Interviewing Skills and Techniques Reviewed by Momizat on . Effective Interview Planning in a Fraud Investigation This article is a republication of Chapter 10 of The Corporate Fraud: The Executive’s Survival Guide, auth Effective Interview Planning in a Fraud Investigation This article is a republication of Chapter 10 of The Corporate Fraud: The Executive’s Survival Guide, auth Rating: 0
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Interviewing Skills and Techniques

Effective Interview Planning in a Fraud Investigation

This article is a republication of Chapter 10 of The Corporate Fraud: The Executive’s Survival Guide, authored by Ray Dunkle of Red Flag Reporting. This article features the chapter written by James I. Marasco, CPA, CIA, CFE. In this chapter, Mr. Marasco addresses the proper approach for conducting interviews. This includes what type of questions to ask, what verbal cues and mannerisms may suggest, and the “do and do not’s” of proper interviewing. It is important to be aware of specific requirements governing the jurisdiction in which the interview takes place. States have different laws pertaining to recording audio and video of individuals, along with laws governing how employees should be treated. Another complexity to consider is whether the individual is a member of a labor union, which may have its own restrictions.

fraud_interview“It’s a basic truth of the human condition that everybody lies.  The only variable is about what.”

― Hugh Laurie as Dr. Gregory House in House

 

Introduction

The interview process is a key component in a forensic investigation.  In some instances, a skilled fraud examiner may elicit a confession from an alleged perpetrator, but more often, the information gathered assists in plotting the future direction of the investigation.  If not conducted properly, though, the interviewer can do more harm than good.  In this chapter, we will offer a guide through the process, identifying ways to make an interview more effective while protecting against potential personal liability.

“I always tell the truth.  Even when I lie.” ― Al Pacino

Interview, InterrogationWhat’s the Difference?

The communication between a fraud examiner and a witness or suspected perpetrator is described as an interview.  Interviews are usually categorized as voluntary, fact-finding dialogue.  In contrast, an interrogation, usually performed by law enforcement, hopes to compel a subject to offer a confession or to name others who may be involved in the matter being investigated.  The rights of the interviewee must be considered in both interviews and interrogations, although the circumstances may differ.  Both are important components of any investigation and proper planning and execution are critical.  An effective interview/interrogation could help identify the perpetrator or narrow the investigation considerably, saving countless hours.

For purposes of this chapter, we are going to address the proper approach for conducting interviews.  It is important to be aware of specific requirements governing the jurisdiction in which the interview takes place.  States have different laws pertaining to recording audio and video of individuals, along with laws governing how employees should be treated.  Another complexity to consider is whether the individual is a member of a labor union, which may have its own restrictions.

“If you tell the truth, you don’t have to remember anything.” ― Mark Twain

The Interview Process

  1. Planning

a) Who should be interviewed?

As the interviewer decides to commence, careful consideration should be given to who should be interviewed.  Time is valuable.  Concentrate on suspected perpetrators, witnesses to the alleged infraction, or others with valuable knowledge.  A preliminary investigation usually identifies key individuals who should be interviewed.  It is common for those key interviews to surface the names of additional individuals who should be considered for an interview.

b) Where should the interview take place?

Interviews should be conducted where the parties will be free from disruption.  They can either be held on the company premises or off-site at an agreed-upon location.  The room should be away from where other employees can view the participants, unless the interviewer is acting alone.  In that case, some level of visibility from outside the room should be present (glass conference rooms, doors with glass, etc.).

The positioning of the interviewer and interviewee is also important.  Access to the exit should not be impeded by those conducting the interview.  It is also suggested that the interviewer(s) sit across from the interviewee in full view to observe any physical mannerisms he or she may exhibit.

c) When should the interview take place?

