The majority of fraud examiners expect to see a significant uptick in fraud over the coming year, which means fraud interviews will be on the rise as well. In recognition of International Fraud Awareness Week, The Bonadio Group’s Tim Ball discusses best practices for conducting fraud interviews.
A survey by the Association of Certified Fraud Examiners conducted following the 2008 recession found that 80 percent of anti-fraud professionals said they believe fraud levels increase in times of economic distress. A more recent survey by the same organization found that 92 percent of fraud examiners expect to see further increase in the overall level of fraud during the next year. Therefore, more people than ever before may find themselves in the position of needing to conduct a fraud interview.
There are a lot of reasons why a fraud interview might be necessary – for example, during the risk assessment process of an audit or while investigating suspected fraud in one’s own business (or the client’s). Regardless of the application, the main purpose of a fraud interview is to gather information regarding suspected fraud.
The thought of sitting across from someone and asking if they committed fraud may seem like an unnerving task. It’s natural to wonder, “Do I have the right to ask these questions?” or “How do I know if they are being honest with me?”
Fraud interview questions and techniques are often learned and perfected by fraud examiners through years of fraud investigations. Each fraud examiner tends to develop their own style of interviewing, but there are some basic principles of a successful fraud interview that all professionals can follow. The following are some specific questions to help make any fraud interview you conduct more successful.
Every fraud interview should start as a simple conversation. The goal is to learn some background information while building rapport with the interviewee. After stating the purpose of the interview, start with questions regarding the interviewee’s background, including:
Once certain responsibilities of the interviewee have been established, ask for some detail on their tasks. Ask questions like:
Spending the time to learn about the interviewee and the responsibilities of their position will set a nice tone for the interview. Encouraging the interviewee to talk about themselves helps earn some trust and develop rapport. Through this line of questioning, information can be learned about their position within the company and exposure to other employees, processes and controls. This can be valuable to the current interview and other interviews conducted throughout the investigation.
Don’t Be Afraid to Double Check
One major shortcoming in inexperienced fraud interviewers is their reluctance to reconfirm statements, revisit subjects and ask for more examples. Often, interviewers don’t like to give the impression that they don’t understand or need a second explanation, but this step is crucial to a successful interview. Revisiting a subject multiple times and asking for more examples not only provides clarity, but can also identify inconsistencies in the interviewee’s statements. Interviewers should regularly go back through the details of a certain procedure or process that the interviewee has already explained, asking for more detail and examples, with questions like:
The least of an interviewer’s worries should be looking uninformed or foolish. Nothing should get in the way of gaining a full understanding of what the interviewee is explaining.
What are some common indicators that fraud has been committed?
There are a few reasons an interviewer might ask this question to a fraud analyst. First, it allows the interviewer to gauge the analysts knowledge of fraud indicators. Second, it allows the interviewer to see how the analyst would go about identifying potential fraud. Finally, it allows the interviewer to assess the analysts critical thinking skills.
Fraud analysts play an important role in organizations by helping to identify and prevent fraud. In order to be effective, analysts must be able to identify common indicators of fraud. This requires both knowledge of different types of fraud and critical thinking skills. By asking this question, the interviewer can get a better sense of the analysts abilities in these areas.
Example: “ There are many indicators that fraud has been committed, but some common ones include: -Unauthorized transactions or activity: This can be things like unauthorized withdrawals from accounts, charges on credit cards, or suspicious activity on financial statements. -Inadequate documentation: This can be things like missing receipts, invoices, or other documentation that would normally be expected. -Unusual patterns: This can be things like sudden changes in spending patterns, large or frequent transactions, or transactions that dont seem to make sense. -Changes in behavior: This can be things like suddenly becoming evasive or secretive, acting nervously or out of character, or exhibiting signs of stress. ”
Fraud analysts investigate fraud by looking for patterns of behavior that may indicate fraudulent activity. They use data analysis techniques to identify these patterns and then investigate the circumstances surrounding them to determine if fraud has occurred.
It is important for fraud analysts to be able to identify patterns of behavior that may indicate fraud because this can help them to prevent future instances of fraud from occurring. Additionally, by investigating potential instances of fraud, fraud analysts can help to protect the organizations they work for from financial losses.
Example: “ There are many ways to investigate fraud, but the most common method is to review financial records to look for discrepancies. This can be done by reviewing bank statements, credit card statements, and other financial documents. Additionally, investigators may interview witnesses or victims to gather information about the fraud. ”
How do you keep up with new methods of fraud?
Fraud analysts need to keep up with new methods of fraud in order to be able to identify and prevent it. Fraudsters are always finding new ways to commit fraud, so it is important for fraud analysts to be up-to-date on the latest methods. This question allows the interviewer to gauge the candidates ability to stay current in the field.
Example: “ There are a few different ways to stay up-to-date on new methods of fraud. One way is to read articles or blog posts on the topic. Another way is to attend conferences or webinars that discuss fraud trends. Finally, you can also follow experts in the field on social media to get the latest information. ”