ACFE Certified Fraud Examiner (CFE) 1 Practice Exam

Question: 1 / 400

What does predication refer to in the context of fraud investigation?

Circumstances suggesting fraud may have occurred

Predication in the context of fraud investigation refers to the specific circumstances or facts that suggest that fraud may have occurred. Establishing predication is essential in the investigative process as it serves as the basis for initiating an investigation. It involves a preliminary assessment of information to determine whether there are enough indicators or red flags to pursue a deeper examination into potential fraudulent activities.

In the realm of fraud examination, recognizing predication allows investigators to focus their resources and efforts on credible leads that warrant further scrutiny. Without such predication, pursuing an investigation can be unwarranted and may lead to unnecessary expenditure of time and resources. Thus, predication acts as a fundamental criterion that guides investigators in their decision-making processes regarding fraud detection and conclusions drawn thereafter.

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The physical evidence of fraud

The testimonies of witnesses

The methods used to conceal fraud

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