Since the interview is a voluntary request by the interviewer, it should be offered at the convenience of the individual being interviewed.  When multiple subjects are involved, interviews can be scheduled one after another.  However, it is recommended that individuals be interviewed separately and ample time should be scheduled between interviews to allow for time overruns, note-taking, and to minimize subjects crossing paths in the waiting area, if such a concern exists.  Interviews should occur as soon as possible after the event to minimize memory loss on behalf of the participants.

d) Who should conduct the interview?

An experienced interviewer should be the lead for the interviews being conducted.  It is also a good idea to have a second person assisting.  The second individual would be the note taker and observe the subject closely for behavior changes/mannerisms as certain questions are asked by the interviewer.  The assistant can occasionally ask questions, but the process flows more smoothly if one person directs the questions.

e) In what order should interviews occur?

If your purpose is to identify a perpetrator, the best course of action is generally to start with the least likely culprits, gather the most evidence and then talk with the most likely perpetrator.  Otherwise, the order in which individuals are interviewed will not make much of a difference.  Being prepared and asking the right questions will be of greater importance and will be discussed further along in this chapter.

  1. Preparation

The preparation phase is critical to conducting a worthwhile interview.  The interviewer should have prior knowledge of the individuals being interviewed.  Their backgrounds, relation to either the suspected perpetrator or other interviewees should be known, and their relevancy to the investigation should be evaluated before the interview takes place.  Any preliminary evidence obtained in the investigation at this point should be reviewed and considered as to whether it would be useful to introduce during the interviews.  Notes from other interviews should also be reviewed to determine if any facts or circumstances need additional collaboration.

Prior to contacting individuals and scheduling meetings, a theme or approach should be developed.  To ensure greater cooperation, a non-threatening tone should be considered.  For example, after introducing oneself, examiners could indicate that they had been retained to perform a compliance review and were instructed by management that interviewee would be an important person to talk with.  The objective is to be as non-intimidating as possible to get the subject to the interview.  An intimidating tone at the onset could threaten participation.

The most productive interviews usually follow a written outline or drafted list of questions.  All examiners should have a copy, but is not recommended that written questions be provided to those being interviewed.

As the interview takes place, answers to questions may lead the interviewer down additional paths.  Flexibility in following the outline is important; modifying what is asked and when will preserve a natural flow and elicit better answers.  Therefore, ample room on the page for note-taking should exist between written questions to allow for off-topic additions.

  1. The Interview

Introduction

Skilled interviewers have an approach they feel comfortable with and introduce at the beginning.  However, the attitude of the individual being interviewed could impact or influence the course of events.  Most professionals agree that it is important to make the interviewee feel comfortable.  It is natural the subject will be nervous at the start.  The best way to build a rapport and ease them into conversation is by having them talk about themselves.  Inquire how long they’ve been employed by the company, their job duties, etc.  People are usually less intimidated talking about something they know well—in this case, themselves.  As the interview progresses, keep in mind that an examiner learns more by listening than talking.  Keep the subject talking, but on point.  Do not let him or her waste time by veering off topic concerning things not germane to the investigation.

Information Gathering

As the interview moves from discussing the background of the interviewee toward the prepared questions, a timeline of events should be established, working chronologically towards the present.  The questions should be framed to elicit a full response which provides the interviewer with the greatest amount of information.  To accomplish this, open-ended questions should generally be used:

Open-ended Questions require a more thorough response than a simple yes or no.  For example, instead of asking, “Do you assign the work shifts at the company?,” phrase the question, “Explain to me how the various work shifts get assigned.”  As you will notice, the subject will be forced into a more expanded response.

Closed-ended Questions can be used to confirm specific events.  They are structured to require a simple yes or no answer.  Closed questions can assist the interviewer in quickly fact-checking circumstances.  An example is, “At any time last week, did you work the B shift in the warehouse?”  Because of the shortened response, questions can be triggered in rapid succession providing the interviewer with valuable information, possibly confirming what was already suspected.  Many times, these types of questions are saved towards the later stages of the interview.

