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Fraud Examination CH 10
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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, 4EChapter 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 CrisisSequence 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 CrisisStage 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 CrisisStage 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 CrisisStage 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 CrisisIndividuals 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 ConversationBasic 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 CuesExtensive 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
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