Interviewing Techniques for Auditors: Eliciting Information

Preparing for the Unexpected

®2013 Association of Certified Fraud Examiners, Inc. 1 of 14 ®2015 Association of Certified Fraud Examiners, Inc. Introduction

. Investigations into employee misconduct often involve difficult and complex issues of law. . Use of interview techniques might be restricted by: • Federal and state laws • Organizational policies

®2015 Association of Certified Fraud Examiners, Inc. 2 of 14 Legal Authority to Conduct Interviews

. Constitutional privileges • A citizen has the authority to conduct an inquiry into virtually any subject area, as long as the rights of individuals are not transgressed in the process.

®2015 Association of Certified Fraud Examiners, Inc. 3 of 14 Employee’s Duty to Cooperate

. A duty to cooperate exists in every employer- employee relationship. . Employees have a duty to cooperate during an internal investigation, as long as what is requested from them is reasonable. • An interview is considered reasonable if it addresses matters within the scope of the employee’s actions or duties.

®2015 Association of Certified Fraud Examiners, Inc. 4 of 14 Employee’s Rights During the Investigation

. Contractual rights • Union contracts or collective-bargaining agreements • Written employment agreements containing employee-rights provisions . Whistleblowers • Federal and some state laws offer protection

®2015 Association of Certified Fraud Examiners, Inc. 5 of 14 Employee’s Rights During the Investigation

. Employee’s Constitutional rights • Fourth, Fifth, and Sixth Amendments . Employee’s right against self-incrimination • May assert right against self-incrimination during an investigation by either a public or private entity • May be subject to dismissal by a private company if he fails to cooperate in an investigation

®2015 Association of Certified Fraud Examiners, Inc. 6 of 14 Miranda Warnings

. Private and public employers may interview employees in noncustodial settings without giving Miranda warnings, unless reporting to law enforcement or a state agency. • Custodial setting—questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom or action in any significant way. • Public employers—public entities cannot force employees to choose between their Fifth Amendment right to silence and their jobs.

®2015 Association of Certified Fraud Examiners, Inc. 7 of 14 Possible Tort Actions Arising from Interviews

. Generally there is no legal liability in asking questions. . Problems arise when interviewers make untrue statements during the interview process. . A tort (unlike a crime, which is an offense against the state) is a private or civil wrong committed against a party.

®2015 Association of Certified Fraud Examiners, Inc. 8 of 14 Defamation

. The statement must: • Be untrue in its material facts • Be published (or broadcast) to a third party or parties • Be made on an unprivileged occasion • Damage the reputation of the subject . Libel is the written form of defamation. . Slander is the spoken form of defamation.

®2015 Association of Certified Fraud Examiners, Inc. 9 of 14 Invasion of Privacy

. Two torts • Publicity of private facts • Unwarranted intrusion . A person commits the publicity tort if he: • Publicizes broadly • Private facts about another • That would be highly offensive to a reasonable person • About a matter in which the speaker does not have a legitimate interest

®2015 Association of Certified Fraud Examiners, Inc. 10 of 14 Invasion of Privacy

. Unwarranted intrusion involves the unreasonable, deliberate prying into private matters or the “seclusion” of another without a legitimate interest or authority. . Invasion of privacy can be avoided by having adequate predication (sufficient grounds) to conduct an interview.

®2015 Association of Certified Fraud Examiners, Inc. 11 of 14 False Imprisonment

. An intent to confine . An act resulting in confinement . Consciousness of confinement or resulting harm

®2015 Association of Certified Fraud Examiners, Inc. 12 of 14 Malicious Prosecution

. Instituting civil or criminal litigation against another . Without just cause . With malice (i.e., the intent to harm the victim) . The proceeding ends favorably to the victim.

®2015 Association of Certified Fraud Examiners, Inc. 13 of 14 Intentional Infliction of Emotional Distress

. Engaging in extreme and outrageous conduct that causes severe emotional distress . The offending conduct must “outrage the sensibilities of a reasonable man.”

®2015 Association of Certified Fraud Examiners, Inc. 14 of 14