Chapter 9: Physical, Documentary, and Observational Evidence Flashcards
Physical Evidence
- Physical Evidence is tangible
- Refers to a relative broad category of evidence that includes fingerprints and trace evidence.
- For example, physical evidence can include forged signatures on documents
- Physical evidence must not be contaminated
Documents and Records
-(including records in electronic format) are the most often used type of evidence in fraud investigations.
Use of Documents in Court
- Generally speaking, only original documents can be used as evidence in court. Exceptions exists in certain cases: copies may sometimes be used when originals are not available.
- Chain of custody must be maintained for documents to be used in court.
- Documents should be organized. One way to organize documents is to assign them Bates numbers.
Bates numbers
Use of Bates numbering involves assigning to each page a unique identifier that may be numeric, alpha, or numeric (a combination of letters and numbers). No standard method exists for identifying documents.
Sources of Documentary Evidence
Personnel files
Résumes
Current co-workers
Friends and acquaintances
Postemployment background checks
Sites other than the suspect’s home state
Social networking sites
Public records (real estate, court, assumed name indexes, UCC filings, motor vehicle data, commercial databases)
Restricted records (motor and dealer vehicle records, FINCEN, currency transaction reports, IRS Form 8300, tax returns, Social Security records, court filings, vital records)
Methods of Obtaining Restricted Records
Subpoenas & Search Warrants
Subpoenas
- Can compel delivery of physical evidence and depositions
- Are issued by officers of the court, including attorneys
Search Warrants
Generally issued only by a judge
Require probable cause
Are limited in scope
Are used to seize evidence as opposed to compel its delivery
Deposition
a record of a person’s answers posed by opposing counsel.
Link Analysis
Link analysis is a process that allows information in various databases and files to be evaluated and integrated in such a way that associations become apparent.
Application of Link Analysis to Document Evidence
- Various software programs are available for link analysis
- The analysis can be used to point to suspects, locate hidden assets, or point to areas or issues that require additional investigation.
Analytical Procedures
The analytical procedures do not confirm that fraud exists; rather they provide evidence of areas that are likely to contain fraud.
Five common types of analytical procedures:
- Comparison of financial data with prior period financial data.
- Comparison of financial data with industry data.
- Comparison of expected financial results with nonfinancial data.
- Comparison of financial data with results expected by the entity itself.
- Comparison of data with results expected by the forensic accountant (e.g., expected decline due to downturn in economy).
Additional Analytical Procedures
- Tracing and Vouching (following the audit trail forward and backwards)
- Surprise counts
- Statistical Sampling (can be used to both detecting fraud and to estimate a fraud loss)
- Reconciliations
- Confirmations
- Indirect methods (e.g., the net worth method)
Tracing
Source documents
Suspicious Documents
Examples of suspicious document symptoms:
- Signature appears to be contrived.
- Date on document is not consistent with other evidence.
- Paper does not seem to be the type usually used for the purpose.
- Document is a copy when original was expected.
- Erasures or a covering agent, such as a fluid correction cover-up, is present.
- If document is in electronic form, different styles or sizes of fonts were used.
- Document numbers appear to be out of sequence.
- Checks have second endorsements.
Why are documents questioned?
because their authorship or authenticity, or both, is in doubt.
Document examiners
specialize in analyzing questioned documents. They may consider things such as handwriting, printer output, and ink and paper used in documents.
Altered documents may have either deletions or insertions
Authorship Analysis
A sample of handwriting is compared to an exemplar.
- Exemplars should contain the same types of letters, numbers, and symbols that exist in the sample.
- Forensic stylists study the author’s choice of words, syntax, spelling, and phrasing.
Document examiners state they are certian?
Rarely. Instead, they will often state their findings in qualitative terms (e.g., the suspect is probably the person who wrote the letter).
Document examiners state they are certain?
Rarely. Instead, they will often state their findings in qualitative terms (e.g., the suspect is probably the person who wrote the letter).
Observation
use of the senses to assess the propriety of the behavior of persons and other activities such as business processes that have a tangible component.
What are the three types of observational evodence?
Three types of observational evidence: surveillance, invigilation, and co-worker testimony.
How convincing is observation evidence?
Very. It is often the most convincing and the easiest evidence for juries to understand.
What must a forensic account consider when selecting a gathering technique?
- The type of fraud believed to have been perpetrated;
- The fact that the fraud is or is not ongoing;
- The extent of the fraud;
- The extent to which the investigation can be kept secret;
- The condition of the financial records, other source documents, and physical evidence;
- The sophistication of the suspect and whether collusion exists;
- The cost of applying a given method;
- The psychological and organizational impact of applying the given method;
- The objectives of the investigation.
