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
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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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
The Fraud Report

Includes:




Findings
Conclusions
Recommendations
Corrective actions taken
Should be:




Objective
Factual
Unbiased
Free from distortion
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