The Show Must go on! Legitimization Processes Surrounding Certified Fraud Examiners’ Claim to Expertise

Abstract

This article investigates how the Association of Certified Fraud Examiners (ACFE) sought to gain legitimacy among its members as a group possessing expertise in the prevention and detection of fraud. Using theoretical concepts devised by Goffman [1959. The presentation of self in everyday life. Garden City, NY: Doubleday] about performance and impression management, the ACFE’s performance is studied from the perspective of the show put on by the association’s leaders, and through our analysis of the response to this show from its members. Thanks to sophisticated data collection (ethnographic endeavor, interviews with CFEs, and document analysis), we found that the ACFE’s promotional machinery comprises pragmatic, moral, and epistemic claims. Our analysis indicates that pragmatic legitimacy plays a central role in enrolling members as ambassadors of the CFE designation – in spite of the skepticism that they tend to have regarding the association’s moral and epistemic claims. We are therefore confronted with a spread of claims to expertise taking place despite a degree of internal discordance – as if member discomfort with certain aspects of their association’s discourse is immaterial to the construction of the association’s external legitimacy. Ultimately, our findings lead us to reflect on the social value associated with the spread of credentialism in today’s society.

Keywords:

• Fraud
• Knowledge claims
• Legitimization of antifraud expertise
• Representational performance and impression management

Acknowledgements

We especially thank the CFE practitioners who agreed to be interviewed and provided us with key insights regarding their experience. We benefited from the comments made by Associate Editor Carlos Larrinaga, two anonymous reviewers, Marion Brivot, Darlene Himick, Aziza Laguecir, Angélique Malo, Mélanie Roussy, Ebba Sjögren, and workshop participants at Université du Québec à Trois-Rivières and at Université Laval (Québec City). We also acknowledge the comments from participants at the 2018 Interdisciplinary Perspectives on Accounting Conference (Edinburgh, Scotland), and the 2019 EIASM Workshop on Preventing Accounting Scandals: Practices and Practitioners (Monaco). Finally, we gratefully acknowledge the financial support from the Education and Good Governance Fund (EGGF) of the Autorité des marchés financiers (AMF), the Foundation of Québec CPAs, and the Social Sciences and Humanities Research Council of Canada.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 On January 1, 2014, the Chartered Professional Accountants of Canada (CPA Canada) joined forces with the American Institute of Certified Public Accountants (AICPA), with a view toward offering the Certified in Financial Forensics (CFF) credential, a North American qualification in financial investigation. Despite the announcement of this joint initiative, several other players are involved in the arena, all trying to establish, reinforce, and consolidate claims to antifraud expertise. Individuals who want to become fraud detection experts can now choose from a range of credentials, including the CFF, the Certified Fraud Examiner (CFE), the Certified Financial Crime Investigator (CFCI), and the Certified Anti-Money Laundering Specialist Financial Crime Investigator (CAMS-FCI). While financial auditors for a long time had a head start in fraud prevention and detection (Wyatt, 2004), accounting institutes and the principal financial audit players (the Big Four firms) now appear to be concentrating on building partnerships with certain associations, rather than fighting for a strong and direct presence in this field of expertise. At the time of data collection, Ernst and Young, for example, was involved with the ACFE in the development of several initiatives. Similarly, Deloitte Canada sent all its members and partners an email on July 21, 2016, using statistics from the ACFE to promote some of the firm’s services – thus, reinforcing the legitimacy of the ACFE, an association that developed into both a competitor and a major ally in the search for antifraud knowledge and expertise. These are just two of many examples.

2 The information on the ACFE was taken from its official website at acfe.com, accessed on September 26, 2018.

3 Goffman makes an important distinction between the notion of frontstage (where the actor performs), the notion of backstage (behind the scenes of the show), and the notion of offstage (when the actor is away from the space where the performance is given). The data related to the members were collected as much frontstage (while they attend the show staged by ACFE leaders as part of the conferences), backstage (while they are exterior to the conference rooms but still within the performance venue), and offstage (while members are outside the venue with no possibility for ACFE leaders to perceive their expressions). Since the interviews were conducted in candidate workplaces or in external locations and not during the conference while they were behind the scene, the interview data is more representative of an offstage audience than a backstage one. Data representing the backstage will be more closely associated with discussions and observations made in the corridors or between sessions during conferences.

4 Our use of the feminine pronoun in the paper is aimed only at facilitating reading.

5 According to Suchman (1995), one way to achieve pragmatic legitimacy is through exchange legitimacy – i.e., when support for an organization is based on the expected value, for a given audience, of the organization’s actions.

6 The first author already had a CPA designation. She previously worked for some years as an auditor in an accounting firm. She earned her Ph.D. in 2017. Her sole motivation for obtaining the CFE credential was to realize this research project. After attending her first ACFE conference as an uncertified member, she soon realized the process leading to the CFE credential would help her better understand the ‘realities’ experienced by ACFE members. She also realized that the CFE designation could allow her to gain the confidence of CFE interviewees more easily.

