Investigation engagements – Forensic Accounting. Touches on law and accounting Maximum Word Count: 2,500 (not including references) Students will be presented with a case study and will be required
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Investigation engagements – Forensic Accounting. Touches on law and accounting
Maximum Word Count: 2,500 (not including references)
Students will be presented with a case study and will be required to critically reflect on the case study by analysing the relevant issues arising from the identification, collection and preservation of evidence, and the preparation of an investigative interview.
In this assignment students are required to demonstrate their understanding of the identification, management and analysis of various types of evidence, the preparation of an investigative interview, and the concepts of evidence integrity and chain of evidence. Students must also show evidence of research.
See Assessment Guide for more information.
This Assessment Task relates to the following Learning Outcomes:
- Explore and analyse various types of evidence essential to advance investigations and facilitate proper and secure recording of evidence, using information management systems to preserve the integrity of the data.
- Formulate and execute an investigative interview to obtain complete, accurate, and reliable information to achieve investigation objectives.
- Synthesise the concepts of evidence integrity and chain of evidence in the identification, acquisition and storage of data to prevent contamination and maintain admissibility of evidence.
The questions from the case study are:
Part A (1,000 words) For each exhibit, critically evaluate the documents by explaining how the available information advances the investigation into the allegations and suggest two additional lines of inquiry to gather further evidence (for example, how would you use the specific exhibit to collect additional and relevant evidence to assist with your fact-finding).
Part B Using any software of your choice, create a relationship chart to map the connections between affected individuals, transactions and assets.
Part C (1,000 words) Prepare 10 interview questions for the bookkeeper responsible for processing the payments of all invoices and timesheets found in the search warrant. For each question, critically assess how the question will enhance the extraction of all available information (focusing on both style and nature of question). Part D (500 words) Explain how you would preserve the integrity of the evidence collected in both the search warrant and interview with the bookkeeper.
I have attached the rubric, please use that to answer and write your responses.
I also attached the case study and 2 papers on interviewing and digital forensics which may be useful to reference.
Investigation engagements – Forensic Accounting. Touches on law and accounting Maximum Word Count: 2,500 (not including references) Students will be presented with a case study and will be required
Chapter 16 The Art of the Interview Thomas W. Golden and Michael T. Dyer The Art of the Interview Chapter Title: The Art of the Interview Chapter Author: Golden, T. W. Title: A Guide to Forensic Accounting Investigation Book Author: Steven L. Skalak ; Thomas W. Golden ; Mona M. Clayton ; Jessica S. Pill; Chapter Number: 16 ISBN: 9780470599075 Start page: End page: Publisher: John Wiley & Sons, Inc. Place of publication: Hoboken, NJ, USA Publication Date: 2015 DOI: 10.1002/9781119200048 An interview is a conversation with a purpose. The purpose is to obtain information and, in some cases, an admission. Experienced forensic accounting investigators know that the great majority of white collar crimes are solved by a skilled interviewer, not by other forensic means. Arguably, there is no more compelling proof of a crime than a perpetrator’s voluntary admission. Effective interviewing is an art to be studied, a skill to be honed. In the later twentieth century, interviewing also emerged as a science, drawing on decades of psychological and sociological research, including a great deal that had been learned from wartime interrogation. Volumes of scholarly research exist, and more are published each year. Yet whatever scientific techniques are brought to bear—Gudjonsson’s cognitive-behavioral model of admission, for example, or Reik’s psychoanalytic model of admission1—in the end, the interview process itself is a subtle art that draws on the experience and skill of the practitioner. The interviewer must plan effectively beforehand, approach the session with a variety of tools and tactics to choose among, follow a line of questioning, evaluate its effectiveness as the interview proceeds, and, if necessary, move seamlessly to a new approach. Effective interviewing is more than a well-executed analytical exercise; it requires great sensitivity to the subject’s feelings and thoughts. Interviewing skills must be developed. The best way to develop them is to sit in with or observe experienced interviewers at work. Some courses provide excellent training in conducting interviews, but just as learning to drive a vehicle requires considerable road time, so interviewing requires conducting interviews with an experienced mentor close at hand. After the interview, interviewers should critique how it went, summarize what was learned, focus on what could have been learned more quickly, review where the questions flowed smoothly and where they disrupted the flow, take note of what leads were developed, and discuss any key questions that went unanswered or, even worse, unasked. Interviewers must learn to hear and see what works and what does not and must learn from successes and failures. There is no one right way to conduct an interview. Inducing someone to make an admission is a difficult task indeed. The interviewer must be prepared to assume a variety of stances, moods, or roles. Interviewers can be sympathetic, logical, confrontational, accusatory, or intimidating. Generally, in dealing with white collar criminals, intimidation is less successful than the softer, sympathetic approaches, but that does not mean that a hard line is never appropriate. DIFFICULTY AND VALUE OF OBTAINING AN ADMISSION Later, we describe the