Certified Fraud Examiner Practice Exam 2025 – All-in-One Guide to Master Your Certification!

Predication in fraud investigations refers to the initial indications or circumstances that suggest that fraudulent activity may be occurring or may occur in the future. Essentially, it involves collecting preliminary evidence or intelligence that supports the belief that further investigation is warranted. This can include anomalies in financial data, irregularities in accounting practices, tips from informants, or other indicators that raise suspicion.

Understanding predication is crucial as it forms the foundation upon which investigators base their actions and decisions regarding the investigation. It helps to ensure that investigations are not initiated without sufficient cause, thereby preserving resources and focusing efforts on legitimate concerns.

Other options may touch upon different aspects of the investigative process but do not encapsulate the essence of predication. For instance, while evidence collected is vital for investigations, it does not define the reason for starting the investigation in the first place. Similarly, legal requirements pertain more to compliance and regulatory frameworks, and conclusions drawn occur after investigations are completed, rather than at the initiation stage where predication is concerned.