+44 (0)845 388 5467 info@intersolglobal.com www.intersolglobal.com WHITE PAPER THE ROLE OF INVESTIGATIVE INTERVIEWING IN AUDIT, COMPLIANCE, CONTROL FUNCTIONS, AND RISK MANAGEMENT Intersol Global (IG) are innovative world leaders at Extraordinary Case Management (ECM™), placing first class forensic investigative interviewing at the heart of any fact-­‐finding process. "Manipulation (of interest rates) is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved" (Mark Carney, Governor of The Bank of England) “It (interest rate manipulation) was “truly shocking conduct, undertaken when the bank was on a lifeline of public support” (Lord Blackwell, Lloyds Chairman) “It goes without saying that as internal auditors you play a vital role in shaping the behaviour of boards and those others responsible for the governance of organisations and the management of risk. This gives you a huge responsibility to find ways to respond to some of the greatest risks that face organisations, economies, and society as a whole”………….So is it not the case that our approach to risk, reporting and decision-­‐making needs to be transformed? If so, internal auditors have a key role to play”. (HRH The Prince of Wales (CIIA Conference July 2012) “The purview of internal audit has changed completely. It used to be a hindsight profession – find out the mistakes and make them better. Now it’s at the cutting edge of strategic thinking. What excites me for the profession is that you are moving into the area of foresight” (Professor Mervyn King) “We now do far more regulatory work. About 70 – 80% of what we do is regulatory…..The role of internal audit is developing, and soft skills are becoming an increasingly vital part of the functions tool kit….we need to keep improving and ensure we are suitably ambitious. We need to keep pace and anticipate developments in the wider organisation. We need to keep pushing. The softer skills – how you communicate and how you engage with people – are what ensures that the impact of the function is ultimately positive and constructive. What skills do we need to get the job done? We keep a skills register and each individual in the team has their own learning objectives”. (Julian Wynter (Group Head IA Standard Chartered Bank) commenting on IIA Accreditation). 2 If any element of your business concerns an investigative process or conducting meetings (interviews) with the objective of obtaining checkable facts and identifying risk Intersol Global can add significant value whilst enhancing reputation and maintaining stakeholder engagement Interviews (workplace meetings) with the purpose of discovering facts are a crucial method used to expose risks to the business and obtain evidence of control breakdown (or potential breakdown). These meetings (investigative interviews) need to be conducted objectively, competently and to the highest possible standards. Investigative Interview meetings are typically conducted by regulators, auditors, compliance, human resource, and risk managers. To interview effectively the interviewer needs to develop an inquisitive, yet open-­‐minded and non-­‐judgmental, mindset, an ability to manage conversations effectively, ‘challenge’ discrepancies appropriately, and continue to maintain and develop those skills, which should be valued and appreciated throughout the institution. ‘Top-­‐down’ ‘C-­‐suite’ support has proved crucial to embedding these qualities systemically and driving cultural change. Interviews that are professionally conducted and quality assured can secure clear strategic business benefit and outcomes for the organisation. Those business benefits include (but are not limited to): » Direct and inform the audit / investigation; » Provide internal reassurance and confidence; » Preserve staff loyalty improving performance; » Identify opportunity for cost savings; » Increase profitability; » Increase public confidence; » Improve and preserve public reputation; » Energise, motivate and empower risk management and control function employees; » Reduce the number of meetings and time taken to conduct each one; » Minimise the need to re-­‐interview; » Enhance reputation and reduce risk; » Align with global best practice; » Demonstrate competence and provide assurance to regulators and other stakeholders. Conversely, failures to quality assure and professionally undertake those interviews can attract adverse consequences for the organisation; they may cause: » Loss of critical information; » Increased expenditure on unnecessary meetings and interviews; » Poor value and return on investment; » Reinforcement of poor practice; » Inefficient deployment of investigation teams; 3 » Lack of internal and external credibility; » Loss of internal and external confidence; » Reputational damage; » Increased risk; » Failure to adhere to regulation; » Regulatory sanction. … and could lead to …CRIMINAL CONDUCT The gathering of information and checkable facts from a competently planned, prepared, and conducted interview will thus contribute significantly to the investigation outcome and business efficacy. Information and facts so obtained can then be checked externally against others that have, or that might yet be, obtained. The principles of Investigative Interviewing can be aligned readily to those that have stood the test of time and ultimate evidential test in the British Courts – proof beyond reasonable doubt, and if internal investigative interview meetings aspire to that level of effectiveness they will add considerable more value