Weekly Blog #11&12 - The Mock Trial

Q: The major preparation for trial by the expert witness is the expert report.  If the report is structured well, there is really no other preparation needed – just turn up to court on the day and answer the questions.

I strongly disagree with the above statement; I believe an expert witness must be more prepared than just having a well-structured report.  An expert witness is an expert who makes the knowledge and experience available to the court to help come to an understanding of the issues in a case and thereby reach a sound decision based on hard evidence (Dalton, 2010).  The expert witness must be prepared to the point where they know and understand the complete details in the report (Greene, 2002). According to Paul Vincent (2016), an expert witness must dedicate hours upon hours learning their investigation report thus giving them the best chance at being ready with any questions asked.  Being an expert witness is stressful, hard work and takes a lot of practice to master it.

In week 11, I was called upon to give expert witness on a given prosecution case in a mock trial.  Personally, I loved the experience and had a lot of fun.  I got to experience a little bit of life as an expert witness, although the barristers were able to make me crack, I still had great fun.  One of the major issues I learnt from my personal and classmates experience presenting was how important it is to have a carefully written investigation report and needing to understand every little detail.  Because we (students) did not write the report, the barristers were able to catch us off-guard unexpectedly and make us crumble under the pressure by pressuring specific words in the document.  Because of my personal lack of understanding of one particular graph in the report, I failed to convince the judge in believing my evidence was strong on the prosecution side.  I was advised how important it is to help the judge understand information when the time comes as it is the best way to get the judge on your side (Vincent, 2016).

Another common major problem students faced, me included, was overthinking the cross-examination questions. Overthinking the barristers questions, thinking where they are heading with their questions only made us hesitate and not taking the time to think and answer the questions properly. Vincent (2016) stated that this is a very common problem expert witnesses experience and takes a bit of practice to overcome.

If I was in a position giving advice to a forensic accountant expert witness before they appear in court, I would recommend;

• Have a sound knowledge of the subject matter is dispute, practical evidence of it.
• Learn, understand and prepare the investigation report. This way the expert witness will know all the details in the report thus being able to communicate findings and opinions clearly, confidently in which evidence is being given.
• Try to learn the ability to be ‘quick on your feet’ which becomes necessary when cross examinations ask unexpected questions.
• Focus on the question being asked and nothing else at the time.

Reference

Dalton, C. (2010). Acting as an expert witness in court. Irish Medical Times, 44(1), 18. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/227312041?accountid=13380

Greene, E., & Smith, A. (2002). The expert expert witness: More maxims and guidelines for the expert witness. Journal of Occupational and Organizational Psychology, 75, 125-127. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/199346692?accountid=13380

Vincent, P. (2016). AYB115: Governance, Fraud and Investigation. Week 11 Mock Trial.

Additional Information:

Quick and Easy Cross-Examination Tips:

https://www.youtube.com/watch?v=hQ0wiVM8ZTk

Mastering Cross Examination in the Court Room:
https://www.youtube.com/watch?v=yyn-ykG7GF8

What makes a good Forensic Accountant:
https://www.youtube.com/watch?v=WHLB6hJSvIs

Weekly Blog #10 - Expert Witness

Q: If 2 or more parties to a proceeding intend to call experts to give opinion evidence about a similar question, any of those parties may apply to the Court for one or more of the following orders:

a) that the experts confer, either before or after writing their expert reports;

b) that the experts produce to the court a document identifying where the opinions agree or differ;

c) that the experts evidence in chief be limited to the contents of the expert's expert report;

d) that all factual evidence relevant to any expert's opinions be adduced before the expert is called to give evidence;

Because experts are an exception whereby they are able to provide an opinion to the court, whereas other witnesses can only testify to assertions of facts within the witnesses own knowledge (Sanchez, 2012). As such, the courts use the rules to assist in ensuring that opposing expert opinions are based on the same underlying facts and used as a basis for clarification of complex issues rather than to try and sway the matter toward one particular argument.