Leading Questions—Most people are familiar with these types of questions from courtroom drama on television.  Essentially, leading questions contain part of the answer in the question and lead the subject to answer in the affirmative.  For example, “Isn’t it true that you have essentially run the entire warehouse operation the last two years?”  Leading questions are helpful in quickly confirming key components of an investigation.

During this stage of the interview, as more pointed questions are being presented, careful attention should be made to both the body mannerisms and verbal cues being exhibited by the interviewee.  The note taker in the room should be observing the reactions of the subject as the questions are being asked.  In the notes, underneath each of the prepared questions, any significant physical observations should be documented.  Verbal cues and body mannerisms can be just as important as the actual answers being offered in an interview.

Here are some of the most telling verbal cues and body mannerisms:

Verbal Cues—Individuals acting in a deceptive or dishonest manner are more likely to exhibit:

  • Repeating the question that is being asked. This is usually done to offer them additional time to prepare the best possible answer.
  • Answering with a question like, “Why would I?”
  • Noticeable speech patterns. Deceptive individuals may speak rapidly or very slowly and cough repeatedly.
  • A reluctance to end the interview session. Interestingly enough, a person being dishonest will hesitate to end an interview until he or she feels the interviewer has been convinced of the story being told.
  • Avoiding the use of harsher terms such as, “lie, cheat, or steal.” Deceptive individuals tend to utilize softer terms like “miscommunication or borrow.”
  • Overemphasizing their credibility by using oaths or character alibis. Phrases such as, “I swear” or “Check with my friend” will be used to bolster their trustworthiness.
  • Qualified denials. In answering questions, the deceptive individual may qualify their denial by appending to the question being asked.  For example, “I never worked the B shift this month…in the Main Street warehouse” or “As far as I know, I have never worked during those times.”
  • Straying off topic. Deceptive individuals may consistently avoid answering direct questions by purposely discussing irrelevant events.

Body Mannerisms—Individuals acting in a deceptive or dishonest manner are more likely to exhibit:

  • Noticeable anatomical changes such as perspiration, increased heart rate, and deep, pronounced breathing.
  • Demonstrative hand activity. Deceptive individuals are more apt to use their hands to accentuate their responses.  They may also use their hands to cover their mouths to conceal their responses.
  • Noticeable posture positioning. Dishonest individuals may angle themselves towards the door, cross their arms or legs, or completely change their posture as certain questions are asked.  These types of responses offer a psychological defensive coping mechanism.
  • Nervous behaviors. Subjects spinning lies during an interview may click their pens or tap the table, rock their chairs, play with their hair, etc.
  • Avoiding eye contact with the interviewer. A deceptive individual often will look away or down when answering, or stare around the room, to avoid looking directly at the interviewer.

At this stage of the interview, it is time to start introducing documentary evidence, if applicable to your case.  For example, continuing with our warehouse theft theme, the interviewer may introduce inventory reports or warehouse access logs during this stage of the interview.  As these documents are produced and shown to the subject, it is important for the note taker to pay close attention to the subject’s body mannerisms.

The interview is more effective and efficient if the interviewer has the documents organized and readily available.  Areas of special interest should be highlighted or flagged so they can be easily referenced.  Fumbling through a box of papers or a thick file can easily derail an interview and cause it to lose momentum.

Closing

During the closing phase of the interview, the interviewer needs to clear up any ambiguities or loose ends.  In some cases, this may be the only opportunity to have this type of discussion with a particular individual.  Another option to consider is having the interviewer excuse themselves for a quick consult with their colleague to confer if anything was missed.  Be sure to inquire whether the interviewee has anything more to add or names of other individuals who should be interviewed.  Casually request their permission to contact them again if something further develops and be sure to have all of their current contact information.  One approach to this request could be, “I hope you don’t mind if I reach back out to you if something else pops up.”  This not only leaves the door open for another conversation, but also affords them the opportunity to get back in touch with you after they have had a chance to reflect on the discussion themselves.  Finally, lay the groundwork for this by thanking them for coming in and their anticipated future cooperation.

