Educating Future Fraud Fighters: The Power of Case-Based Learning

As fraud schemes evolve in complexity, the skills required of fraud examiners must go far beyond textbook definitions and binary classifications. The next generation of Certified Fraud Examiners (CFEs) must navigate blurred ethical boundaries, hidden conflicts of interest and inconsistent regulatory standards across industries and borders. 

To meet this challenge, we need to shift our pedagogical approach. We must do more than teach fraud — we must teach how to think about fraud. The most effective way I have found to do this is through case-based learning. 

Reconstructing Fraud in All Its Complexity 

One of the key findings from my research into fraud risks in lean organizations is that the concept of fraud is not universally understood. In practice, fraud means different things to different stakeholders. For example: 

• A library security officer may not consider it fraud when someone walks out with a book without registering it. They may perhaps assume forgetfulness rather than malicious intent. 
• In law, fraud is framed around mens rea and actus reus, with clear thresholds of intent and harm. 
• In retail loss prevention, fraud can be equated with malice, intent and shrinkage. 
• In ethics literature, it may be treated as a deviant workplace behavior, sometimes without formal criminality. 
• Cross-border practices differ. For instance, the legal and regulatory definitions and scope of bribery differ across the U.K., U.S. and EU. 

These divergent understandings impact how organizations interpret, detect and counter fraud. Without appreciating such context and nuance, we risk preparing students with abstract definitions rather than actionable insight. 

This is why in my forensic accounting and fraud risk modules, I embed case-based teaching, allowing students to wrestle with real-world ambiguity rather than hypothetical clarity. 

Simulating Fraud and Not Just Explaining It 

In the classroom, I reconstruct real-life fraud cases such as Adelphia, HIH Insurance and Bond Corp. These are modified and anonymized, with simulated data, company memos, whistleblower tips and internal audit reports. 

Students are grouped into roles: investigators, internal auditors, external consultants and senior managers. As they navigate these messy scenarios, they are asked to: 

• Examine transactions and emails. 
• Interpret partially conflicting witness statements.
• Make risk-based decisions with incomplete data. 

Some realize too late that a red flag was overlooked. Others debate whether a violation was malicious or merely negligent. These reflections mimic the challenges that confront fraud examiners in practice, where low intent is often unclear and judgment must be exercised under uncertainty. 

Results That Reflect Reality 

Through this approach, students do not merely memorize fraud schemes. They experience the complexity of detecting, managing and preventing fraud. This experiential learning builds: 

• Professional skepticism: questioning even when data seems clean. 
• Judgment under pressure: deciding what to report, escalate or monitor. 
• Forensic curiosity: following financial trails and behavioral cues.
• Ethical resilience: holding one’s ground even when fraud is minimized or rationalized. 

In post-case debriefings, students frequently express how surprised they are by their own susceptibility to moral disengagement — or how easily they rationalized "small" violations. These are exactly the lessons they must learn now, before they face them in the field. 

Shaping the Future of Fraud Examination 

Case-based learning is a professional development strategy, as it is a teaching method. It enables future CFEs to: 

• Understand fraud as a violation of internal controls, not just external law. 
• Navigate the cultural and organizational norms that shape fraud tolerance. 
• Develop a mindset that sees fraud risk not as a static list of red flags, but as a fluid interaction of intent, context and consequence. 

As someone who has both researched and taught fraud for over a decade, I have found that the case method best equips students with the critical thinking and investigative reflexes they need. 

Teaching Judgment, Not Just Rules 

Fraud education must evolve. To truly prepare tomorrow’s examiners, we must go beyond binary definitions and idealized scenarios. We must equip them to operate in systems where: 

• Rules are unclear. 
• Intent is contested. 
• Structures may enable fraud.
• Responses require courage as much as competence. 

Through case-based learning, we provide students with what they will need most in the workplace: not just content, but judgment. Not just knowledge, but clarity and resilience in the face of ethical ambiguity.