The experts role is to assist the court without replacing its function (it is not the experts role to make the decision on the matter that court the is dealing with – rather it is the role of the expert to utilise their specialist knowledge or experience to provide insights to the court to assist the court in understanding complex issues) and in order to do that effectively, opposing experts must operate from the same set of facts (Murray, 2009).

Because opposing expert opinions may differ, the Federal Court sections assist in setting a uniform baseline for the facts on which the opinions are based (Murray, 2009).  The sections also allow for conferencing between the opposing experts (hot tubbing) to assist the court in understanding where the opinions agree and differ.  The court is then able to focus on the reasons behind the differences and take both into account in the final determination of the matter (Coenen, 2006).

My advice to a forensic accounting expert witness about to present is court is;

• Fully understanding the role of the expert, their duty to the court (which overrides all others) and the rules of the court to avoid having the expert evidence discarded.
• Stick to the evidence as contained in the expert report and do not try to answer the ultimate issue the court is addressing
• Ensure the expert testimony remains within the person’s sphere of knowledge – do not try to extend this outside the area of expertise.
• Be clear and not argumentative whilst giving evidence.

Reference

Coenen, T. L. (2006, Feb 23). Commentary: A winning strategy includes making the most of an expert witness. St.Charles County Business Record Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/342509595?accountid=13380

Murray, S. L. (2009). Being an expert witness. Professional Safety, 54(3), 20-23. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/200324595?accountid=13380

Sanchez, M. H., & Zhang, S. W. (2012). THE ROLE OF THE EXPERT WITNESS IN ACCOUNTING FRAUD CASES. Global Journal of Business Research, 6(1), 103-111. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/1270678871?accountid=13380

Additional Information

What is an Expert Witness:

https://www.youtube.com/watch?v=Wl92bHtrOvA

Requirements of an Expert Witness:
https://www.law.cornell.edu/rules/fre/rule_702

How to Qualify an Expert Witness:
https://www.youtube.com/watch?v=4DUnSQfAFkU

Weekly Blog #9 - Preventing Fraud and Risk Management

Q: CEO ANC Inc

“It has been argued that the ‘culture of an organisation plays a large part in incidences of fraud, bribery and corruption, yet companies continue to ignore this and focus more on internal control measures only.”

I strongly agree with the above statement, internal fraud, bribery and corruption is greatly reduced when upper management establishes a proper ethical code of conduct valving integrity and encouraging open and honest communication (Australian Standard, 2008).  According to KPMG, surveys were conducted to measure employee satisfaction shows employees happy with their company culture environment as less likely to commit fraud (KPMG, 2011).

Today in my current workplace I am very grateful of my boss and how he treats all his employees.  He puts his employees first and really cares about us all.  This helps his employees to be satisfied with the culture of our workplace thus creating a real positive environment.  Because of this, us employees respect our management and perform our duties to the best we can each day. I believe creating a positive culture in your business is a win-win situation.  I would have to say positive culture itself would not prevent fraud from occurring but referring back to KPMG it will significantly reduce the risk of fraud, corruption and bribery from happening.  I can only hope wherever I work next after my degree has a similar culture. 

Organisations sink or swim based on their internal culture.  If they fail to produce a positive environment, the organisation may experience; Fraud, loss of faith and loss of revenue (KPMG Forensic, 2014).

To minimise this and to develop a positive fraud awareness culture I would strongly advise:

• Establish fraud control plans.
• Educate staff in relation to fraud processes and make sure they adapt them regularly.
• Provide a means for reporting fraud, eg ways to report fraud anonymously.
• Actively investigate instances that are reported.