different types of interviews that a forensic accounting investigator will encounter; however, note that the admission-seeking interview is the most challenging of interviews and requires substantial skill on the part of the interviewer. The interviewer must quickly evaluate the success of the line of questioning and be prepared to move seamlessly, if necessary, to a new strategy and another line of questioning. The interviewer must evaluate what may persuade the witness to provide information that the witness has no intention to disclose. The success of an interviewer depends more often on the ability to craft a persuasive argument than the ability to craft precise questions. Remember the opening sentence to this chapter: An interview is a conversation with a purpose. The good interviewer constructs a line of questioning interspersed with selected commentary and documents in an attempt to induce the subject to confess. Simply crafting a line of questioning without regard to building a persuasive argument quickly turns into a note-taking assignment unlikely to benefit the purpose of the investigation. Even highly experienced interviewers know that it is extremely difficult to get someone to admit to a crime. Go back to your early years as an adolescent, or recall instances with your own children. The car has a mysterious dent in it. The window is broken. You were caught cheating on an exam. You know you did something wrong, you feel guilty about it, and the last thing you want is to be discovered. Your dad comes to you asking about the dent in the car, and your first reaction is, “What dent?” You do not want to lie; you just want to deflect the question. You want to keep deflecting until he drops the issue. If he does not let it go but keeps coming at you, he slowly decreases your desire to continue lying. If your dad is good at getting to the truth, he says things that increase your desire to tell the truth. “Son, I know you didn’t mean to do it because you are a good kid. If you caused the dent, now is the time to discuss it.” In most investigations, obtaining an admission can be of significant benefit to the overall objectives of conducting an investigation, especially when the client wishes to refer the matter to a prosecutor. (See Chapter 19.) There is no one successful strategy—hence, the title of this chapter, “The Art of the Interview.” Keep in mind that we are usually not dealing with a hardened criminal but, rather, with someone who fits the profile of a typical white collar criminal. (See Chapter 2.) Incorporating a sequence of interviews into an investigation can be a costly strategy, but the value of obtaining an admission cannot be underestimated. An admission can go a long way toward ensuring a successful prosecution should a referral be made to a prosecutor.2 PLANNING FOR THE INTERVIEW In preparing for the interview, a number of important issues must be considered. A good starting point is the question of what the interview subject is likely to know. Solid investigative work and previous interviews can help the forensic accounting investigator focus on the subject at hand, develop a line of questioning designed either to carry the investigation forward or to elicit an admission, and contemplate what approach is likely to be the most effective. Among the issues to consider are the following. Timing. The forensic accounting investigator must ensure that there is adequate time for a thorough interview. If the subject says, “I can drop by from 4 to 4:30, but then I have to pick up my kids,” the interviewer should schedule another time. The interviewer must insist on adequate time and resist any suggestion that the interview be spread out over several sessions. Location. Ultimately, the forensic accounting investigator must conduct the interview at whatever location the subject insists on, but whenever possible the interview should be conducted in a business environment that can be controlled. The ideal setting is a room with few distractions: no windows to look out, no clock, no photos, books, or model airplanes. The goal is to create an environment in which the subject has nothing to look at except the interviewer and that makes clear to the subject, not so subtly, just who is in control. The forensic accounting investigator should plan to seat the subject facing the interviewer or interviewers, with a plain wall behind the interviewer. When possible, the interviewer should sit between the subject and the door. Of course, the subject cannot be held against his will, but if the subject wants to walk out, the layout of the room should make that act as uncomfortable as possible for the subject. On the other hand, the forensic accounting investigator must be flexible. If the client no longer employs the person being interviewed, the interview is likely to take place outside the office. The forensic accounting investigator should offer to go to the subject’s residence or place of employment but be prepared to conduct the interview even in a car or at the mall. The forensic accounting investigator should not let a disagreement over location become an obstacle to gaining information. Legal issues. Interviews, and especially admission-seeking interviews, may raise certain legal issues and may expose the company and the forensic accounting investigator to certain risks, one of which is a defamation lawsuit. The forensic accounting investigator should proceed only after consulting with counsel. A lone, zealous forensic accounting investigator should not go off on her own. The forensic accounting investigator should seek and obtain team decisions. Recording. Whether to electronically record interviews is a matter of some debate. Recording an interview works against the goal of lowering the subject’s defenses. While federal law does not preclude such recordings, you may be in violation of state law if you decide to record an interview covertly (if only one party is aware that the conversation is being recorded—in other words, if the forensic accounting investigator records without the interview subject’s consent). Some states permit covert recording of an interview, and others do not. Many states require that both parties consent to the recording. A recorded interview can be a powerful