How to write 'right'

Writing skills are essential in this profession. The most successful fraud examiners, investigators, attorneys and business people are those who can write clearly, articulately and persuasively using facts they've uncovered in the course of the fraud examination. In this column, we discuss some of the key practical aspects that help new Certified Fraud Examiners as they write fraud examination reports.

Organization and planning

One of the most overlooked aspects of successful report writing is outlining the report before you even begin the case. Most new CFEs think that report writing is the final step in the fraud examination, but you should start it as soon as you receive the assignment to guide you and save you time and worry at the end.

During the case-planning process, you'll work to identify the allegations, scope the case and review the elements of the fraud. A report should be S-M-A-R-T: short, material, articulate, relevant and timely. It must also be easy to follow and flow well for the reader.

The report must be truthful and resolve the allegation one way or another. The report must stand on its own so any uninvolved persons can read, digest and understand it. Write as if you're explaining your fraud examination to your mother.

Reports answer questions

The best reports answer the basic investigation questions:

• Who (persons and entities).
• Did (or didn't do) what (relevant conduct, actions or inactions). 
• When (date/time). 
• Where (location). 
• Why (motivation).
• How (the mechanisms to perpetrate the fraud).

You then organize the case report by section to help the reader understand the case from start to finish. You'll generally begin with a predication statement, and then move on to major findings, a summary of evidence that supports the findings and any recommendations for improving internal controls. It should also include the key pieces of evidence that were the basis for your findings.

Predication of the case

Predication is the factual basis — sometimes referred to as "reasonable grounds" — to begin to conduct an investigation or examination. The reader will want to know how you initiated the examination. Once an indication of fraud reveals itself — either through an audit, a tip or a red flag — you begin your review and begin to form a theory of the investigation.

Summary: case overview

An executive summary of key points is essential. You can sum it up in four to five paragraphs that describe the case in a way that's easy to understand. This can be difficult especially when multiple entities or persons are involved. Think about it like this: How would you describe this case to the U.S. president in three minutes while he's walking to a meeting?

Evidence says it all

We call them "paper cases" for a reason. Not only are they heavy with evidential documents but participants often still use paper products — affidavits, declarations, motions, memorandums, etc. — to initiate, litigate and settle cases. The better you are at putting cogent thoughts down on paper, the more case participants will respect you as a fraud examiner. People remember well-written products because they reflect writers' expertise — not just the evidence. So it's critical to always put your best foot forward.

Outline the evidence in a simple, easy-to-follow manner. For example, you've been assigned to examine an investment banker who has allegedly converted legitimate investment funds to his personal use without authorization. During the investigation, you've examined bank statements, financial records, email correspondence, travel records and employment histories. You've identified six significant events, which appear to be thefts. In the report, arrange the thefts by chronological dates.

Also include a summary of interviews with their purposes and main points. Include full reports of interviews in the appendix.

Here's a sample interview summary:

Victim investor Robert M. Jones was interviewed on January 30, 2014. Jones described his initial meeting with McGillicuddy [the banker] in 2009 and his first payment to McGillicuddy of $3,120 on April 3, 2009. Between April 3, 2009 and Aug. 3, 2013, Jones paid McGillicuddy a total of $109,232 on 13 separate occasions.

Exhibits — including summaries, charts, graphs, organizational and flow charts, tables and maps — are helpful for understanding the information in the report. We often understand things better when we can see the issues discussed. However, exhibits, summaries and charts should never replace the written material but merely add to its understanding.

Specifically describe the relevant conduct and answer those "who, what, when, where and how" questions. Don't speculate about the "why" unless the suspect has admitted to committing the crime for a specific reason.

For example, here's a summary of conduct in an internal theft case:

On or about July 1, 2013 [when], Cyndi A. Smith, an accounting and finance employee of CargoShorts, LLC [who], of Hollywood, California [where], wrote a business check [did what], number 3384, drawn on the account of CargoShorts, LLC, payable to herself for $2,011 without authorization or approval from company officials [how].

Pitfalls and problems

New fraud examiners and investigators are often so excited to have "caught the bad guy," that they forget to look at the bigger picture of the case, which includes any potential defenses. Be sure to study other successful fraud examination reports.

Immediately inform the supervisor or attorney about any defects in the report or any investigative product, such as errors, typos, gaps and questions. As you're writing the report, of course, you'll identify these problems.

Follow all leads to their logical conclusions. Verify and corroborate. Never express any opinions about guilt or innocence. A report is literally "just the facts." Hunches, speculation or "educated guesses" aren't acceptable. You can, however, provide fact-based conclusions and inferences that are based on training, education and experience.

Ask colleagues and others who aren't involved in your cases to proof your reports. They'll be reading them for the first time — hopefully without biases — just as judges in courtrooms will.

Crucial writing for your careers

Case participants will judge your fraud examinations by your report writing. Supervisors will promote fraud examiners who write well and will give them bigger cases and promotions.

Click here for tips and tricks from the ACFE's "Report Writing Manual."

Colin May, CFE, is a forensic financial investigator with a government agency (the views in "Starting Out" are his own) in Baltimore, Maryland. His email address is: colin.may.cfe@gmail.com.

ACFE "Report Writing Manual" tips and tricks

An excellent resource for new CFEs is the ACFE’s "Report Writing Manual," available from the ACFE Bookstore. The manual contains 65 pages of solid tips, recommendations and examples of fraud examination and expert witness report writing.

It also contains five appendices, which include a style guide, examples of engagement letters and three fraud examination reports.

Here are some samples of the great advice in this valuable resource:

• State things clearly and directly.
• Use precise language.
• Use the active voice.
• Use objective language.
• Avoid bias.
• Avoid broad unsupported statements.
• Don’t speculate or guess.
• Be professional.
• Remember your audience.
• Your report can wind up anywhere.