Reference

Australian National Audit Office and KPMG. (2011, March). Fraud Control in Australian Government Entities.  Retrieved from: http://www.anao.gov.au/~/media/Files/Better%20Practice%20Guides/Fraud_Control_BPG.pdf

Australian Standard. (2008). AS8001-2008 Fraud and Corruption Control.Retrieved from:

           http://www.saiglobal.com/PDFTemp/Previews/OSH/AS/AS8000/8000/8001-2008.pdf

KPMG Forensic. (2014). Fraud Risk Management: Developing a Strategy for Prevention, Detection and Response.  Retrieved from:https://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Documents/fraud-risk-management-strategy-prevention-detection-response-v2.pdf

Additional Information

Fraud Risk Management - KPMG:

www.kpmg.com/cn/en/issuesandinsights/.../fraud-risk-management-o-200610.pdf

Managing the Business Risk of Fraud - ACFE:
https://www.acfe.com/uploadedfiles/acfe_website/.../managing-business-risk.pdf

Fraud Prevention, Detection and Deterrence:
https://www.youtube.com/watch?v=r7DWQZZkzxA

Best Practices for the Deterrence and Detection of Fraud:
https://www.youtube.com/watch?v=_SfoI4Ot8K8

Weekly Blog #8 - Interview Techniques

Q: “I do not adhere to the approach taken by the interviewers of the defendant.  Strong evidence has been provided that the confession obtained from the defendant was under duress, particularly in relation to the time taken and the heavy handed interrogation of the defendant as witnessed in the video viewed in court this morning. Consequently, as the prosecution’s case relies heavily on the confession provided by the defendant, the case is dismissed.”

The purpose of conducting interviews in a forensic environment is to gather specific information and facts from the suspect (AICPA, 2012).  Interviewing is one of the most important roles forensic accountants perform (McGimsey, 2015).  They must be prepared for an interview by knowing the evidence and facts of their case as best they can, having the right questions ready to ask as well as being mentally ready are so crucial to get admission from a suspect as the interviewer only gets one chance (Black, 2014).

In my interviewing experience in the past I have been lucky in regards to skipping the interview process in jobs. However, coming to the end of my degree, I will be looking to apply for graduate positions. I am aware I will need to research the company, practice answering all questions that may be asked and prepare myself mentally in order to give me the best possible chance to get the job as I will most likely only get one opportunity.

I recommend no matter what technique the interviewer performs, they must always remain objective and open minded in the interview (AICPA, 2010).  I’d also personally recommend all interviewers to;

• Have an interview plan, know it well.
• Build a rapport with the suspect, as this is to develop a good feeling to instil a level of trust (Bennett & Hess, 2004).
• Commence interview with open ended questions with a view to commit to stay of relation to the allegation.

Alternatively, another approach is to use many other interviewing techniques available to get admissibly from the suspect. These include PEACE (fact-based/ ethical), REID (interrogation/accusatory) (House & Snook, 2008), and motivational (psychotherapeutic) models. (Van Akkeren, 2015).

There are also some ‘do nots’ in an interview, they are;

• Don’t conduct an interview without a plan.
• Don’t include personal opinions.
• Don’t promise or threaten the interviewee.

References

AICPA: Forensic and Valuation Services Section. (2012). Conducting Effective Interviews.  Retrieved from: http://www.aicpa.org/InterestAreas/ForensicAndValuation/Resources/PractAidsGuidance/DownloadableDocuments/10834-378_interview%20whiite%20paper-FINAL-v1.pdf

Bennett, W. & Hess, K.M. (2004). Rapport, Active Listening, and other Techniques in Criminal Investigation, (7th Ed.). Belmont, CA. Wadsworth/Thomson Learning. Ch7 pp.65.

Black, I.S. (2014). Preparation and So Much More: The Art of Investigative Interviewing(3th Ed.) (p. 19-27). doi:10.1016/B978-0-12-411577-4.00003-4 (ch.3).