negotiating tool in settlement talks. Many factors must be considered before deciding whether or not to record an interview, including state law, the forensic accounting investigator’s experience, and the advice of counsel. If you are working at the direction of law enforcement or under a 6(e) order, you may be subject to different restrictions. In some jurisdictions employees may have control over the question of whether to record pursuant to local labor law. They may, for example, have the right to record the interview for their purposes if they want. Polygraph. The Employee Polygraph Protection Act, passed by Congress in 1988, does not allow private employers or their representatives to require employees to take a polygraph, with few exceptions. It also prohibits employers from disciplining or discharging employees who refuse to take the test.3 Many commentators have suggested that the law should be interpreted to forbid forensic accounting investigators from asking employees if they are willing to take a polygraph. Whatever the appropriate interpretation of the act, forensic accounting investigators should leave this tool to law enforcement and other government authorities. Participants. Two people should conduct most interviews. The interview will proceed more smoothly and with fewer gaps if one interviewer asks questions while the other takes notes. Of course, the interviewers can switch roles, but the second interviewer should primarily observe the behavior of the interviewee and consider what questions that behavior suggests. When interviewers work together over a period of time, they learn each other’s pattern of interviewing. The second interviewer might step in to fill a pause in the interview while the primary interviewer gathers next thoughts. The second interviewer also provides a witness for any admission that emerges, as well as for any disputes about the conduct of the interview. In some cases, it quickly becomes clear that the primary interviewer and the subject have a personality clash. Switching interviewers may ease the tension and lead the subject to open up. This has been termed the good cop/bad cop scenario, with the good cop providing a more sympathetic ear and reducing the tension created by the hard-nosed approach of the bad cop. For this approach to work effectively, the two interviewers need to coordinate beforehand their goals and tactics. A forensic accounting investigator must be cautious when working with an unfamiliar partner. What one person perceives as a gap in the interview might be a deliberate silence created by the first interviewer. Or the second interviewer may believe that the primary interviewer missed a question, when in fact he was holding it in reserve. Let your partner know that at a certain point in the interview, you will turn it over to him to cover the possibility that you missed an important question. You will now have a second chance to pose that question through your partner. A good exchange would be to simply turn to your partner and ask, “Do you have any questions?” It is a good practice for interviewers to excuse themselves from the room at certain times or just prior to concluding the interview in order to compare notes privately and thus ensure that all relevant topics have been addressed. Multiple interview subjects. Forensic accounting investigators should never interview more than one person at a time. Even with two employees from the same department, forensic accounting investigators should interview them separately, and at best consecutively, so that one cannot tell the other anything about the interview. Separate interviews provide the best opportunity to draw out a subject and to ensure that one person’s statements are not influencing the other’s. Concurrent interviewing. When more than one person must be interviewed, it is sometimes useful to conduct the interviews simultaneously and use information obtained in each interview in the other. The interviewers need to be in touch with each other, perhaps through a phone call, e-mail, or instant message suggesting a quick meeting in the hall. TYPES OF INTERVIEWS Interview planning must reflect the type of interview that is anticipated. For the purpose of this chapter, all interviews are divided into two categories: information seeking and admission seeking. The Information-Seeking Interview Not everyone interviewed in an investigation is a suspect. Some individuals will be interviewed because they have information about the company, the industry, or the accounting at issue. Such interviews are necessary parts of the investigation, providing knowledge that will sustain further inquiry. In most investigations, the forensic accounting investigator starts interviewing at the periphery of all possible interview candidates and moves toward the witnesses appearing more involved in the allegation that is the subject of the investigation. (One useful technique is to interview people on the periphery and then watch to see if anyone comes along to inquire of them about what questions were asked. Individuals who are particularly curious about the goings-on of the investigation should receive attention.) The more pertinent the information obtained during information-seeking interviews, the more likely it is that the admission-seeking interview will be successful. The information-seeking interview is usually nonconfrontational and not particularly stressful, but the interviewer should never assume that such interviews are unimportant. In some cases, the interview subject may provide the only evidence available. The interviewer must prepare for witness interviews by forming and assessing various theories about what has occurred, yet the interviewer must always be open to new possibilities. Remember, too, that while forensic accounting investigators are trained at asking questions, the various witnesses are most likely not trained in providing answers. Even if they are cooperative, they may not be efficient and may not be aware of what information is important. The forensic accounting investigator’s challenge is to draw data out with the right questions. It is rare for a witness to provide all of the information sought without the help of probing questions. A common tactic of fraudsters is to give