer the most from fraud.  As with medicine, an ounce of prevention is worth a pound of cure.  Developing a fraud prevention program will reduce the likelihood of having fraud committed against your business, and thereby saving you money in the long run.


What’s the difference between fraud detection, a fraud investigation, and a fraud examination?

Fraud detection is simply the discovery of fraud.  Fraud is usually detected by managers or others within an organization (internal or external auditors) either through an internal review or a tip. 

A fraud investigation is a process of investigating acts of fraud, which includes obtaining evidence, interviewing witnesses and suspects, preparing reports, and testifying to findings in a court of law. 

Fraud examination is a methodology for resolving fraud allegations from inception to disposition. This involves obtaining evidence and taking statements, writing reports, testifying to findings, and assisting in the detection and prevention of fraud (ACFE 2010 Fraud Examiner’s Manual).


What kinds of fraud do you investigate?

We investigate many types of occupational fraud and white collar crime.  The type of fraud that can be committed is innumerable.  It can range from an employee using a company credit card to purchase gas for resale, to payroll managers creating ghost employees, to CEO and CFOs taking company funds and moving them offshore. Simple put, if it's occupational fraud, we investigate it.  


Do you help out Non-Profit Organizations?

In a nutshell, yes. Non-profits are one of the hardest hit industries when it comes to fraud. We not only help investigate fraud, but are more than happy to help you set up a fraud prevention program.

Do you help out I-502 compliant companies?

We can help I-502 compliant companies only to the degree of investigating fraud. Unfortunately, we are currently unable to develop a fraud prevention program due to the federal laws. If you wish us to investigate fraud in your I-502 business you will need to contact an attorney (or request we contact one for you) to work through. 

Do you perform other criminal and civil investigations?

Yes.   We have the experience and knowledge to help businesses, government entities, and attorneys investigate civil or criminal acts. Please call or e-mail us to determine if we can meet your needs.

We have many contacts in the private investigation field that we would be happy to refer you to for such things digital forensics, surveillance, and accident/injury investigation.

What geographic areas do you serve?

We are licensed in Washington State, and as such, only perform investigations in Washington. Most of our work is done in the Seattle-Tacoma-Olympia area, but we are willing to travel anywhere in the state where we're needed.

For basic forensic accounting services for fraud, where we review material provided (such as QuickBook files, bank statements, etc.), we can offer our services nationwide. 


How confidential are your services?

Extremely.  The role of a private investigator is exactly that, to investigate private matters.  This means that, with the exception of testifying in court, all matters related to your case are confidential, held between Peet & Associates, LLC and you.  Furthermore, Washington State Law specifies that divulging confidential information obtained in the course of any investigation is grounds for disciplinary action.


Do you work with individuals?

Rarely.  We prefer to work with businesses and attorneys, but we will be glad to listen to your issue and will respond to them.


What are your rates?

Our rates are commiserate with those of other firms that specialize in corporate fraud examination.


Are you licensed and insured?

Yes.  Peet & Associates LLC holds a Washington State Private Investigative Agency license (#1671).  The company is insured according to Washington State Law.