Five BASIC Steps to the Truth (Part 2 of 2)

At the recent American Institute of Certified Public Accountants (AICPA) Not-for-Profit-Industry Conference in Washington, D.C., Nancy Young, of accounting firm Moss Adams, gave a presentation on “Fraud: Spotting the Liar” which discussed steps for obtaining the truth from an untruthful suspect who may be perpetrating a fraud.

In Part 1 of this blog series, we discussed the nine clues to spot a liar that Young shared with us.  Now we will explore Young’s Five BASIC steps to the truth, also shared during her presentation.  As opposed to “Nine clues to deceit” that rely on an individual’s expressions and body language, five steps to the truth can be used by an interrogator to divulge the truth when speaking to a suspect believed to have committed a fraudulent act.

The 5 BASIC steps to the truth are:

  • Baseline Behavior – When sitting down with a suspect whom during an inquiry about a possible fraud, you want to get a feeling for their normal mannerisms and speech before you ask probing questions related to the possible fraud.  You should start with basic questions such as “How long have you been with the organization?” or “What are your duties within the organization?  While asking these questions, observe the suspect’s body language and speech pattern and compare to the suspect’s reaction when asking more probing questions.  These questions can also help put the suspect at ease and help give you a feel for their baseline behavior.
  • Ask Open-Ended Questions – You want to go into the discussion asking questions that help you get to the truth.  You don’t want to receive one word responses to your questions.  Open-ended  questioning engages people to tell their story through a conversation. You are more likely to find out what you want to know rather than receiving “yes and no” responses.
  • Study the Clusters – During a conversation, watch the suspect’s facial, behavioral, and verbal clues.  Also look for when there are inconsistencies between verbal and nonverbal behavior, the nonverbal is generally the more accurate.
  • Intuit the Gaps – Young recommends being aware of gaps in the suspect’s statements, logic, behavior, and emotion.  It may be helpful to have two people conduct an interrogation so that one person can monitor gaps in the suspect’s statements and logic and the other can look for gaps in the suspect’s behavior and emotion.
  • Confirm – A suspect’s story should be validated and revalidated.  This can be done by asking the same fact seeking question repeatedly but differently.  Young recommends having the suspect repeat details of their actions backwards to see if they line up with their first report of their story.

It is important to note these “Nine clues to deceit” and ”Five BASIC steps to the truth” are not only useful when trying to detect fraud in the workplace, but they can also be useful at home when trying to  figure out if your kids did their homework.

Brian Collins is an Audit Manager with over 10 years of public accounting experience. He performs audit, review, compilation, and tax services for a wide range of clients in various industries, including not-for-profits and automotive dealerships.

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