honest but incomplete answers, and innocent witnesses may also have difficulty assembling full sets of information for the interviewer. For this reason, forensic accounting investigators must be very good listeners. The interviewer must also beware of making assumptions. (See Chapter 12, where this is identified as a common misstep.) Most intelligent people prefer not to ask dumb questions. Instead, they make assumptions, but this is not a good idea during an investigation. The interviewer should not be afraid to ask many questions, even when the answers may be obvious. And the interviewer should not be afraid of sounding dumb. Ask for whatever information is needed, more than once, of the same person, of different people, and take good notes. The Admission-Seeking Interview This is the most challenging of interviews. It requires substantial skill to complete successfully. In planning the interview, the forensic accounting investigator should be confident that the witness has committed the crime under investigation or has knowledge of the illegal act. The interviewer must consider what may persuade the subject to provide information the subject has no intention of relinquishing. As noted earlier, a successful interview more often depends on the interviewer’s ability to craft a persuasive argument than on the ability to craft precise questions. Some experts define this characteristic as the ability to be a “confident negotiator.”4 Even in cases in which guilt can be established through evidence and testimony from others, an admission is extremely useful because the suspect may admit to acts previously unknown to the forensic accounting investigator and is likely to be more cooperative in any subsequent civil, criminal, or administrative action. An admission may also make a trial unnecessary. To extract an admission of guilt, interviewers may need to make clear that they know the suspect is lying. People react to this accusation in different ways: some become emotional, break down, and confess everything; some respond aggressively; others grow silent. Experienced interviewers know they must first find ways to obtain an initial admission of wrongdoing and then continue questioning to expand that admission into all pertinent areas. To be successful, the interviewer must be well versed in and comfortable with a variety of approaches, including the following: The logical approach. This direct approach begins by laying out the evidence of guilt that has been found and explains the futility of not confessing. “If I committed a crime and there was no evidence,” the forensic accounting investigator might say to the suspect, “I would not make any statement. But here, because we have adequate evidence of your guilt in the accounting records, it is to your advantage to appear to be cooperative, and this statement will demonstrate a willingness to cooperate. Tell us your side of the story. It will be difficult to maintain in the future that you were cooperative in resolving this matter if you are not cooperative now. Maybe someone else who knows what you know will come forward and cooperate with us. Then, what information you may decide to disclose to us at a later time becomes much less important. The value of the information you have about these accounting records has a short half-life. Disclosing now what you know may be your best course of action.” This logical approach may start the suspect talking, which is always a good sign. Major admissions often start with small admissions. Sometimes the witness grows so comfortable talking that the ultimate admission includes admissions of additional improprieties of which forensic accounting investigators were unaware. The do-the-right-thing approach. During preparation for the interview, if the forensic accounting investigator learns that the interview subject had a history of doing the right thing, that information can be used to appeal to the subject’s feelings. As we discussed in Chapter 2, the profile of most white collar criminals fits that of people who, but for a situational experience or misguided rationalizations, by and large have lived normal lives in which doing the right thing has been a way of life. Reminding them of this commonly held belief oftentimes evokes a willingness to revert to that behavior. “I know your family raised you to do the right thing.” “You were a Marine. You know how to accept the responsibility of citizenship. You know what honor means.” “Your dad was in law enforcement, and he taught you to do the right thing.” The silent approach. When two people are engaged in conversation, silence almost always makes one of the individuals uncomfortable. To relieve the uncomfortable feeling, someone usually begins to talk. Silence often makes interviewers uncomfortable to the point that they even suggest answers to the suspect! Do not fall into this trap. Make silence work for you, not against you. Here is an example: Interviewer: I am here to ask you if anyone that you report to has asked you to make journal entries or other accounting entries that made you uncomfortable. Witness: No response. This question could cause the subject to pause and ponder over a response, especially if the subject actually is aware of an event that may be an indicator of fraud. No matter how long it takes to get an answer, wait. After a period of time, perhaps two minutes of silence, you may repeat the question. Whatever you do, do not let the silence prompt you to relieve it by saying something like the following: Interviewer: If that’s not the case, then just say so and we’ll move on. I don’t mean to imply that there’s anything going on here [and on and on . . .]