Based on documentation gathered, your internal audit fraud team has sufficient e

Question

Based on documentation gathered, your internal audit fraud team has sufficient evidence to prove that a warehouse manager for the company where you work has been stealing inventory. You have been assigned to lead the interview of the manager. How would you prepare for an interview at the company’s warehouse offices? Include how you would initially contact the warehouse manager for an interview. Also include in your discussion how you would prepare the interview room and how you would conduct yourself during the interview.

Explanation / Answer

INTERVIEW PREPARATION:

1. Background information

2. Time Lines, Flowcharts and Relationship Charts

3. Use a script?

4. Creating a record of the interview

5. Include a witness?

6. Reluctance on the part of the interviewee

• Time demands

• Fear or disapproval

• Etiquette

• Memory

• Repression

6. Denial of access to records

• My boss told me not to let anyone see this

• Privacy laws won’t allow access

• Overhead costs are trade secrets

• The contract is lump sum. You have no authority to see our costs

• I need to see your authority in writing

7. Written confirmation

8. Location and room arrangements

9. Remember: people lie, embellish, bend and shade the truth

INTERVIEW STRUCTURE

1. Limit questions to short focused statements. Deal with one question at a time

2. Proceed in a logical order – chronologically, transaction order, processing steps,

etc.

3. Move from general to specific (who, what, where, when, why, how)

4. Move from questions where the answer is known to those where the interviewer

does not know the answer

5. Proceed from non-sensitive to sensitive issues

6. Avoid loaded terms – investigation, embezzlement, theft, stole, wrong, etc.

7. Ask interviewee to give the basis of any conclusions or opinions stated

8. Plan the introduction of documents into the interview

9. Listen actively to both the answer given and any non-verbal statements

10. Force the interviewee to stay on track

11. Paraphrase the answers given to ensure that your understanding is correct.

For example, “Let me summarize what I think I heard you say…”

12. Avoid verbal or nonverbal reactions demonstrating your own judgment, anger,

disgust, disagreement or any similar emotions, unless intentionally done as part

of the interview plan

ACTION IDEAS – FRAUD BASED INTERVIEWS

SIGNS OF POSSIBLE DECEPTION

1. Establish a Baseline or “Behavioral Norm” – both Physical and Verbal

2. Ask background questions that result in truthful responses

3. Probe short and long term memory

4. Ask questions that require creative responses

5. Look for behaviors that do not make sense with the words spoken

6. Look for gross body movements, and analyze in relation to what was just said

NONVERBAL

Nonverbal behavior will either support and enhance the credibility of an answer,

or suggest discomfort and possible deception – indicating the need for followup

questions.

• Change in pattern of eye contact

• Increased breathing rate, perspiration, or swallowing

• Change in coloring or facial tone

• Posture becomes closed, stiff or otherwise defensive

• Movement away from the interviewer

• Reluctance to physically handle documents or other evidence presented

• Passive reaction to direct accusation

• Grooming Gestures and Physical Adjustments

" Rubbing or wringing of hands

" Picking at fingers, hands or nails

" Touching the nose, ears, mouth or hair

" Adjusting or cleaning glasses

" Picking lint from clothing and similar gestures

" Change in patterns of movement of feet

VERBAL

• Denial confined only to specific aspects of the issue

• Delayed, evasive, or vague answers

• Qualifies answers

• Uses reinforcements in answers

• Answers given in fragmented or incomplete sentences

• Mixture of unusually poor and exact memory

• Answers consistently lack detail

• Answers start with repeating the question

• Answers start with a request that the question be repeated

• Mental blocks exhibited: “The liar has to remember the lie.”

• Throat clearing or coughing

• Mumbling

• Swearing, oaths, or various religious statements

• Inappropriate laughter

• Passive or weak denial

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