Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Fraud Examination, 4E Chapter 10: Inquiry Methods and Fraud Reports

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Learning Objectives  Understand the interviewing process.  Plan and conduct an interview.  Understand the nature of admission-seeking interviews.  Describe the different deceptions and lies used by perpetrators.  Describe the different types of honesty testing.  Prepare a fraud report.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Interviewing Process  An interview is :  the most common technique used to investigate and resolve fraud  a question-and-answer session designed to elicit information  a structured (not free-form) conversation that has a purpose  the systematic questioning of individuals who have knowledge of events, people, and evidence of a case

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Interviewing Process  Interviews also help obtain:  information that establishes the essential elements of the crime  leads for developing cases and gathering other evidence  the cooperation of victims and witnesses  information on the personal backgrounds and motives of witnesses

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Interviewing Process  Three types of interviewees:  Friendly Interviewees  Go beyond normal expectation to help out  Neutral Interviewees  Have nothing to gain or lose from the interview  Have no hidden motives or agendas  Hostile Interviewees  Are often associated in some way with the suspect or the crime  Should be questioned without prior notice

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Interviewing Process  Characteristics of a Good Interview  Sufficient length and depth  Focus on pertinent information  Should end on a positive note  Should be conducted soon after the event  Should be objective  Endeavor to gather information in a fair and impartial manner

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Interviewing Process  Characteristics of a Good Interviewer  Outgoing personalities  Interact well with others  Help others feel at ease  Do not interrupt respondents unnecessarily  Display interest in the subject and in what is being said  Phrase questions in a non-accusatory manner

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Interviewing Process  Characteristics of a Good Interviewer  Demonstrate a lack of bias  Be on time  Attired professionally  Deal fairly with respondents

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Understanding Reaction to Crisis  Sequence of Reaction Stage 1. Denial  Acts as a “shock absorber”  In the denial stage, people…  appear temporarily stunned or dazed  refuse to accept the information given  insist that there is some mistake, or  fail to comprehend what has been said.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Understanding Reaction to Crisis  Stage 2. Anger  A dangerous time to resolve frauds  Suspects direct their anger at friends, relatives, coworkers and/or self  Others can insult, harm, slander, or libel suspects and may terminate them without due cause

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Understanding Reaction to Crisis  Stage 3. Bargaining & Rationalization  People attempt to justify the dishonest act and/or to minimize the crime  Leads to failure to prosecute, easy penalties, and weak testimonies  Interviews can be detrimental to attempts to uncover the truth

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Understanding Reaction to Crisis  Stage 4. Depression  Many withdraw or lose interest  People no longer deny or rationalize the dishonest act  Anger is replaced by a sense of loss and disappointment  People often become withdrawn and uncooperative

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Understanding Reaction to Crisis  Stage 5. Acceptance  Acknowledgement of what happened  A desire to resolve the issue and move on  Interviews are most useful and witnesses most cooperative

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Understanding Reaction to Crisis  Individuals go through the five stages differently  Individuals can cycle through the emotions of denial, anger, rationalization, and depression a number of times

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Planning an Interview  Follow a plan or outline to meet your objectives  Review relevant documents to gather as much information as possible  Conduct interviews at the interviewee’s office (except for hostile interviewees)  Set up an appointment  Plan sufficient (even excess) time for the interview

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Conducting an Interview  Interviewer’s Demeanor  Be efficient, courteous, polite, and careful with language used during interviews  Do not talk down to the person  Language of Interviews  Use short questions, confined to one topic, which can be clearly and easily understood.  Maintain full control of the interview

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Conducting an Interview  Question Typology  Interviewers ask five types of questions:  Introductory  Informational  Assessment  Closing  Admission-seeking

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Conducting an Interview  Elements of Conversation  Basic Elements of effective conversation:  Expression  Persuasion  Therapy  Ritual  Information Exchange

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Conducting an Interview  Inhibitors of Communication  Competing Demands for Time  Threatened Egos  Etiquette  Trauma  Forgetting  Chronological Confusion  Inferential Confusion  Unconscious Behavior

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Conducting an Interview  Facilitators of Communication  Fulfilling Expectations  Recognition  Altruistic Appeals  Sympathetic Understanding  New Experience  Catharis  Need for Meaning  Extrinsic Rewards

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Mechanics of the Interview  Methodology  Make Physical Contact  Establish the Purpose of the Interview  Don’t Interview More than One Person at a Time  Conduct the Interview in Private  Ask Nonsensitive Questions  Get a Commitment for Assistance  Establish a Transitional Statement\  Seek Continuous Agreement  Do Not Invade Body Space

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Mechanics of the Interview  Question Sequence  Questioning should proceed from the general to the specific; that is, seek general information before details are sought  Note Taking  Procedure is especially helpful should documents from a particular interview be subpoenaed.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Mechanics of the Interview  Observing Respondent Reactions  Must be knowledgeable about respondents’ behavior during interviews.  Theme Development  Be sure to formulate your questions in a way that does not elicit strong emotional reactions.  Transition Methodology  Once the introduction has been completed, transition to the body of the interview.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Mechanics of the Interview  Volatile Interviews  Typically involve close friends and relatives of suspects, co-conspirators, and similar individuals.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Physiology of Deception  Detecting Deception  There are no quick and easy techniques for detecting deception; instead, careful practice and learning to look for patterns and comparison lead to expertise in this skill.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Physiology of Deception  Verbal and Nonverbal Cues  Extensive academic research suggests that verbal cues are more reliable predictors of deception than nonverbal cues.  Cues to deception suggests that liars’ attempts to appear honest will lead them to exhibit behaviors in five areas:  Increased tension, less positive and pleasant interactions, less forthcoming responses, less compelling tales, and fewer ordinary imperfections

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Honesty Testing  The most common inquiry method is the interview.  Three other methods exist:  Pencil-and-Paper Test  Graphology  Voice stress analysis and polygraphs.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Fraud Report  Includes:  Findings  Conclusions  Recommendations  Corrective actions taken  Should be:  Objective  Factual  Unbiased  Free from distortion