Welcome to Unit 6

The Interview

Unit 4•Interviews and Inquiry Methods•Chapters 10-11•Discussion Board – 1 topic•Quiz•Seminar•Honesty tests: pencil-and-paper, graphology, voice stress analysis, and polygraphs. We are learning about fraud interviews, financial statement frauds, and how statement analysis is used to detect deception.

UNIT 4 SEMINAR

Chapter 9Short Cases 3-7

All found on pages 264-266 of Chapter 9.

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The Interviewing Process An INTERVIEW us the most common technique used to investigate and resolve fraud. Types include:•A question-and-answer session designed to elicit information•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

The Interviewing Process The three types of interviewees: (1)Friendly Interviewees

– Go beyond normal expectation to help out

(2)Neutral Interviewees– Have nothing to gain or lose from the interview– Have no hidden motives or agendas

(3)Hostile Interviewees– Are often associated in some way with the

suspect or the crime– Should be questioned without prior notice

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• Are objective• Endeavor to gather information in a fair and

impartial manner

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• Knowledgeable• Demonstrate a lack of bias• On time• Professionally attired• Fair in all dealings with respondents

Understanding ReactionsSequence of Reaction*

1.Denial2.Anger3.Rationalization or bargaining4.Depression5.Acceptance

*NOTE - Individuals go through the five stages differently can cycle through the emotions of denial, anger, rationalization, and depression a number of times

Understanding ReactionsDenial Stage

Functions as a buffer after people receive unexpected or shocking news

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.

Understanding Reactions

Anger Stage• 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

Understanding Reactions

Rationalization or Bargaining Stage• 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

Understanding Reactions

Depression Stage• 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

Understanding Reactions

Acceptance Stage• Acknowledgement of what happened • A desire to resolve the issue and move on• Interviews are most useful and witnesses

most cooperative

Physiology of DeceptionVerbal Cues

– Changes in Speech Patterns – Repetition of the Question – Comments Regarding Interview – Selective Memory – Making Excuses – Oaths – Character Testimony – Fewer Emotionally Charged

Words – Specific Denials – Overuse of Respect

Physiology of DeceptionNon-Verbal Cues

– Full Body Motions– Anatomical Physical Responses– Illustrators – Hands over the Mouth – Manipulators – Fleeing Positions – Crossing the Arms – Reaction to Evidence – Lip Movements

Case 3 – p. 311Daffy Duck, the purchasing manager for ACME Corporation, is under suspicion for committing fraud. His superiors believe he is accepting kickbacks and bribes from various vendors. As the company’s fraud expert, you are investigating this possible fraud and are preparing to interview Daffy. You suspect that Daffy will be defensive and possibly hostile when interviewed.

1. What investigation procedures should be completed before your admission-seeking interview with Daffy?

2. If you find evidence that proves Daffy is committing fraud at ACME, what might his initial reaction be when he is confronted? What other emotions and/or reactions might you expect from Daffy? How do you know this?

Case 9 – p. 313As a result of the system audit performed by one of the Big 4 accounting firms at Deming Medical corporate offices, it was discovered that Paula, one of the payroll supervisors, had system access rights to transaction codes used by the HR staff. Consequently, it was determined that Paula took advantage of the situation and created a fake employee to whom she was issuing a paycheck every two weeks; only the checks went to Paula’s banking account. Andrew Jacobsen, an investigator working on the case, did extensive research, details of which led him to believe that Paula was embezzling. Andrew is about to go in for a final interview with Paula. Paula had been interviewed before and denied she was involved in the embezzling scheme. What interviewing tactics should Andrew use to get Paula to admit she was stealing from Deming? How would he know whether she tells him the truth?