. Silence is a powerful tool. Use it well and use it often. After you ask a question, stop talking and wait for a response. The rationalization approach. The interviewer’s effort in this approach is to give the subject a moral or psychological excuse. Helping the witness place the crime into a rational context—one implying that others similarly situated would do the same thing—can unlock the needed admission. In Chapter 2, we discussed the three ingredients that enable someone to commit a financial crime: need, opportunity, and rationalization. The third ingredient, rationalization, offers the basis for an effective interviewing tactic. Let’s say that the suspect is withholding information. By identifying with the suspect, the forensic accounting investigator may prompt the suspect to talk. Many white collar criminals are truly sorry that their fraud and cover-up have caused trouble internally or harmed investors. Because they believe that they are good people at heart, they rationalize what they have done. The forensic accounting investigator should be sympathetic, and help the suspect recreate and articulate the rationalization. “I’m sure you were angry when Bill got the bonus you should have received,” the interviewer might say. “I know you’re one of the major reasons this business became successful, and you were grossly underpaid. I understand why you felt they owed you money.” A suspect who is feeling guilty may want to get it off his chest by telling someone empathetic why he committed the crime. Helping someone arrive at what might appear to be a rationale for his or her actions allows the subject to save face. “Anyone in your situation would have done this; everybody makes mistakes,” the interviewer might say. The interviewer’s mission here is to give the subject an acceptable reason to come clean. In one example, the interview witness was an individual who had created a series of falsified journal entries having the effect of increasing financial statement income. The forensic accounting investigators believed that at least part of the motivation for the falsification was to meet the requirement for an annual bonus: Were the individual to achieve division sales of $20 million, a bonus equal to his annual salary would be paid to him. One dollar less and there would be no bonus. Various interview techniques had failed. The perpetrator avoided making any admissions until it was proposed by the interviewer that perhaps part of the reason for the falsification was to protect other employees at the company from possible loss of their jobs should the division fail to meet budget. Apparently, the witness turned out to have been hankering for a noble motive to rationalize his illegal and selfish act. He admitted to falsification of the financial statements because he could now justify the act as an effort to protect fellow employees. The rationalization approach is often successful because it allows the subject to save face during the interview. Asking questions to which you know the answers. This approach is best to determine a subject’s credibility. Its effective use early in the investigation could save countless hours in blind alleys. If you can determine the validity of what someone says at the moment the person says it, the investigation can be structured much more efficiently and is likely to yield a much better result. Lying about an important matter is not easily rationalized. If you come across someone who has the ability to rationalize lying to you, then you may have found someone who quite possibly has been lying for quite some time. If you are interviewing someone whom you have just caught in a lie, regardless of the context, as soon as you practically can, focus on the allegations that triggered the investigation. Alternatively, you can review documents and conduct a host of other interviews in search of something to support the initial allegations. However, asking the right questions of the right person at the right time in the investigation could save your client time and money. Remember: Liars lie. Find a liar, and you may be well on your way to finding criminal activity. Forensic accounting investigators must always bear in mind that a method successful with one subject may be ineffective with another. The interviewers must be nimble enough to evaluate whether a strategy is working and to abandon it for another when it is not. They must remain flexible, acknowledge mistakes and false starts, and never lose sight of the objective: to obtain information and, ultimately, an admission. One approach not yet discussed is to bluff. Bluffing almost always fails, and our advice is to never bluff. It is also important to note that interviewers are not permitted to use coercion or duress. Consult counsel for definitions, but here is an example of coercion: “I know you stole the money, and if you don’t admit it, I will tell your employer and you’ll get fired.” And here is an example of duress: “If you don’t confess, you could have an unfortunate accident on your way home tonight.” Both coercion and duress are illegal. OTHERS MAY WISH TO ATTEND INTERVIEWS In the course of forensic accounting investigations, a number of parties are interested in what witnesses have to say. Officers and managers from the victimized entity often want to participate in the interview of a subject. They are angry and impatient to know the truth. However, it is not at all productive to have emotionally charged individuals attend. They may insist on sitting in, on the grounds that they have the facts to prevent the witness from lying; however, victims make poor interviewers. The interviewer should take the necessary time to learn the facts of the case, and on this basis be ready to determine if the witness is lying. The interviewer can deal with lying in a professional and advantageous manner. The less emotionally involved the interviewer, the more likely the interviewer will achieve the objective of the interview. It is preferable to have no more than two interviewers conduct the interview in most situations. Others may wish to simply sit in on the interview as silent onlookers; however, that may distract the witness and create difficulties in establishing rapport and getting the witness to speak openly. There are situations, however, particularly when both counsel and forensic investigators are participating in an investigation, in which there will be more people who may need to attend certain interviews. Forensic accounting investigators nearly always prefer to perform some level of document examination before beginning the interview process. Only after obtaining a reasonable knowledge of the company’s processes and of relevant transactions do they typically begin the interviewing process, usually in a selective and strategic manner. This well-prepared approach is, we believe, critical to