Page 59 - Encyclopedia of Business and Finance

eobf_A 7/5/06 2:54 PM Page 36

Assets

ASSETS & Canada only), +1 (512) 478-9000 (phone numbers);
+1 (512) 478-9297 (fax); or, http://www.cfenet.com.
SEE Financial Statements
SEE ALSO Forensic Accounting; Fraudulent Financial
Reporting

ASSOCIATION OF
Bernard H. Newman
CERTIFIED FRAUD
EXAMINERS
The Association of Certified Fraud Examiners (ACFE)
was established in 1988. Its founder, Joseph T. Wells, was ASSURANCE SERVICES
previously a public accountant and also a special agent of Assurance services are a class of services provided by certi-
the Federal Bureau of Investigation, with experience in fied public accountants (CPAs) in public practice. While
public accounting and in heading his own consulting the term is sometimes used inconsistently among individ-
firm. He continues to be active in the ACFE and serves as ual CPA firms, the American Institute of Certified Public
chairman of the board of the association. As of mid-2005, Accountants (AICPA) Special Committee on Assurance
there were more than 34,000 members worldwide, with Services defined assurance services as “independent pro-
approximately 120 local chapters. Over forty states in the fessional services that improve the quality of information,
or its context, for decision-makers.”
United States have at least one local chapter.
Assurance services are rooted in the CPA’s tradition of
The ACFE’s mission, as stated in its official materials, is
independent verification of data prepared by others. They
to reduce the incidence of fraud and white-collar crime and
to assist the membership in its detection and deterrence. The differ from many services historically provided by CPAs in
primary means of achieving this mission are through a certi- that they represent an expansion of the information and
forms of reports provided. Indeed, they represent an evo-
fication program, continuing education and training of
lution in the nature of services provided by CPAs, as CPAs
members, and publications and a range of research activities.
have begun to provide services not just on accounting
Local chapters provide activities to enhance professional information but on many other types of information that
knowledge and skills while the national office offers semi- people need in order to make decisions.
nars, conferences, custom training, and antifraud materials
to universities and other entities. Activities are provided at
locations throughout the world. THE EVOLUTION OF CPA SERVICES
Since the early part of the twentieth century, CPAs have
Publications are available for those preparing for the
audited financial statements. The audit is the CPA’s defin-
examination for professional certification, as well as for
ing service and, aside from preparation of income taxes,
members and others interested in extending their knowl-
edge of fraud detection and prevention. Additionally, the the service most closely associated with the CPA profes-
sion. In an audit of financial statements, the CPA exam-
ACFE provides leadership, through speeches, newsletters,
ines the transactions that underlie an entity’s financial
and other means, in maintaining public confidence in the
statements and reports whether the financial statements
integrity and objectivity of its members.
are fairly stated in conformity with generally accepted
Of the 34,000 members of the ACFE, more than accounting principles. Such an opinion is required by the
15,000 are certified fraud examiners. Certification Securities and Exchange Commission (SEC) for compa-
requires prior experience related to detection or deterrence nies whose stock is publicly traded and is often demanded
of fraud. Those who are certified participate in continuing by others, such as lenders, for entities that are not subject
educational programs. to the SEC.
Those seeking certification must first be associate Figure 1 is a pictorial depiction of the relationship
members of the ACFE. Requirements for membership among CPA services.
include a 10-hour computer-based examination that
Beginning in the 1970s, financial statement users
includes topics related to criminology and ethics, financial requested that CPAs provide some of the benefits of
transactions, fraud investigation, and legal elements of audits at a lower cost. As a result, CPAs began providing
fraud. a lower-level service, called a review, on financial state-
More information is available from the ACFE at its ments. Reviews are based on inquiry and analytical pro-
world headquarters: The Gregor Building, 716 West cedures applied to financial statement amounts, rather
Avenue, Austin, TX 78701-2727; (800) 245-3321 (USA than on the more rigorous procedures required in an

36 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION