Ask me a question, part 1

In September of 2006, I attended a fraud and forensic accounting education conference in Pittsburgh, Pennsylvania, for sharing information about the National Institute of Justice Model Curriculum Project. A report entitled: "Education and Training in Fraud and Forensic Accounting: A Guide for Educational Institutions, Stakeholder Organizations, Faculty and Students" was shared with attendees. One of the sessions included a discussion of the Adrian Project — an interactive presentation developed by an IRS criminal investigation special agent, Stephen Moore, for use with students. (The Adrian Project got its name from Adrian College where it was first used with students in 2002.) The IRS special agent who was leading the session put me in touch with Tim Shanahan, then an IRS public relations officer and special agent based in Rochester, New York, who helped me host our first Adrian Jr. Project on campus. (The Adrian Jr. Project is a shorter version.) Since then, Tim and his team of agents have regularly shared their time and expertise with my classes — always a highlight for my students. Tim has spent several semesters teaching fraud examination classes at other colleges in our area. In part 1 of this column, he shares his thoughts on necessary interviewing skills for anyone interested in pursuing a career in fraud examination. — Pat Johnson

Budding fraud examiners, of course, need to learn how to conduct effective interviews. Most major fraud examination textbooks discuss the interviewing process and many are excellent primers. The ACFE and other organizations produce excellent training videos. However, as authors of this column have written, students learn best by doing. How can we expand beyond the passive nature of textbooks and videos to bring hands-on interviewing experience to students in classrooms?

Here in part 1 of 2 parts, I introduce the framework for a practical scenario-based method for providing a live interviewing experience to students.

The scenario outline includes presentation of a fraud case complete with the fictitious company's accounting ledger books and records that the students are required to review, followed by live interviews with role players to uncover the nature of the fraud scheme and who might be responsible.

I always incorporate each of the following points into our practical exercises:

Know applicable laws/employer policies and procedures.

• Students must understand that fraud examiners don't just walk up and interview anyone they want. Fraud examiners need to follow applicable laws — plus organizational policies and procedures — that vary greatly by public and private sectors, country, state, industry and company. 
• Instructors don't have to share every potential regulation, but they do need to emphasize they exist and show students where they can find them. Thus, practical scenarios should include some information about company policies on interviewing employees.

• Successful interviews are all about preparation. Obviously, the purpose of an interview is to gain information. However, the interviewer mustn't count on the interview to gain information that's available elsewhere. 
• The successful interviewer needs to know absolutely everything he or she can about the who, what, where, when, why and how of the interview topics before the interview. That's why we'll provide students with the scenario and applicable accounting ledger books and records at least one week prior to the interview practical exercise. They'll learn that their interviews will go smoother if they've studied the details of the case's facts in the provided materials.

Logistics of time and place.

• Selecting when and where the interview is conducted is essential for success. Of course, because this is an in-class practical exercise in which we assign interview rooms, the students won't be able to select time and place. However, they're able to devise setups of their rooms. They have to ask: Do I interview across a desk? Do I remove barriers? Do I sit closer or further from the door?

Introduction/rapport.

• In my many years of teaching, I've found that most students often are nervous about their first interviews and will start firing off questions without taking the time to build rapport with the subjects. Poor rapport begets stalled interviews. 
• You need to instruct role-playing interviewees to provide very little information if the interviewer fails to build rapport. When the interviewers are really struggling, sometimes I'll suggest that the interviewees talk about sports teams, the weather etc. to remind the interviewers what I've taught them about building rapport.

Structure and types of questions.

• Inexperienced interviewers often think they can just wing it during interviews. They should prepare outlines of areas they want to cover and write detailed questions. However, warn students they shouldn't be slaves to their outlines; they could miss important cues to deception, fail to recognize new avenues of inquiry and not be flexible enough to change direction. I usually will have my role-playing interviewees include off-handed but potentially relevant references during the interviews to see if the interviewers pick up on them or continue to blindly follow their outlines.

Observation and listening skills.

• Many new interviewers (and some experienced ones) are so busy thinking of their next questions or making sure they do everything right they forget to listen and observe. This skill requires practice, which is what the interview scenario provides. I don't expect the students to master this. (Experienced interviewers still are learning to look and listen.) However, other members of the student interview teams can assist with observation while the lead interviewers focus on their questions.

How do we teach it?

In the next column in the July/August issue, we'll look at how instructors can prepare in-class practical applications to give students the ability to address the above points. I'll supply the specific steps of preparation and execution of the in-class practical interview exercise.

We'll review how to:

• Construct a fraud scenario that incorporates company policies and financial records. Some of the major fraud examination textbooks include ready-made scenarios complete with accounting books and records. However, I prefer to create my own scenarios and documents. It might take more time, but I can tailor exercises to areas that are most crucial for my students. 
• Discuss in class the week prior to the practical application interviewing basics as provided in textbooks and ACFE training materials. You'll divide the students into groups and provide them with the fraud scenario so they have time to study the materials. 
• Bring in outside role-playing interviewees, such as other faculty, former students or ACFE chapter members. 
• Arrange for each student to conduct at least one interview. 
• Ask the role-playing interviewees to provide feedback about the interviews with the class at the end of the exercise.
• Instruct the students to write memorandums summarizing their interviews that will include an analysis on the type of fraud and discovered evidence.

See Question Typology for more information about interviewing from the ACFE's 2016 Fraud Examiners Manual, 3.321-3.322.

Tim Shanahan is a special agent/polygraph examiner for the U.S. Department of the Treasury, IRS Criminal Investigation Division. His email address is: Timothy.Shanahan@ci.irs.gov.

Patricia A. Johnson, MBA, CFE, CPA, is the program coordinator of the Master's in Science in Forensic Accounting program at Canisius College in Buffalo, New York. She's chair of the ACFE Higher Education Advisory Committee. Her email address is: johnsonp@canisius.edu. 

Question Typology

When conducting an interview, an interviewer can ask five general types of questions: introductory, informational, assessment, closing and admission-seeking.

Because fraud examinations move in a linear order, starting with the general and working to the specific, the first interviews should be with those individuals who are least likely to be involved, working toward those individuals who are more likely to be involved.

The first interviews are conducted for the purpose of gathering information; therefore, they should be nonconfrontational, nonthreatening and should encourage open communication. In these routine interview situations, the interviewer normally will ask only three of the five types of questions: introductory, informational and closing.

If the interviewer has reasonable cause to believe the respondent isn’t being truthful, he can ask assessment questions. And finally, if the interviewer decides with reasonable cause that the respondent is responsible for misdeeds, he can pose admission-seeking questions.

Introductory questions

Introductory questions are designed to meet four objectives: to provide an introduction, to establish rapport, to get the respondent to agree verbally to cooperate in the interview (i.e., establish the interview theme), and to observe the respondent’s reactions to questions.

Informational questions

Once the interviewer sets the proper format, the interviewer then turns to the fact-gathering portion. Informational questions should be nonconfrontational and nonthreatening, and the interviewer should ask them for the purpose of gathering unbiased factual information.

Typically, the interviewer will ask three types of questions during the fact-gathering portion of an interview: open, closed and leading. The interviewer uses each type in a logical sequence to maximize the development of information. If the interviewer has reason to believe that the respondent is being untruthful, he can pose assessment questions. Otherwise, he should bring the interview to a logical close.

Closing questions

Closing questions seek to close the interview positively. In routine interviews, closing questions serve these purposes: reconfirm facts, gather additional facts and conclude the interview in a manner that maintains goodwill.

Assessment questions

If the interviewer has reason to believe the respondent is being deceptive, he should begin asking assessment questions. These are questions specifically designed to establish the respondent’s credibility. When assessing credibility, the interviewer must observe the subject’s verbal and nonverbal responses. By observing the respondent’s verbal and nonverbal responses to these questions, the interviewer can assess the respondent’s credibility with some degree of accuracy. That assessment will form the basis of the interviewer’s decision about whether to pose admission-seeking questions and seek a legal admission of wrongdoing. 

Admission-seeking questions

Again, admission-seeking questions are designed to obtain a legal admission of wrongdoing. The choice of when to conduct an admission-seeking interview of a suspect is critical. Admission-seeking interviews are reserved specifically for individuals whose culpability is reasonably certain. They should take place only when all other reasonable investigative steps have been completed and as much information as possible has been developed from other sources. In addition, the interviewer should be able to reasonably control the place, time, and subject matter of the interview.

Admission-seeking questions serve at least three purposes: (1) to clear an innocent person (2) to encourage the culpable person to confess and (3) to convince the confessor to sign a written statement acknowledging the facts. But the interviewer must be careful to pose these questions in a way that doesn’t violate the rights and privileges of the subject.