Interview questions for forensic auditor

I. Introduction – Interviewing Skills For Forensic Investigations Forensic accountants frequently are asked to help attorneys, boards of directors, management, regulators, law enforcement and others to determine the facts surrounding complex financial matters. In a forensic investigation, interviews are critical when determining the who, what, when, where, how and why. A successful interview is essential when gathering facts and steering an investigation in the right direction. This white paper will focus on the interview skills necessary to carry out a forensic investigation.

Many forensic investigations involve fraud allegations. By way of background information, it may be helpful for the reader to understand the basic elements of a scheme to defraud. Fraud includes misrepresentations of material fact, knowledge of the falsity of the misrepresentation or ignorance of the truth, intent, a victim acting on the misrepresentation and damage to the victim. It also should be remembered that attempts to defraud can be a basis of criminal charges as well. In other words, schemes do not have to be successful to be charged criminally. Forensic accountants also should be familiar with some of the common motives exhibited by persons engaging in fraudulent activities. These motives, which sometimes become evident during interviews, often relate to pride, envy, gluttony, lust, anger, greed or sloth, sometimes known as the seven original sins. It also is helpful to understand the term of art known as the “fraud triangle,” which refers to the three elements that generally need to be present for someone to be able to commit fraud, i.e. opportunity, pressure and rationalization. To be able to commit fraud, all three of these elements of the fraud triangle should be considered when planning for an interview.

While most fraud investigations and forensic accounting engagements are resolved outside of the litigation

process, it is highly recommended that forensic accountants approach each case from the perspective that the case ultimately will end up in a civil and/or criminal public trial. Inexperienced practitioners should seriously consider the implications of performing this work without such specialized knowledge.

To better prepare an investigation plan, it is wise to keep in mind what a jury will hear at the conclusion of a case. The juries will be allowed to deliberate on evidence admitted by a trial judge along with a set of written instructions from the court that will offer definitions of key concepts. In white-collar crime or financial crime cases, the government always must prove that there was an intent or willfulness to defraud. Jury instructions given by the court will include definitions of a scheme or artifice to defraud as well as a definition of intent to defraud. For example, a scheme or artifice to defraud can be defined as any design, plan, pattern, or course of action, including false and fraudulent pretenses and misrepresentations, intended to deceive others in order to obtain something of value, such as money. To act with “intent to defraud” means to act with intent to cheat or to deceive. Forensic accountants conducting interviews should be familiar with these concepts before conducting interviews. By becoming familiar with the concepts facing jurors, these concepts can be incorporated into the questioning process for witnesses, victims and suspects. Forensic accountants can obtain examples of proposed jury instructions by accessing public websites such as federal appeals court websites. As an example, the website for the United States 10th Circuit Court of Appeals in Denver, CO, can be accessed at ca10.uscourts.gov to view criminal pattern jury instructions.