Predication
Definition
The reasonable basis that justifies opening a fraud examination. The ACFE holds that no examination should begin without adequate predication, meaning a fact, circumstance, or allegation that would lead a reasonable, professionally trained person to believe a fraud may have occurred. Without predication, an examination risks harming innocent people and may be legally impermissible.
Related terms
- Chain of custody
- The documented chronological record of who collected, handled, transferred, and examined a piece of evidence. For digital evidence, chain of custody includes...
- Fraud triangle
- A model, developed by criminologist Donald Cressey, proposing that occupational fraud requires three converging conditions: pressure (financial need or incentive), opportunity (a...
- Spoliation
- The destruction, alteration, or concealment of evidence relevant to a legal proceeding. Spoliation can result in adverse inference instructions to a jury,...
- ACFE Fraud Examiners Manual
- The comprehensive reference published by the Association of Certified Fraud Examiners that defines the body of knowledge for the CFE credential. Covers...
- Asset misappropriation
- The largest Fraud Tree branch, covering schemes in which an employee steals or misuses the organisation's assets. Subcategories include cash schemes (skimming,...
- Audit committee referral
- A mandate from the board's audit committee to conduct a forensic investigation. Because the audit committee is independent of management, this pathway...
- Benford's Law analysis
- A data analytics technique based on the observed distribution of leading digits in naturally occurring financial data. Significant deviations from the expected...
- Certified Fraud Examiner (CFE)
- A professional credential awarded by the ACFE. It demonstrates competency across four domains: financial transactions and fraud schemes, law, investigation, and fraud...
- Chartered Accountant (CA)
- A professional accounting designation awarded by bodies such as ICAI (India), ICAEW (UK), ICAS (Scotland), ICAZ (Zimbabwe), and equivalent national institutes. CA...
- Engagement partner
- The senior professional who holds overall responsibility for a forensic audit engagement, manages the relationship with the client and legal counsel, reviews...
- Engagement scope
- The defined boundaries of a fraud examination: the organisational units, time period, transaction types, and evidence sources to be examined. Scope is...
- Engagement trigger
- The event, report, or observation that initiates a forensic audit engagement. Common triggers include whistleblower reports, regulatory referrals, audit anomalies, and management...
Explained in these topics
- Engagement Triggers and Referral PathwaysThe totality of circumstances that give a forensic auditor a reasonable basis to believe that fraud or misconduct may have occurred, sufficient to justify comm...
- Evidence Gathering Methods in Fraud ExaminationsThe factual basis that justifies opening a fraud examination. Without a legitimate predicate, an examiner has no mandate to gather evidence and any evidence co...
- Forensic Auditing: Definition and ScopeThe totality of circumstances that would lead a reasonable, professionally trained person to believe a fraud has occurred, is occurring, or will occur. Under t...
- Legal and Regulatory Framework for Forensic AuditsThe totality of circumstances that would lead a reasonable, professionally trained person to believe fraud has occurred, is occurring, or will occur. Required...
- Predication and Engagement Planning in Fraud ExaminationsThe totality of facts, circumstances, and allegations that would lead a reasonable, professionally trained person to believe a fraud may have occurred, is occu...
- Roles and Qualifications of Forensic AuditorsThe reasonable basis that justifies opening a fraud examination. The ACFE holds that no examination should begin without adequate predication, meaning a fact,...
- The Fraud Triangle: Pressure, Opportunity, and RationalisationThe totality of circumstances that gives a fraud examiner a reasonable basis for suspecting fraud has occurred. In the context of the fraud triangle, predicati...