McGimsey, C. L., C.P.A./C.F.F., & Whelan, D., C.P.A. (2015). Forensic interviews: Plan to succeed. Journal of Accountancy, 220(2), 34-38,40-42. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/1702884673?accountid=13380

House, C.H. and Snook, B. (2008). An Alternative interviewing method: All we are saying is give PEACE a chance.  Retrieved from: http://www.cbc.ca/thenational/includes/pdf/snook-2008.pdf

Van Akkeren. J. (2015). AYB115: Governance, Fraud and Investigation: Lecture 8 [slide 36].  Retrieved from:https://blackboard.qut.edu.au/webapps/blackboard/content/listContent.jsp?course_id=_116816_1&content_id=_5376704_1&mode=reset

Additional Information:

Forensics - Making a case. Interviewing suspects. Interrogation techniques (3 Parts):
https://www.youtube.com/watch?v=lNORT0s7YAY - Part 1
https://www.youtube.com/watch?v=FcmK4IqMDG0 - Part 2
https://www.youtube.com/watch?v=YdPXCFm9o6A - Part 3

Interview's do's and don'ts:
https://www.youtube.com/watch?v=S1ucmfPOBV8

Weekly Blog #7 - Identifying and Profiling Fraudsters 2016

Q: Differential Association theory helps to explain why fraud occurs by groups within an organisation. General Strain Theory explains why individuals turn to fraud, bribery and corruption. However, Cressey’s Fraud Triangle addresses both.

Yes, I believe the Fraud Triangle theory addresses both theories as they explain the pressures and rationalisations employees may experience before committing fraud, bribery or corruption (Dorminey, 2010).  However, I think Cressey’s triangle framework itself does not prevent fraud as everyone’s rationalisations are different thus cannot be explained.  Everyone commits fraud for different reasons and circumstances (Stewart, 2006).

In the past, I have been in a job where poor decision making resulted in employees left angry and frustrated.  The company lost lots of money resulting in employees getting a pay cut.  We all felt annoyed and unappreciated.  Applying the fraud triangle theory in my situation, it explains that employees in my position may start to commit fraud, bribery or corruption due to the pressure we may be feeling. Our rationalisation is we work hard and don't deserve a pay cut.  If the opportunity arises, the fraud is committed.

One of the reasons behind why unethical conduct is committed is due to poor management styles and employee treatments (Cezair, 2009).  Therefore my advice to anyone (managers in particular), who come into a new department to take over a long existing manager who created a positive working environment is to look at what they have done well and poorly.  The new manager must ensure the positive working environment continues.  If the new manager has a bad attitude or increases productivity without extra pay it could turn employees against the manager. 

Personal financial pressure and household debt are the two of the biggest reasons people commit fraud – pressures everyone experiences in their life (KPMG, 2013).  To limit their rationalisation, all employees must be respected and treated accordingly, thus setting a positive environment therefore increasing staff morals (KPMG, 2013).

References

Cezair, J. A. (2009). HOW INTERNAL AUDIT CAN BE EFFECTIVE IN COMBATING OCCUPATIONAL FRAUD. Internal Auditing, 24(3), 22-32. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/214389081?accountid=13380

Dorminey, J. W., Fleming, A. S., Kranacher, M., & Riley, R. A. Jr. (2010). Beyond the fraud triangle. The CPA Journal, 80(7), 17-23,3. Retrieved fromhttp://search.proquest.com/docview/637276283?accountid=13380

KPMG. (2013). A survey of fraud, bribery and corruption in Australia & New Zealand 2012.  Retrieved from: https://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Fraud-Survey/Documents/fraud-bribery-corruption-survey-2012v2.pdf

Stewart, J. (2006). White collar crime: Fraud, bribery and corruption - all alive and well? Credit Control, 27(4), 50-60. Retrieved from http://gateway.library.qut.edu.au/login?url=http://search.proquest.com/docview/208172593?accountid=13380

Additional Information:

How people rationalise Fraud:
https://www.youtube.com/watch?v=Tb6QX9Yy1GM

Real-time fraud prevention in a real time world:
https://www.youtube.com/watch?v=sMDg7ld1tZU

Merton's General Strain Theory:
https://www.youtube.com/watch?v=1fsTFx6xZ2M

Differential Association Theory & Social Conflict Theory:

https://www.youtube.com/watch?v=vtD9C1MbIqg