Certified Fraud Examiner Practice 2025 - Free Practice Questions and Study Guide

The Asset Method is particularly effective in determining whether a person's assets exceed their income sources. This approach involves assessing a person's net worth by analyzing their total assets (things they own) and comparing them to their liabilities (debts). By establishing the individual's financial position, investigators can identify discrepancies that suggest potential fraud.

For instance, if a person has a significant amount of assets but claims a modest income, it raises a red flag. This discrepancy can indicate illicit gains or hidden sources of income, as the individual’s declared income does not support the wealth displayed through their assets. Thus, the Asset Method serves as a valuable tool in fraud examination, helping to uncover potential fraud through asset verification and evaluation.

Other methods, while useful for different analyses, do not directly focus on comparing assets to income. The Bank Deposits Method concentrates on funds deposited in bank accounts, the Expenditures Method looks at the expenses to infer income, and Income Analysis focuses purely on income sources without assessing asset levels. Each of these methods has its purpose but does not adequately demonstrate the relationship between assets and income as clearly as the Asset Method does.