Interview Techniques for Forensic Accountants

Forensic accountants conducting an interview should consider the appropriate legal and logistic issues in an investigation to ensure court rules are met. This approach will accept evidence as admissible in court and prevent the investigation from being compromised when combined with the use of one of three interview techniques:

• REID
• PEACE
•  Motivational Interviewing technique (MI)

(Akkeren, 2015)

The REID technique is built around basic psychological principles containing three different phases – fact finding, behavioural analysis and interrogation. This model allows the interviewer to focus on the guilty person and then use a nine-step process to interrogate that person to uncover the truth (International Competition Network, 2008).

PEACE stands for

• Planning and preparation
•  Engage and explain
• Account
• Closure
• Evaluation 

It is aimed at offering a more effective and ethical alternative to persuasive interviewing using a “conversation” approach (Lomer, 2015).

Motivational Interviewing (MI) uses the power of empathy to understand the situation of suspects. It centres around four principles – express empathy, develop discrepancy, roll with resistance and support self-efficiency (Akkeren, 2015). Although harder to conduct, when performed effectively, can result in a confession that would have not been successful using another technique.

An example of MI was provided to me in class on the Colonel Russell Williams case. After watching the interview, I could clearly identify the empathy expressed by the interviewer and the effective use of providing evidence and proper questioning – all which eventually led to William’s confession.

 

Russell Williams Confession - Part 1

Russell Williams Confession - Part 2

Russell Williams Confession - Part 3

This case showed me how effective these interviewing techniques could be since it was used in a real life investigation. To me, the three interviewing techniques are effective approaches and each one should be used suitable to the situation.

References:

Akkeren, J. V. AYB115 Governance, Fraud and Investigation: Interviewing Techniques for Forensic Investigation [Lecture Notes]. Retrieved from https://blackboard.qut.edu.au/webapps/blackboard/content/listContent.jsp?course_id=_116816_1&content_id=_5376704_1&mode=reset

International Competitive Network. (2008). Anti-Cartel Enforcement Manual. Retrieved from International Competitive Network website

http://www.internationalcompetitionnetwork.org/uploads/library/doc345.pdf

Lomer, D. (2015). Investigative interviewing techniques: the PEACE model. Retrieved from http://i-sight.com/resources/investigative-interviewing-techniques-the-peace-model/

Cressey's Fraud Triangle

Cressey’s Fraud Triangle states that three elements must be present at the same time for an ordinary individual to commit occupational fraud. These elements are: 

1. Pressure
2. Rationalisation
3. Opportunity

(Albrecht, 2014).

The model addresses both the Differential Association Theory and the General Stain Theory, which respectively explains why fraud occurs by groups within an organisation and why individuals turn to fraud, bribery and corruption (Akkeren, 2015). From my experience of studying fraud, criminal behaviour is learned, not inherited, and can occur individually through the interaction with other people or arise in intimate personal groups.

Perspectives on Deviance: Explanation on Differential Association and Strain Theory

A few years ago, one of the chefs in my parent’s family restaurant started having problems with his spouse and began to arrive to work in a short-tempered mood. One day, he demanded an increase in wages and if declined, all chefs would quit on the day. With no other options, my parents were ‘bullied’ into paying these wages until they were able to hire new chefs. Using Cressey’s model, I can see that it began on the chef’s internal pressures at home, which he used to rationalise his reasons for deserving higher pay and then unfortunately the opportunity existed when the other chefs agreed to go with the plan.

The increase in fraud can be due to the rise of internal and external pressures of individuals where they turn to occupational fraud as a solution to financial problems (Akkeren, 2015). It is recommended for organisations to apply internal controls as well as notice the “red flags” of a fraudster by detecting unusual behaviour of employees, including those in senior level management, and if they are under any financial distress (Bierstaker, 2009, p. 247).

References:

Akkeren, J. V. AYB115 Governance, Fraud and Investigation: Identifying and Profiling Fraudsters [Lecture Notes]. Retrieved from https://blackboard.qut.edu.au/webapps/blackboard/content/listContent.jsp?course_id=_116816_1&content_id=_5376704_1&mode=reset

Albrecht, W. S. (2014). Iconic Fraud Triangle endures: Metaphor diagram helps everybody understand fraud. Fraud Magazine. Retrieved from http://www.fraud-magazine.com/article.aspx?id=4294983342

Bierstaker, J. L. (2009). Differences in attitudes about fraud and corruption across cultures: theory, examples and recommendations. Cross Cultural Management, 16, 241 – 250. doi: 10.1108/13527600910977337

The Expert's Report

The form of the Expert’s Report sets out clear and specific guidelines to ‘any witness preparing a report in a proceeding’, with the purpose of providing an opinion about accounting evidence (Federal Court of Australia, 2013). 

It is of importance that these guidelines are set out so that the report differentiates between the facts and opinions, with all the assumptions stated clearly, in order to meet the minimum standards of professional competence in Court (Expert opinion, 2006). To support this, paragraphs 2.1 (e) and (f) in the Expert’s Report states that to be compliant, witnesses must ‘set out separately from the factual findings or assumptions each of the expert’s opinions/opinions is based’ (Federal Court of Australia, 2013). Furthermore, APES215 also highlights the significance of clearly distinguishing the facts, opinions and assumptions based on the requirements in paragraphs 5.6(f) – (l) (Accounting Professional and Ethical Standards Board, 2013).

It is crucial that I absorb the guidelines in the Expert’s Report, as I hope to become a Forensic Accountant in the near future. Acknowledging the differences between facts, assumptions and opinions is essential so that if, and when, I do prepare an Expert’s Report for an investigation, I am able to meet the professional standards of what the Court expects from me. From this, I am able to gain a basic outline of the expertise and now look forward in becoming a Forensic Accountant.

Day in the life of a Forensic Accountant

Important not to confuse Forensic Accounting with Auditing!!

References:

Accounting Professional and Ethical Standards Board. (2013). APES 215 Forensic Accounting Services [Supersedes APES 215 Forensic Accounting Services issued in December 2008]. Retrieved from http://www.apesb.org.au/download.php?code=680

Expert opinion. (2006). Accountancy Age, 15. Retrieved from http://search.proquest.com.ezp01.library.qut.edu.au/docview/217859118?pq-origsite=summon

Federal Court of Australia. (2013). Practice Note CM 7: Expert witnesses in proceedings in the federal court of Australia. Retrieved from Federal Court of Australia website http://www.fedcourt.gov.au/law-and-practice/practice-documents/practice-notes/cm7