All the People All of the Time

Education2“We are again honored to have a fifth guest post from our friend and Richmond Chapter member, Rumbi Bwerinofa, CPA/CFF.  Rumbi is a Director of the Queens/Brooklyn Chapter of the New York State Society of CPAs and a member of the NYSSCPA Litigation Services Committee. She is the editor of TheFStudent.com, where she discusses financial forensic issues and she  has just returned from a trip to Africa.” – Charles Lawver-2014 RVACFES Chapter President…

Recently, I found myself in front of a class of teenagers and I was pretty nervous. Audiences of teens and children tend to be more brutally honest than adult audiences. If you’re giving a talk and teens and children have no interest in what you have to say, they’ll let you know, in no uncertain terms. It’s like my six year old cousin who will say things to me like, “Big Rumbi, you’re not very good,” when I’m tying his shoelaces.

But I digress. I was speaking to rising 12th graders as part of the NYSSCPA’s Career Opportunities in the Accounting Profession (COAP) program. As part of five days of events that included visits to companies in various industries and networking sessions, I came in to talk to the students about being a CPA, Certified in Financial Forensics. The specific topic for this particular interactive session, was “Interviewing as Part of a Forensic Accounting Investigation”.

After discussing what forensic accountants do and the various arenas in which they practice, we quickly moved on to the subject of interviewing. Although I was speaking in the context of a forensic investigation, the skills and, at times, the art of information gathering conversation are vital for CPAs and fraud examiners working in every sub-specialty. For example, when auditors are assessing an entity’s control systems, they need to talk not only with department heads, but also with all levels of departmental line employees to find out what those employees actually do. Recently, I found myself hanging out with the staff of the accounts payable (A/P) department on a check-writing day. The A/P staff were paging through a massive pile of checks that they had just run. When I asked what they were doing, they explained that they were scanning the checks for any anomalies such as odd invoice numbers, duplicates and checks that required special treatment. They have been working in this department for a while and, based on historical issues, they independently adopted measures to reduce the numbers of errors, such as duplicate payments, returned checks and checks being credited to incorrect accounts. When I later read the operations manual for A/P, this control step was not listed. Only talking with those directly involved in a process can highlight the nuances of that process and, at times, shine light on those soft spots in a system where fraud or error could potentially occur.

When carrying out a forensic investigation, a forensic accountant may perform interviews in order to gather information and evidence pertinent to the investigation. The ultimate goal(s) of interviews will determine the questioning approach but, in all cases, the forensic accountant will be seeking the truth. Although those from whom we seek information may not always be honest with us, it’s a truism that even the best liars can’t fool all the people all of the time. In the same vein, forensic accountants should also keep in mind that they can’t catch all the liars all of the time. Even with the modified goal of catching most of the liars most of the time, any forensic investigator will find herself spending a lot of time studying human behavior and training extensively to improve interviewing skills is a vital subset of the profession.

Thus, when talking with the COAP class, I emphasized that, although very important, the act of interviewing is only a single component of a complete forensic investigation. Forensic accountants will also find themselves called upon to gather information and corroborating evidence using forensic accounting methods. A good interview can point out numerous, additional investigative angles to explore.  I did, however, point out to the class that information gathered from an interview must always be corroborated.  An interviewee’s mere unsubstantiated word, in and of itself, can never be considered reliable enough to constitute sufficient evidence in a court of law; thus the very process of obtaining required substantiation is a key component of what the forensic examination is all about.

We then went on to discuss how to approach an interview. Interviewing is not interrogation. Unlike the overly aggressive interrogations appearing on TV cop shows that portray practically captive interviewees, professional forensic interviews are planned to take place in far more relaxed and less constrained environments. The interviewee should always feel that the interview is voluntary and that s/he is free to leave at any point in time, should they wish. The interviewer, in turn, should consciously strive to project a polite, caring, respectful and professional demeanor at all times.

We then turned to a consideration of the process of interview preparation. Effective forensic accountants put a lot of work into preparing for any interview, consciously choosing everything from the location of the interview and seating arrangements, to formally documenting the goals of the interview and the questions that will be asked to reach those goals. It’s very important to pick an interview location that’s a private space, with minimal distractions and interruptions. As I said, the interviewers should also make sure that the interviewee has easy access to the exit; this is a safety measure but also so that the interviewee isn’t made to feel in anyway that s/he is being held captive and, therefore,  isn’t free to leave at any time. Every measure should be taken to ensure that the environment is non-threatening.

Forensic accountants must establish, and formally document, the goals of their interviews beforehand, extensively planning the questions that they want to ask during the interview. They must also plan to ensure they have adequate time to cover all the topics and questions they wish to ask as well as any follow-up questions that always arise during any investigative interview.  It’s vital to be sure that an interview isn’t negatively impacted because the investigators have run out of time. Finally, plan to have two parties conducting the interview. One person will be asking the questions and be focused on the subject matter of the interview, while a second party, seated to the side and somewhat out of the interviewee’s view, will be taking extensive notes.

We then moved on to conducting the interview itself.  We discussed beginning the interview by creating a rapport with the interviewee and putting him or her at ease by the asking of simple questions, such as his or her full name and position and how long they’ve occupied their position. As the interview proceeds, the questions will naturally become more focused on obtaining information on the subject of the investigation.

During the interview, forensic accountants will apply their formal training in human behavior to assess verbal and non-verbal cues to assess their witness’ credibility. In addition to observing the cues, forensic accountants will also make use of any additional evidence they have at hand to assist in determining the validity of the information the interviewee is providing. Subsequent to the interview, and with their interview notes to guide them, the investigator(s) will conduct follow-up on the value of the interviewee’s key assertions.

There is no holy grail when it comes to telling whether or not a person is telling the truth. Some people are terrible liars but a lot of criminals, especially career criminals, are surprisingly good at it. Deception is a prime element of effective fraud implementation and many criminals have a history of successfully applying formal methods of deception to fool even the most experienced investigators interviewing them. This is why skills related to professional experience, training and corroboration are so vital to forensic accountants. Try to keep in mind that no one is infallible when it comes to interviewing; everyone can be fooled sometime.

We closed our session with an interactive case study, where two members of the class posed as suspects in a robbery and the rest of the class set up an interview. Our two suspects convincingly threw themselves into their roles. After setting up the room, a member of the class sat as the interviewer and asked the questions collected from other members of the class. It was an enlightening session, where the students asked excellent questions and the majority were able to correctly identify the perpetrator; that the team’s selection was, however,  not unanimous was a great reminder that we can’t catch all the liars all of the time.

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