and reputational enhancement to the business. The principles of Investigative Interview Workplace Meetings.1 i. The aim of the meeting is to obtain accurate and reliable accounts from stakeholders. ii. Interviewers must act fairly when meeting stakeholders, and vulnerable staff must be treated with particular consideration at all times. iii. Workplace investigative interviewing should be approached with an inquisitive mindset. Accounts obtained from the stakeholder who is being interviewed should always be tested against what the auditor already knows or what can reasonably be established. iv. When conducting a workplace interview, interviewers are free to ask a wide range of questions in order to obtain material that may assist the investigation process (audit?). v. The Interviewer is not bound to accept the first answer given. Questioning is not unfair merely because it’s persistent. vi. Workplace interviews in the context of audit provide a credible challenge to the business in order to protect assets, reputation, and sustainability of the organization. vii. Interviewers should engage effectively with stakeholders to ensure that the findings, actions, and outcomes of the investigation benefit the business. The P.E.A.C.E. Framework for Investigative Interviews The PEACE interview framework is scientifically underpinned and was developed and introduced into the British legal system in 1992 to redress the balance of miscarriages of justice caused by poor investigation and interviewing. It has stood the test of time and the highest level of evidential scrutiny. It remains the standard for many Law Enforcement Agencies worldwide and is adopted throughout the UK regulatory industry as the preferred investigative interview framework. 1
(Acknowledge Association of Police Officers, ACPO, NIIS 2009) 4 At its core are open-­‐mindedness, a non-­‐judgmental attitude, avoidance of investigation bias, and a search for the truth and checkable facts. It IS NOT to be confused with confession focused models or ‘interrogation’, which have no place in internal (workplace) investigative interviews notwithstanding that may be the outcome. Planning and
Preparation
Engage and
Explain
Account,
Clarification, and
Challenge
Closure
Evaluation
• Vital to efficient and successful interview meetings and business outcomes
• How to open the interview, engage with the stakeholder, and establish
rapport and ground rules
• This addresses the most important achievable objectives of the interview,
clarifying it by probing, and, if necessary, challenging the stakeholder
appropriately
• What are the considerations before ending the interview and explaining
'next steps' to the interviewee
• What has the interview achieved? How it fits with the investigation
purpose? What happens next? and, Reflection on performance and
development needs
Within the PEACE framework sit several models used by interviewers. The more skilled interviewer, competent in several, will display the flexibility to switch between those models subject to demand by the stakeholder (interviewee). They are interchangeable and essentially consist of Conversation Management (CM), Cognitive Interviewing (CI), and Enhanced Cognitive Interviewing (ECI). All of the interview models listed above were designed to overcome the limitations of human memory, which is not, as popularly believed, like a ‘video recording’. The effective interviewer needs an understanding of the impact on a stakeholders memory of event(s) and the impact of repeated conversations about the same issues. A further requirement of the effective interviewer is an appreciation of the effect of ‘inner editor’, and its impact on the note-­‐taking processes employed. We all edit information, noting what WE think is relevant or important, perhaps based on previous knowledge or research influenced by external factors, which, combined with interviewer bias can be lethal to the credibility and value of the output. When we ‘note-­‐
take’, listening skills falter so the training teaches people an empirically proven methodology for note-­‐taking and writing up the content of the conversations UK Law Enforcement (including regulators) is statutorily obliged to audio record (and visually on occasion) many interviews, often having to justify why they have failed to do so. Since this is not yet the case in corporate investigative interviews, it is imperative that note taking and writing up are reliable, accurate and efficient. A consistent approach to an internal investigation should recognise that the possible eventual outcome, whilst hopefully positive and encouraging, might occasionally be criminal conduct. In such cases, a criminal investigation will only ever be as effective and rigorous as the foundations upon which it is built. 