Chapter 8: Collection Process

Question 1

Evidence

Answer 1

anything (tangible objects, documents, and testimony) that relates to the truth of falsiy of an assertion made in an investigation or legal proceeding.
Evidence provides answers to sleuth’s questions.

Question 2

Sleuth’s Questions

Answer 2

who, what, when, where, how, and why.

A fraud theory answers sleuth’s questions

Question 3

Complete court case

Answer 3

Typically includes a fraud theory, collected evidence, and expert testimony.

Question 4

Fraud Theory

Answer 4

paints a picture of a fraud

who, what, when, where, how, why?

Question 5

Fraud investigator’s role in collecting evidence

Answer 5

• Primary responsibility for collecting the basic evidence needed to build a possible case.
• Fraud investigator may provide expert opinion
• The investigator should never provide an opinion of guilt or innocence of any person or party.
• The attorney constructs a (possibly different) fraud theory to be used in court.

Question 6

The Evidence Gathering Process

Answer 6

The evidence gathering process involves 3 main steps: 1) review physical and document evidence, 2) observe, and 3) conduct interviews.

Question 7

Step 1: review physical and document evidence

Answer 7

reviewing the physical and document evidence provides a basis for know what to observe, and what questions to ask in interviews.

Question 8

Step 2: observe

Answer 8

observing can catch a fraudster in the act, which can result in substantially lower investigation costs.

Question 9

Step 3: conduct interviews

Answer 9

Interviewing should lead to a confession, if possible
The investigator should begin interviewing those furthest from the prime suspect and then work toward the suspect. If there is more than one suspect, the prime suspect should be saved for last.

Question 10

The Fraud Theory Approach to Fraud Investigation

Answer 10

a process that posits a hypothesis regarding a fraud scheme, tests the hypothesis with evidence, and then accepts, modifies, or discards the hypothesis as the evidence warrants.

Question 11

Fraud scheme

Answer 11

Scheme is a predefined set of answers to the questions “who, what, how, when, and where.”
The question “what” must be asked first—what fraud has occurred.

Question 12

Predication Principle

Answer 12

Requires discontinuing the investigation if no reasonable basis exists to continue to collect evidence. On the other hand, the investigator should follow the evidence if the evidence justifies continuing the investigation.

Question 13

Hypothesis Testing for a Fraud Theory

Answer 13

In fraud theory, a hypothesis test is an examination of a piece of evidence to decide whether it is consistent with a given fraud theory under consideration.

Question 14

Protocols for Investigating Fraud Schemes

Answer 14

• No generally accepted, published professional protocols exist for conducting investigations for each type of fraud scheme.
• In the absence of any pre-established protocols, the fraud investigator must establish protocols for each new investigation. The general rule in establishing such protocols is that each fraud scheme has its own “smoking gun” that represents not only evidence but also a weak point in a fraud scheme.