achieving desired outcomes. The most important leads and breaks in investigations often come from testimonial rather than circumstantial evidence; that is, facts learned in an interview are often more beneficial to achieving the desired result than documents are, which serve well to corroborate testimony. But to conduct good interviews, you still need good documents. The interview process is clearly all-important to the forensic accounting investigator. Do the interview too early, and you could tip your hand and lose a critical advantage. Do it without adequate factual knowledge to ascertain the honesty of interview answers, and the interview could become just a note-taking exercise that fails to advance the investigation. INTERVIEW PROCESS Your objective is to obtain information. You are a fact finder. Do not hesitate, therefore, to cover the basics with the interviewee: who, what, where, when, and how. In forensic accounting matters, you should always consider asking the interviewee what documents exist to support the information. To obtain additional witnesses, ask the interviewee if anyone else is aware of the information provided in the course of the interview. “Whom else do you think I should talk to?” People are different; one approach will not work with everyone. Be prepared to try different approaches. If you are unsuccessful with one approach, back off and try another. Just do not lose the interviewee’s attention. Keep it focused on you and on the issues at hand. The interviewee needs to know that you are in control. This is your interview. The interviewee can end the interview at any time, but if properly conducted, the interview may well proceed along the desired lines. If an employee offers undue resistance to the interview, his employer may consider mandating cooperation as a condition of continued employment. With these varied interview approaches in mind, let’s walk through an interview step by step. Step 1. Bonding. As a first step, the interviewers try to bond and build rapport with the witness. They advise the interviewee generally of the reason for the interview, the point being to put the subject at ease. In some cases, the interviewee knows why you are there and so may be reluctant or uncooperative. Management should consider, on the advice of counsel, various methods to ensure the employee’s cooperation with the investigation, including the investigator’s saying to the employee, “The company expects your full cooperation with this investigation.” At all times, be courteous toward interviewees. Remember, you are attempting to obtain information. Be friendly, sympathetic, polite, professional, and interested in what the interviewee has to offer. A condescending or bullying attitude will be ineffective. It is very important to establish rapport at the outset, especially in interviews that seek an admission, and for this reason it is usually a mistake to jump right into the questioning. Why not begin questioning at once? Assume that you have been working with this person during the investigation. If you have been doing your job correctly, you have been friendly and cordial to the subject throughout. At the stage of the investigation where you have a reasonable certainty that the witness either has committed a crime or has knowledge that one has been committed, you want the witness’s defenses to be low. You want the individual to continue to be comfortable around you. Keep in mind that most white collar criminals would be very embarrassed if someone knew of their crime. In most of these types of interviews, you will likely come to a point when you let the witness know that you know she is lying. The reactions you expect are shame and disappointment. You also expect that the witness will be eager to win back your approval. That wish could convert into an admission if the witness feels she simply cannot go on lying and hurting people. Does this approach work all the time? Of course not, but keep in mind that you are likely to be interviewing a person who is otherwise good,5 although she has done something—which in hindsight she would recognize as ill-advised—and now regrets her actions. She has a tremendous sense of guilt and wishes relief from it, as if it were a physical pain. If you push the right buttons and say the right things in a sympathetic and understanding manner, you may provide just the right environment to elicit an admission. That is exactly why you want to establish rapport or confirm an existing rapport early in the interview. You will need it later on. Step 2. Baselining. Interviewers learn from experience, and in-depth research in interviewing techniques supports the observation that putting the witness at ease with smalltalk about sports, the weather, where they are from, and so on achieves two aims. The first aim is to lower the subject’s anxiety level and get him talking in a comfortable manner (as discussed in the preceding section). The second aim is to enable the interviewer to get a feel for the subject’s body language, eye movements, facial expressions, and voice inflections under various stress levels. The value of observing body language, a technique used by some interviewers to draw conclusions about a witness’s veracity, is supported by an enormous amount of scientific research. For example, crossing the arms or scratching the nose could be indications of lying; there is sound evidence to this effect.6 Later, when you ask the tough questions, you may notice differences in these behaviors and others, which could be instructive as to the witness’s culpability. On one hand, the consensus among researchers is that one-half to two-thirds of all communications that take place between individuals are nonverbal, involving movements, gestures, facial expressions, and posture.7 On the other hand, experts agree that no one behavior is a reliable indicator of truthfulness, even for a specific individual. One researcher, Paul Ekman, in Telling Lies (New York: Holt, Rinehart and Winston, 1981), pointed out that even when hand and arm gestures are reliable signs that an interview subject is upset, they are not reliable indicators that the subject is being untruthful. The interviewer, however experienced, must proceed very carefully in both observing behavior and