“The reason I talk to myself is because I’m the only one whose answers I accept.” ― George Carlin

The Admission-Seeking Interview

At some point, the interviewer may interview a subject who is potentially the suspect or perpetrator.  In this situation, the interview can be structured to seek an admission of guilt or to clear the person of suspicion.  The admission-seeking interview takes a more direct approach at discovering answers and determining culpability.  Some important attributes that should be considered:

  • Use less poignant or “loaded” words to describe the act.
    Example—During your questioning, use terms such as, “unaccounted funds” or “irregularities” versus “stolen property” or “fraud.”
  • Present facts and documentary evidence that supports the subject’s involvement and directly follow with an accusation of their participation.
    Example—The accusation could be phrased, “Based on the information just presented, Frank, this investigation directly links you to the property that went missing from the warehouse on xx.
  • Watch for their reactions, repeat the accusations as necessary, and personalize the message by using their name.
    Example—Once the accusation is volleyed, watch for their verbal and non-verbal reactions.  Most people will initially deny the statement.  Remember not to let them stray off topic.  Quickly redirect them and reiterate the evidence linking them, use their name in the delivery and repeat the accusation again.  By using their name, the interviewer can forge a personal connection to gain the trust of the subject, encouraging them to relieve themselves of the burden of guilt.  Denials will usually follow, albeit less forceful, and in a lower voice.
  • Counter the denials by modifying the accusation and offering rationalizations.
    Example—If the subject rejects the accusations and continues to deny, offer a modification.  Present the facts again and modify the accusation accordingly, “Frank, we both know that electronic equipment is missing from the warehouse.  When did you start removing it?”  Offer rationalizations to help them along such as, “Was it after your wife lost her job, Frank, or after the Company cut back your overtime and you needed some extra money?”  By sympathizing with the subject and offering support, the interviewer is trying to gain their trust on a subconscious level.  “Frank, I know where you’re coming from.  If I was in your situation, I may have been forced to make the same decisions.  So tell me, when did you start taking equipment from the warehouse?”
  • Secure the confession and gather information.
    Example—As the subject breaks down and admits their involvement, the interviewer needs to quickly collect the relevant facts without condemnation.  Subject, “I took a few of the televisions that had damaged boxes.  I figured we’d discount them anyways.”  Interviewer, “Frank, you’ve been working in the warehouse for two years.  Did you start taking inventory shortly after you started?”  While the opportunity exists, the fraud examiner needs to take advantage and try to identify who else may have been involved, where the fraud occurred, for how long, how it was perpetrated, and the total exposure to the organization.An oral confession, especially with another witness present, is admissible in court.  Securing a written confession is ideal, but may not always be practical.  Statements can be prepared by the interviewer and signed by the subject, but could take a great deal of time to capture the necessary elements.  Whether the subject or interviewer prepares a written statement, it should include the facts surrounding what occurred, such as estimated dollar amounts, that the confession was voluntary and truthful, and be signed and witnessed.

“No man has a good enough memory to be a successful liar.” ― Abraham Lincoln

Specialized Techniques

Techniques described above, such as behavior analysis, are used to observe and analyze how subjects respond to questioning.  Another common technique involves incorporating behavior-provoking questions during the interview.  In this situation, the interviewer asks a series of open-ended questions that are structured to evaluate the response against how a truthful person would respond.  The verbal and nonverbal answers are closely analyzed to measure possible deception.  Some example topic areas that can be applied include:

  1. Purpose – “Frank, do you know why I wanted to talk with you this morning?”
    Truthful subjects will usually identify the issue in detail, while deceitful ones will seek to avoid directly confronting the issue.
    Answers – “I heard there were some thefts in the warehouse recently and you’re investigating them.” versus, “I have no idea.”
  2. Knowledge – “Frank, would you have any knowledge or involvement in those warehouse thefts?”
    Truthful subjects will usually offer spontaneous, direct and sincere denials, while others may ask you to repeat the question or be evasive in their response.
    Answers – “Me, No way!” versus, “Ahh, you think I’m involved in that stuff?”
  3. Suspicion – “Frank, do you know anyone who is involved in the warehouse thefts?”
    Truthful subjects will usually offer a name or state that they believe everyone is honest that they work with, while a deceitful person will ask a question back or have nothing relevant to offer.
    Answers – “I can’t believe anyone here would do such a thing.” versus, “How would I know?”
  4. Elimination – “Are there people working at the warehouse who we can eliminate from suspicion?”
    Truthful subjects will usually offer a name, while others may ask a question back or have nothing relevant to offer.
    Answers – “Steve and Joe would never do something like that!” versus, “How would I know?” or “I don’t trust anybody.”
  5. Credibility – “Frank, do you think someone is actually stealing electronics from the warehouse?”
    Truthful subjects will usually acknowledge a crime has been committed, while a deceitful person will indicate it could be a mistake or accident.
    Answers – “Probably, if what everyone is saying is true.” versus, “No, it’s probably just a mistake.”
  6. Punishment – “What do you think would be a fair punishment for someone caught stealing product from the warehouse?”
    Truthful subjects will usually suggest harsh punishment, while others will advocate for leniency.
    Answers – “They should be fired and criminally charged!” versus, “That’s not up to me to decide,” or “Maybe it was an accident.”
  7. Think – “Frank, did you ever think of taking inventory from the warehouse?
    Truthful subjects will usually offer a direct denial, while a deceitful individual may indicate otherwise.
    Answers – “No way, are you crazy?” versus, “Sure, doesn’t everybody?  But, I would never do it.”
  8. Second chance – “Do you think that the guilty party should be given a second chance?”
    Truthful subjects will usually respond with a firm negative, while others will hedge or offer excuses.
    Answers – “No way, they’ll just do it again!” versus, “Sure, maybe they were going through a rough patch or something.”
  9. Results – “Frank, when we complete our work, what do you think our investigation will indicate?
    Truthful subjects will usually indicate that it will clear them, while a deceitful person will use a qualifier such as “should” or “hope”.
    Answers – “It will clear me.” versus, “I hope it clears me.” or “I guess we’ll find out.”
  10. Bait/accusation – “Frank, based on our investigation, we believe you were involved.
    Truthful subjects will immediately reject that and offer a strong denial, while someone else may respond with a hesitation and/or weak denial.
    Answers – “No way!” or “That’s impossible!” versus, “Ahh, not that I’m aware of” or “I don’t think so.”

At the end of the questioning, both the verbal and nonverbal responses are evaluated to determine a suspect’s level of deceit and ultimate involvement.  This approach is another option in the interviewer’s toolbox and has been found to be highly effective by various types of organizations in conducting investigations.

“It is better to offer no excuse than a bad one.” ― George Washington

Interview Do’s and Don’ts

The interviewing aspect of an investigation offers a valuable opportunity for the interviewer to gain or amalgamate important pieces of the case, but not without legal exposure.  Knowing what to say, when, and how are critical.  Some essential do’s and don’ts to consider:

Do

  • Interview individuals separately. While it is okay to have more than one interviewer in the room, refrain from having more than one subject.
  • Prepare thoroughly before scheduling the interview and consider whether the subject needs to have representation by contractual obligation (union representative, advance notice, etc.).
  • Take notes during the interview. It would be beneficial to have one person asking questions while the other takes detailed notes.
  • Position the subject so they are in full contact with the individuals conducting the interview. This allows non-verbal cues to be read more easily.