7 During conferences, many participants regularly take photos and videos. The ACFE leaders also produce segments of the video conferences, available on their website for informational and advertising purposes. Taking photographs and videos was therefore not surprising to the attendees and did not noticeably change in their behavior.

8 Data referring to the ACFE’s frontstage performance result from steps taken by ACFE leaders to promote the association’s claims regarding its expertise, mission, and added value for the member. The data include information found on the association’s website, in reports issued by the ACFE, and in the association’s publicity material. Extensive data were collected relating to the show put on by the ACFE for its members, notably in the staging of its conferences and the design of its website. Some participants also provided information about the ACFE’s frontstage during their interviews. The data that refer to members’ frontstage come from observation during conferences and interviews as members talk about how they behave when facing external parties. Backstage data come from discussions with members during the conference in the main hall or between presentations. Offstage data principally derive from interviews with ACFE members or the personal experience of the first author as a candidate for the CFE credential. Offstage data are based mostly on interview transcripts, training manuals, the exam, and notes written in the researcher’s daily diary. Backstage and offstage data are quite similar since in both cases, the actors were not in performance at the moment when they expressed themselves. However, it can be presumed that interviewees express themselves more freely while offstage since there is no chance of being surprised or heard by ACFE leaders. Note that data from a single source, for example, interviews, can simultaneously concern frontstage and backstage/offstage areas.

9 ACFE members pay an annual membership fee in exchange for certain benefits, such as access to Fraud Magazine and certain members-only sections of the association’s website. A significant proportion of members are CFEs, indicating that they followed the CFE training process, submitted an application and passed the exam to earn the title. In Québec, at the time of data collection, the ACFE had around 400 members, 200 of which were certified CFEs. Non-certified CFEs are called associate members.

10 Specific participants were chosen to ensure adequate representation of each sector where ACFE members are found.

11 This suggests a legitimate question: Could the audience team have been the general public, CEOs/CFOs, or educational establishments? It undoubtedly could, but this study concentrates instead on a particular internal audience (ACFE members) whose significance became increasingly apparent during the course of data collection. Of course, the ACFE actively promotes publications targeted at external audiences, such as the Report to the Nations (ACFE.com, 2015, 2016c), which contains several statistics on fraud. Nonetheless, although the ACFE’s ultimate search for legitimacy necessarily requires external recognition of the title, we maintain that the association’s efforts initially need to focus on recruiting and retaining new members to join the team of actors, thus becoming carriers of the ACFE’s message.

12 Members of the ACFE can set up local chapters in towns and cities, subject to approval by the ACFE. CFEs authorized to set up a local section must first set up a non-profit organization whose main purpose is organizing activities for local members. Members interested in taking part in the activities must then join the local section and pay annual membership fees, as well as fees for each activity. The ACFE provides initial financial support of $500 for each local section and contributes to the organization of their activities. The local chapter leaders must be elected by other members of the chapter, and must fulfill their functions on a voluntary basis.

13 Although anyone can participate in ACFE conferences by paying the registration fees, the vast majority of attendees are members of the organization.

14 Some participants were disappointed by the response from their working environment to the CFE designation. One participant resolutely stressed that the title had no recognition in the governmental sector: ‘As for recognition in our environment here: there’s none at all. Most people don’t even know what it is. […] It doesn’t give me any advantage for promotions.’ However, although organizational recognition appears to have been minimal for some interviewees, there was a degree of recognition in other settings, such as in courts.

15 The Pre-Assessment can only be taken once, at the start of the process for earning the CFE. Like the final exam, this multiple-choice test assesses the candidate’s strengths and weaknesses and issues a grade for each of the four modules assessed: fraud prevention and deterrence, financial transactions and fraud schemes, investigation, and law. The practice questions are similar to the Pre-Assessment but can be taken as often as the participant wishes. The main difference between the Pre-Assessment and the practice questions is that the Pre-Assessment covers all four modules, while the practice questions only concern one module, and so they must be taken one module at a time. Also, the final exam can be taken in four separate sessions, since there is one exam for each module.

16 The ACFE requires members to complete 20 h of continuing professional education every year, including at least two hours about ethics. According to the members interviewed, there is very little ethics training offered apart from ACFE courses. The cost of attending the annual conference, which covers all the annual continuing professional education requirement, including ethics training, is approximately US$1,500, plus the necessary travel and accommodation costs.

17 Suchman (1995) states that there are four subtypes of moral legitimacy: structural legitimacy, procedural legitimacy, consequential legitimacy, and personal legitimacy. While there may be some similarities between procedural legitimacy (which relates to the signal provided through the adoption of socially accepted techniques, methods and procedures) and epistemic legitimacy, we believe that the two concepts are sufficiently distinct. Epistemic legitimacy is not predicated on ‘routines’ or ‘procedures’ to serve as a means to achieve legitimacy, but rather on the promotion of a body of knowledge to demonstrate the scientific character of the association’s claim to expertise.

18 As discussed earlier, Suchman (1995) also points to cognitive legitimacy. For the purposes of this article, we do not focus on this form of legitimacy since it emanates from a cognitive process that is difficult to investigate in the context of semi-structured interviews.