interpreting what it may mean. A body of research suggests, for example, that an interview subject with something to hide will adopt a posture that appears to protect the abdomen—leaning forward, perhaps with elbows on knees or crossing an ankle onto the opposing knee. A person with nothing to hide is more likely to sit up, with feet flat on the floor and arms and shoulders relaxed. But if a subject suddenly crosses his arms during an interview, does it mean he feels insecure and is lying? Or does it mean that he feels a draft? If someone starts sweating, does it mean he is lying? Or does it mean that he wishes the air conditioning were on? Experienced interviewers, as noted earlier, begin the interview with easy questions to set the subject at ease and to register the subject’s posture, expressions, and tone of voice. Then they ask a tough question and observe whether the body language changes. But this approach should never be more than a supportive technique—used to probe for more information or an admission. The science of body language is far from precise, and so anything learned by observation has to be viewed as anecdotal rather than as a sure finding. Note, too, that an experienced con man may be confident, manipulative, and in control of his nonverbal indicators. Step 3. Admissions and Defenses. Forensic accounting investigators want to develop a line of questioning that will cause their subjects to admit to knowledge about certain facts, procedures, policy, practices, and any deviations from them, thereby eliminating possible defenses when the time comes to state accusations. If the forensic accounting investigator knows where he wants to end up, he can lay the groundwork through a series of questions that lock the subject into a story that is wiggle free. Time spent in planning will serve well during the interview. A good rule of thumb is that the planning stage will be three times the duration of the expected interview. Before the interview, the interviewers should prepare a list of questions, consider the possible responses to each, and then determine what the follow-up questions would be for each response. Do not hesitate to ask open-ended questions such as the following. These are among the best questions to ask: While you were working at the organization, were you ever asked to do something that made you feel uncomfortable? Did you suspect illegal activities were occurring that you could not prove? Did you ever speak to anyone else regarding this information? Who do you believe would have information that would help us? If you could change something about this organization, what would it be? Is there anything else that we should have explored or that you want to tell us? The interviewers must also consider how the witness might respond to accusations, when the interview reaches that point. Interviewers want to avoid, for example, a situation in which the witness can say, “It’s true that our policies preclude unauthorized journal entries, but anyone could have made those entries without my knowledge.” To anticipate this defense, the interviewers should ask questions that result in a dialogue somewhat like the following: Q: Is it possible that someone could create journal entries to these accounts without your knowledge? A: That would not be possible. Q: Why? A: Because I review an edit listing of all JEs every Friday. I would have seen it. Q: What if you’re on vacation? What happens then? Could someone make an entry that you simply wouldn’t catch? A: No way. If that happened, I wouldn’t be doing my job, and I do my job. I review that edit listing every Friday and if I am away, I always see it on Monday. It’s an important control mechanism, and I make sure it gets done. This line of questioning has now trapped the subject and precluded him from using possible defenses later, when you may become accusatory. The interviewers have eliminated a possible exculpatory response to the allegation that he made unsupported journal entries to inflate revenue. They have established that no one else could have done it without attracting attention in the review process. Step 4. Confrontation. The interviewer lays the groundwork, then brings the accusation. The goal is to make the witness feel the burden of guilt while also perceiving the interviewer as a sympathetic person in whom one can confide. The interviewer wants the subject to feel that further lying is fruitless. “Kathy, I’m very troubled by your last comment,” the interviewer says. “Actually, I’m troubled by several of your comments here today. You have been telling me that you control the deposit of all donations and that you make them all in timely fashion. Yet the minister of the Houston First Presbyterian Church told me that he gave you a $10,000 check on June 15. It never showed up in the foundation’s checking account. The endorsement on the check shows that it was deposited in your personal bank account.” Kathy is likely to lower her head, a shocked expression on her face. She has been found out. Her guilt is huge. That is just where you want her. You have confronted her with the fact that you know she has been lying. This will take a moment for the witness to grasp, and the immediate reaction may be total silence. Allow her to stew about her situation. This is not the time to coach her through what you believe has happened. Be silent. Do not teach the witness that you will provide explanations, when in fact you may not yet know the whole story. Alternatively, the witness could respond aggressively to the accusation and express adamant denial. The interviewer should remain calm and retrace his steps. He should review some of the previous questions and answers. The subject’s aggressive behavior may merely be a test to see what else the interviewer knows and how certain he is that the subject has done something improper. In this situation, the interviewer should stick to his plan. Repetition is his ally. Silence will work well, too. Stay on the offensive and keep the pressure on. Should the denial shift from an emphatic “no” to an explanation, an admission of guilt may be close at hand. When the timing appears appropriate, the interviewer can help the suspect rationalize the crime. “Look, I know you to be a good person at