1. Chapter 10: Inquiry Methods and Fraud Reports
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2. 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.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

3. The Interviewing Process (slide 1 of 6)
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
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4. The Interviewing Process (slide 2 of 6)
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
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5. The Interviewing Process (slide 3 of 6)
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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

6. The Interviewing Process (slide 4 of 6)
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
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7. The Interviewing Process (slide 5 of 6)
Characteristics of a Good Interviewer
Outgoing personality
Interacts well with others
Helps others feel at ease
Does not interrupt respondents unnecessarily
Displays interest in the subject and in what is being said
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8. The Interviewing Process (slide 6 of 6)
Characteristics of a Good Interviewer
Phrases questions in a non-accusatory manner
Demonstrates a lack of bias
Punctual (on time)
Attired professionally
Deals fairly with respondents
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9. Understanding Reaction to Crisis (slide 1 of 6)
Sequence 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.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

10. Understanding Reaction to Crisis (slide 2 of 6)
Stage 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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

11. Understanding Reaction to Crisis (slide 3 of 6)
Stage 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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

12. Understanding Reaction to Crisis (slide 4 of 6)
Stage 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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

13. Understanding Reaction to Crisis (slide 5 of 6)
Stage 5. Acceptance
Acknowledgement of what happened
A desire to resolve the issue and move on
Interviews are most useful and witnesses most cooperative
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

14. Understanding Reaction to Crisis (slide 6 of 6)
Individuals go through the five stages differently
Individuals can cycle through the emotions of denial, anger, rationalization, and depression a number of times
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15. 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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

16. Conducting an Interview (slide 1 of 5)
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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

17. Conducting an Interview (slide 2 of 5)
Question Typology
Interviewers ask five types of questions:
Introductory
Informational
Assessment
Closing
Admission-seeking
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

18. Conducting an Interview (slide 3 of 5)
Elements of Conversation
Basic Elements of effective conversation:
Expression
Persuasion
Therapy
Ritual
Information Exchange
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19. Conducting an Interview (slide 4 of 5)
Inhibitors of Communication
Competing Demands for Time
Threatened Egos
Etiquette
Trauma
Forgetting
Chronological Confusion
Inferential Confusion
Unconscious Behavior
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20. Conducting an Interview (slide 5 of 5)
Facilitators of Communication
Fulfilling Expectations
Recognition
Altruistic Appeals
Sympathetic Understanding
New Experience
Catharsis
Need for Meaning
Extrinsic Rewards
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21. Mechanics of the Interview (slide 1 of 4)
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
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22. Mechanics of the Interview (slide 2 of 4)
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.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

23. Mechanics of the Interview (slide 3 of 4)
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.
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24. Mechanics of the Interview (slide 4 of 4)
Volatile Interviews
Typically involve close friends and relatives of suspects, co-conspirators, and similar individuals.
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25. Physiology of Deception (slide 1 of 2)
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.
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26. Physiology of Deception (slide 2 of 2)
Verbal and Nonverbal Cues
Extensive academic research suggests that verbal cues are more reliable predictors of deception than nonverbal cues.
Cues to deception suggest 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
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.

27. Honesty Testing The most common inquiry method is the interview.
Three other methods exist:
Pencil-and-paper test
Graphology
Voice stress analysis and polygraphs
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28. The Fraud Report Findings Conclusions Recommendations
Includes:
Findings
Conclusions
Recommendations
Corrective actions taken
Should be:
Objective
Factual
Unbiased
Free from distortion
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.