5 It should be recognized that not all internal investigation interviewers would be effective communicators with all stakeholders and at all strategic levels of the business. Case study: Investigative Interviewing Skills for Internal Auditors Three imperatives for training prompted a global bank to provide Investigative Interview skills training for their worldwide internal audit team. The bank was required to demonstrate to regulators that they were strengthening the internal audit function and that the function served as an effective control. A new global centralised structure and methodology for internal audit meant they needed to implement globally consistent standards of professional practice. The function had created a new competency framework defined specifically for the global internal audit function, which meant that they needed to implement training that would support internal auditors to develop and enhance those competencies. For the first time, therefore they were seeking non-­‐technical training designed specifically for internal auditors. This was recognised as a particular need to help them shape the perception of the global function as a value-­‐adding partner to the business. Intersol Global customised a 2-­‐day ‘Effective Audit Conversations’ course that is rolling out to over 200 delegates worldwide. Intersol Global were chosen because of there: » Ability to demonstrate customisation and applicability specifically to internal auditors » Award winning practitioners delivering the training » Leading experts from audit, law enforcement and psychology collaborating to design the course » Global reach » High proportion of practical learning methods and applicability of the 'tools' from the course. » Demonstrable alignment of the course with the IIA competency framework and the IIA International Professional Practices Framework. Feedback from the training is consistently excellent. This client has » Reported to the regulator on the courses and the feedback as part of demonstrating how they were strengthening the function. » Provided a standard interviewing approach and techniques to be used by the teams globally. Work with the organisation to measure the benefits in terms of the audit function reputation as well as time/cost savings resulting from conducting more efficient and effective interviews is an on-­‐going process. Example Curriculum for Internal Audit “Internal auditors deal with issues that are fundamentally important to the survival and prosperity of any organisation. Unlike external auditors, they look beyond financial risks and statements to consider wider issues such as the organisation's reputation, growth, and its impact on the environment and the way it treats its employees. In sum, internal auditors help organisations to succeed. We do this through a combination of assurance and consulting. The assurance part of our work involves telling managers and governors how well the systems and processes designed to keep the organisation on track are working. Then, we offer consulting help to improve those systems and processes where necessary”. (The Chartered Institute of Internal Auditors (IIA)) 6 Gathering Information & Landing Audit Issues (Example Course) Overview Internal Audit faces unprecedented expectations and challenges in its critical role as part of an organizations toolkit to identify and manage risk effectively. In particular, auditors are under pressure to identify deficiencies and then work with management in a business-­‐focused way. Internal Audit increasingly needs to step up and be part of the solution, working in partnership with management to enable them to identify and rectify problems in a way that meets stakeholders’ needs appropriately and cements the role of Internal Audit as a valued business partner. Using practical, realistic exercises and case-­‐studies this intensive 2 day course, delivered by subject matter specialists, will develop the critical interpersonal skills needed by auditors to manage conversations when gathering information and then present issues back in a way that adds value to the business, minimizing financial and reputational damage and reducing risk. Participants will use proven models and techniques interspersed with numerous opportunities to practice and develop skills, observe others and receive individual feedback in order to build their own skills toolkit. Learning Outcomes Upon completion of this module delegates will: » Be better able to develop impactful business-­‐focused relationships with auditees » Understand, and be able to apply the P.E.A.C.E. interview framework and other tried and tested interview models in the workplace » Understand and use proven, evidence based questioning techniques whilst maintaining stakeholder engagement » Be able to better identify personality types and adapt their approach to be more effective in audit meetings » Better prepare for “difficult” conversations and manage them more effectively, presenting issues in a way that engages management constructively, minimizing the potential for conflict » Develop proven meeting note-­‐taking methodology ensuring accuracy and increased detail and product » Be able to assert themselves with confidence and develop reflective practice to improve their impact Content Day 1 1. Introductions & Course Overview Ø The Trust Equation Ø Principles of an investigation, enquiring mindsets, and the impact on business of auditors confirmation bias Ø P.E.A.C.E. model overview 2. Planning & Preparation 7 Ø Structuring your planning and preparing for meetings effectively, addressing both content and interpersonal considerations Ø Identifying personality types and adapting appropriately 3. Effectively Engaging Ø Effectively engaging with auditees and explaining the audit process Ø Using linguistic tools to influence and pitch the conversation at the right level 4.
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Account, Challenge & Confirm Appropriate and productive questioning techniques Effective listening Probing for the root cause Day 2 5. Recap & Review Ø Re-­‐visit and re-­‐orientate Day 1 6. Account, Challenge & Confirm (cont.) Ø Taking effective notes during the meeting Ø ‘Challenging’ auditees appropriately within the interview 7.