Don’t

  • Impede the subject’s ability to leave the room. In contrast to an interrogation performed by law enforcement, the interview is voluntary and the interviewee is free to leave at their will.  Suggesting otherwise could have adverse consequences.
  • Verbally harass the subject. If the interviewee becomes difficult, do not lash back.  Attempt to diffuse the situation by staying calm, acknowledging the subject’s point, and trying to enlist the subject’s opinion to solve the problem at hand.  Example, “Frank, I understand what you are saying, but put yourself in my shoes, looking at these access logs, who else could have been in the warehouse during those times?”
  • Let the interviewee wander off track with their answers. Keep them focused and interrupt them when they start to drift.  Pepper them with relevant questions to keep the interview productive.
  • Promise confidentiality or immunity. A fraud examiner is not an agent of the courts and does not have client   Depending on what is revealed, the interviewer may be a mandatory reporter and have no choice but to reveal what  is learned.  Promising confidentiality or immunity is impractical.
  • Read individuals their Miranda rights. A fraud examiner conducts voluntary interviews.  Miranda rights should be considered for interrogations or interviews conducted by law enforcement.

“Half the lies they tell about me aren’t true.” ― Yogi Berra

Audio-recording and Videotaping Interviews

As technology has progressed, it has become easier and more economical to capture events digitally.  Before deciding to record an interview, the applicable laws should be reviewed.  States have differing laws regarding audio recording and videotaping individuals without their consent.  While requesting a subject’s permission or disclosing to them at the onset can protect against legal consequences, an individual being recorded may choose to reveal less information.  If two people conduct the interview and capture what is happening, it may be better to pass on recording the events.  If the fraud examiner proceeds with recording the interview, consent should be recorded at the onset to establish its validity.

“There are three sides to every story – yours, mine, and what really happened: the truth.” Jeyn Roberts, Rage Within

Drawing Conclusions

It is important to critically review the information gleaned from the interviews and not to prematurely formulate conclusions.  Individuals interviewed may have their own motivations for misleading an investigation.  All of the evidence must be thoroughly reviewed along with the notes and observations gathered from the interviews.  If an admission of guilt was gained through an interview, the subject may be minimizing their involvement.  Upon initially confessing, perpetrators usually offer inaccuracies.  It is common for a subject to minimize the amount of property stolen, how far back the activity occurred and what other areas of the organization were exploited.  A careful fraud examiner will evaluate all the documentation and information gathered before completing an investigation and determining the ultimate truth.

References/End Notes

Mary-Jo Kranacher, Richard Riley & Joseph Wells, Forensic Accounting and Fraud Examination, (New York: John Wiley & Sons, 2011)

Joseph T. Wells, The Principles of Fraud Examination, Third Edition, (New York: John Wiley & Sons, 2011).

John E. Reid and Associates, Inc., “The Reid Technique, Interviewing and Interrogation,” Audio Cassette Series of Interviewing and Interrogation, 1987.

James I. Marasco, “Anatomy of an Interview, Part I—How to Best Solicit the Truth,” Fraud Matters, Spring 2007.

James I. Marasco, “Anatomy of an Interview, Part II—Why a Trained Interviewer is Critical,” Fraud Matters, Spring 2007.

For more information on this book, please visit http://efprgroup.com/news/two-efpr-group-llp-experts-co-author-new-book or http://www.redflagreporting.com/check-out-the-foreword-to-our-founders-new-book/

Mr. Marasco, CPA, CFE, CIA, is a partner with EFPR Group, a Rochester, New York based regional CPA firm and co-founded their national consulting firm, StoneBridge Business Partners, which provides forensic and internal audit services nationally. Mr. Marasco practices exclusively in the fraud and forensic areas and travels extensively throughout the United States working for various Fortune 1000 companies and attorneys involved in litigation matters. In addition to being a Certified Public Accountant and Certified Internal Auditor, Jim is a Certified Fraud Examiner; a court-recognized expert witness; lecturer on varying subjects of fraud and forensic auditing; and has published dozens of articles covering these topics.
Mr. Marasco can be contacted at (585) 340-5125 or by e-mail to jmarasco@efprgoup.com.

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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