heart,” the interviewer might say. “Not one person here thinks ill of you. Everyone knows of the financial hardship you have endured lately. In similar circumstances, most people would react the way you did. You saw an opportunity to borrow some money, fully intending to pay it back. That’s what you did, isn’t it?” Then let silence weigh on the subject. “I’m ashamed,” Kathy may respond. “It’s true that I only borrowed the money and had every intention of paying it back.” Now the interviewer responds, “I believe you. You’re an honest person, and I know what a burden this has been for you. I guarantee you, though, that if you work with me on this, you will feel better.” The interviewers have achieved their goal of getting the suspect to talk. Step 5. The Admission. Now the interviewers should walk the subject through the facts and specific instances of the crimes. They should bring out documents and ask questions that will solidify her involvement, knowledge, and intent. They should nail down the details, although always remaining sympathetic and compassionate. They should comfort and encourage the subject. And all the while, they should take good notes and close the remaining gaps in knowledge. When the interview is coming to a close, the interviewers should stay in character. They should not burn any bridges through inflammatory comments. They may need additional information in the future and so should advise the interviewee that they may be in touch later with more questions. The subject may recall additional facts that might help the investigation, or circumstances may change to make the interviewee more cooperative. The interviewers should ensure that the subject knows how to contact them. During the conduct of an investigation, it is important to segregate and control all evidence until it can be examined forensically. This is a standard procedure when considering physical documents and electronic evidence, but it certainly applies to what people know, by their own experiences and actions, at the time of the start of an investigation. As such, it is important to do two things during an interview. At the end of each interview, tell the subject not to discuss with anyone the topics covered in the interview. Also, a question that should be asked of every subject is, “Have you discussed this matter or any previous interview you have had during the course of this investigation, or has anyone approached you regarding such?” People can still talk behind the scenes, but you will stop most such discussions by incorporating these two steps into your investigation. DOCUMENTING THE INTERVIEW In most cases, the interview should be documented contemporaneously. Between the two participating interviewers, there may be some differences of perspective. This is not uncommon. They should review their notes, and if there are material differences they should attempt to clarify with the witness when possible. They should then create a single master version of the interview and follow their document retention policy as well as any applicable laws and regulations. If direct quotations from the interviewee are included, they should be identified as such. Documenting the interviewee’s own language, particularly key portions of the admission, may be helpful to those evaluating the import of the facts disclosed in the interview. USE OF SUBTERFUGE Subterfuge is the use of pretext or deception about who you are so that you may obtain information that may not otherwise be forthcoming. An example of subterfuge is a forensic investigator’s claiming to be a bank employee. The use of subterfuge has many legal implications and should not be undertaken unless you have clear direction from counsel and confirmation about its consistency with the client’s internal policies and its legality in the particular circumstances. For our part, we do not engage in this practice because we believe the detriments far outweigh any potential benefits except possibly in situations when the forensic investigator is being hired by a government body and the practice has been specifically sanctioned by the client. More specifically, in considering whether to use subterfuge in an investigation, one should recognize that the practice may very well backfire. What happens when the forensic investigator takes the stand and is asked, “Did you lie at any time during the course of your investigation?” What would the jury’s reaction be to a yes answer? And what impact would the answer have on the overall credibility of the forensic witness? An otherwise well-executed investigation could be for naught because of the forensic investigator’s use of subterfuge. SUMMARY Some of these interviewing techniques are broadly useful in the regular conduct of financial statement audits—for example, preparing well, questioning and listening intently, using silence to make sure you get an adequate response, and being persistent if you do not. The full scope of these techniques, however, should be considered by forensic accounting investigators who are thoroughly familiar with the full range of interviewing techniques and are capable of using them effectively. 1. David E. Zulawski and Douglas E. Wicklander, Practical Aspects of Interview and Interrogation, 2nd ed. (New York: CRC Press, 2002), 12–13. 2. As discussed in Chapter 19, the prosecutor will determine if a matter is worthy of prosecuting. Such actions are not made for the benefit of an individual or corporation. 3. Admissibility of Confession as Affected by Its Inducement through Artifice, Deception, Trickery or Fraud, American Law Reports 2d, 772 (Rochester, NY: The Lawyers Cooperative Publishing Company, 1965), 69–70. 4. Id., 38. 5. See Chapter 2 for a discussion on the profile of white collar criminals. 6. The medical explanation for why someone who is lying may scratch his nose is as follows: under stress (as when someone is lying), the body’s defense mechanism causes the blood to retreat toward the organs and away from the capillaries, which are near the surface of the skin. The retreat causes a tingling sensation. 7. An extensive discussion of the wide range of verbal and nonverbal behavior can be found in American Legal Review (see ALR 2d 38, 106ff.).
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