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Landing the Audit Issue Avoiding conflict and managing difficult interviews Preparing for and structuring the audit findings meeting Delivering the audit finding 8. Closing the Meeting Ø Closing the meeting and agreeing actions Ø Management action and rectification of gaps 9. Evaluation Ø Reflecting on the meeting and reviewing outcomes Ø Giving & receiving feedback 10. Course Conclusion Course De-­‐brief, closure and Certificates of Attendance Aligned to the Institute of Internal Auditors (IIA) Global Professional Practice Framework the example curriculum extends to a three-­‐level pathway with courses designed to support each stage of the audit engagement process, complemented by a fourth level intended to upskill and equip senior managers and specialists whilst reinforcing the ‘top-­‐down’ endorsement so critical to success. Contrary to the philosophy of most other training providers who present a one-­‐size fits all solution, Intersol Global firmly believe that learning and development has to be undertaken in context and for this reason will always work with their clients to contextualise material with particular emphasis on relevant case study scenarios to fuel the parctical exercises. In all interview training, delegates will conduct an evaluated interview meeting which is both audio and visually recorded to best facilitate learning and feedback from both the trainer and peers. The extended curriculum pathway builds upon a foundation course with additional competencies at each stage aligned as explained above. 8 The comprehensive IIA professional framework can be viewed at: https://www.iia.org.uk/media/1356272/201507ippfbooklet2.pdf Suggested Auditor Development Pathway Foundalon Specialist Manager/
Advisor Intermediate Foundalon Intermediate Specialist Manager/
Advisor In broad terms, the Foundation level would be appropriate for auditors (compliance, regulators etc.) in the formative stages of training or early stages of deployment, intermediate for those with a working knowledge and post qualification professional experience, and specialist for those more experienced professionals likely to be charged with the most complex and challenging interviews or meetings. Progression through the stages should be progressive and dependant on proof of competence at the former. The manager/advisor role should be reserved for those practitioners of the highest skill and competence, able to manage the process of large scale complex ‘operations’, strategically advise and support others whilst maintaining competence to ‘interview’ at all levels. Intersol Global have secured a transferrable level 3 vocational qualification that underpins the founding knowledge of investigation and investigative interviewing, utilising the combined teaching methods of a Virtual Learning Platform (VLP), face to face learning, and practical exercises to reinforce that learning. In conjunction with a major global client, IG developed a delivery framework that extended beyond audit to incorporate such training as Fraud, Cybercrime, Credit card risk and security, note-­‐taking techniques (whilst there remains a reluctance to record), deception detection, forensic linguistics, and investigation management. A suggested development ‘suite’ is illustrated below and is entirely adaptable to a variety of functions 9 Example ‘Linked’ Suite of Courses With their exceptional world class award winning skills, and globally located consultants, Intersol Global have designed a comprehensive and innovative curriculum of modular based training courses and workshops enabling individuals and institutions to engage in robust evidence based practice by placing ethical investigation and forensic investigative interviewing firmly at the heart of Extraordinary Case Management (ECM™), case management that is recognised as exceptional, outstanding and surpassing expectations. If your organisation or role enters into any sort of fact-­‐finding, has an investigative remit, seeks to mitigate risk whether in a Regulatory Context, Banking, Insurance, Audit, Control or Compliance function, Human Resource, Law Enforcement, or Internal Investigation, Intersol Global can add real value and make savings whilst maintaining stakeholder engagement, enhancing reputation and mitigating risk whilst withstanding the closest scrutiny. We achieve this by placing your company values alongside ours at the core of a 5-­‐stage decision-­‐making model that: 1.
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Listens to your requirements Assesses risk and develops a strategy Considers regulations and policies Discusses and determines options Takes joint action Constantly reviewing that decision-­‐making and rationalising it at every stage. At Intersol Global your reputation and integrity (and ours) are paramount. We work with only the very best in their discipline. Without exception every partner, associate, and consultant has a track record of the highest standard of professionalism and excellent service delivery. We believe that only the highest standard of excellence and seamless investigative practice is acceptable. We are expert at transferring the 10 combined centuries of experience, knowledge, and award winning skills for investigative practice into the commercial world, supported by ECM ™ Intersol Global enables individuals and institutions to engage in exceptional, effective, and empirically grounded investigation, placing ethically robust investigative interviewing firmly at the heart of: Extraordinary Case Management (ECM™) Previous and current clients include Global Banks, Moody’s Analytics, UK and International police and security forces; BIS, FSA, SFO, Government Departments, Regulators, IPCC, MOD, United Nations, 3rd sector and voluntary organisations, and international seats of learning. For additional information about us and our team, or for more detailed course outlines or an informal no obligation consultation please contact info@intersolglobal.com or visit www.intersolglobal.com