Final Exam

Question 1

Financial Statement Fraud

Answer 1

A type of fraud whereby an individual or individuals purposefully misreport financial information about an organization in order to mislead those who read it

Question 2

Overstatements

Answer 2

A type of financial statement fraud in which an individual exaggerated a company’s assets or revenues to meet certain objectives

To meet or exceed the earnings or revenue growth expectations of stock market analysts
To comply with loan covenants
To increase the amount of financing available from asset-based loans
To meet a lender’s criteria for granting/extending loan facilities
To meet corporate performance criteria set by the parent company
To meet personal performance criteria
To trigger performance-related compensation or earn-out payments
To support the stock price in anticipation of a merger, acquisition, or sale of personal stockholding
To show a pattern of growth to support a planned securities offering or sale of the business

Question 3

Understatements

Answer 3

Type of financial statement fraud in which an individual minimizes a company’s liabilities or expenses to meet certain objectives

Question 4

Generally Accepted Accounting Principles

Answer 4

Recognition and measurement concepts that have evolved over time and have been codified by the Financial Accounting Standards Board and its predecessor organizations. The standards serve to guide regular business practices and deter financial statement fraud.

Question 5

Comparability and consistency

Answer 5

Secondary qualitive characteristics that state that a company’s information must be presented with the same consistent method from year to year in order for it to be useful for analytical purposes in decision making

Question 6

Relevance and Reliability

Answer 6

Primary qualitative characteristics of financial reports as they relate to usefulness for decision making. Relevance t.hat certain implies that certain information will make a difference in arriving at a decision. Reliability means that the user can depend on the factual accuracy of the information

Question 7

Periodicity

Answer 7

A “time-period” assumption which deems that economic activity be divided into specific time intervals, such as monthly, quarterly, and annualy.

Question 8

Full Disclosure

Answer 8

A standard for financial reporting that states that an material deviation from generally accepted accounting principles must be explained to the reader of the financial information. Any potential adverse event must be disclosed in the financial statements.

Question 9

Who Commits Financial Statement Fraud?

Answer 9

Senior management
Mid- and lower-level employees
Organized criminals

Question 10

Financial Statement Fraud

Answer 10

Deliberate misstatements or omissions of amounts or disclosures of financial statements to deceive financial statement users, particularly investors and creditors.

Question 11

Defining Financial Statement Fraud

Answer 11

Falsification, alteration, or manipulation of material financial records, supporting documents, or business transactions
Material intentional omissions or misrepresentations of events, transactions, accounts, or other significant information from which financial statements are prepared
Deliberate misapplication of accounting principles, policies, and procedures used to measure, recognize, report, and disclose economic events and business transactions
Intentional omissions of disclosures, or presentation of inadequate disclosures, regarding accounting principles and policies and related financial amounts (Rezaee 2002)

Question 12

Costs of Financial Statement Fraud

Answer 12

In addition to the direct economic losses of fraud are
Legal costs; increased insurance costs; loss of productivity; adverse impacts on employees’ morale, customers’ goodwill, and suppliers’ trust; and negative stock market reactions
These costs are impossible to measure
Undermines the reliability, quality, transparency, and integrity of the financial reporting process
Jeopardizes the integrity and objectivity of the auditing profession, especially of auditors and auditing firms
Diminishes the confidence of the capital markets, as well as of market participants, in the reliability of financial information
Makes the capital markets less efficient
Adversely affects the nation’s economic growth and prosperity
Results in huge litigation costs
Destroys careers of individuals involved
Causes bankruptcy or substantial economic losses by the company engaged in financial statement fraud
Encourages regulatory intervention
Causes devastation in the normal operations and performance of alleged companies
Raises serious doubt about the efficacy of financial statement audits
Erodes public confidence and trust in the accounting and auditing profession

Question 13

Methods of Financial Statement Fraud

Answer 13

Fictitious revenues
Timing differences
Improper asset valuations
Concealed liabilities and expenses
Improper disclosures

Question 14

Fictitious Revenues

Answer 14

Recording of goods or services that did not occur
Fake or phantom customers
Legitimate customers
Sales with conditions
Pressures to boost revenues

Question 15

Red Flags – Fictitious Revenues

Answer 15

Rapid growth or unusual profitability, especially compared to that of other companies in the same industry
Recurring negative cash flows from operations or an inability to generate cash flows from operations while reporting earnings and earnings growth
Significant transactions with related parties or special purpose entities not in the ordinary course of business or where those entities are not audited or are audited by another firm
Significant, unusual, or highly complex transactions, especially those close to period-end that pose difficult “substance over form” questions
Unusual growth in the number of days’ sales in receivables
A significant volume of sales to entities whose substance and ownership are not known
An unusual surge in sales by a minority of units within a company, or of sales recorded by corporate headquarters

Question 16

Timing Differences

Answer 16

Recording revenue and/or expenses in improper periods
Shifting revenues or expenses between one period and the next, increasing or decreasing earnings as desired
Matching revenues with expenses
Premature revenue recognition
Long-term contracts
Channel stuffing
Recording expenses in the wrong period

Question 17

Red Flags – Timing Differences

Answer 17

Rapid growth or unusual profitability, especially compared to that of other companies in the same industry
Recurring negative cash flows from operations, or an inability to generate cash flows from operations, while reporting earnings and earnings growth
Significant, unusual, or highly complex transactions, especially those close to period-end that pose difficult “substance over form” questions
Unusual increase in gross margin or margin in excess of industry peers
Unusual growth in the number of days’ sales in receivables
Unusual decline in the number of days’ purchases in accounts payable

Question 18

Concealed Liabilities

Answer 18

Liability/expense omissions
Capitalized expenses
Failure to disclose warranty costs and liabilities

Question 19

Red Flags – Concealed Liabilities

Answer 19

Recurring negative cash flows from operations or an inability to generate cash flows from operations while reporting earnings and earnings growth
Assets, liabilities, revenues, or expenses based on significant estimates that involve subjective judgments or uncertainties that are difficult to corroborate
Nonfinancial management’s excessive participation in or preoccupation with the selection of accounting principles or the determination of significant estimates
Unusual increase in gross margin or margin in excess of industry peers
Allowances for sales returns, warranty claims, and so on that are shrinking in percentage terms or are otherwise out of line with industry peers
Unusual reduction in the number of days’ purchases in accounts payable
Reducing accounts payable while competitors are stretching out payments to vendors

Question 20

Improper Disclosures

Answer 20

Liability omissions
Subsequent events
Management fraud
Related-party transactions
Accounting changes

Question 21

Red Flags – Improper Disclosures

Answer 21

Domination of management by a single person or small group (in a non-owner managed business) without compensating controls
Ineffective board of directors or audit committee oversight over the financial reporting process and internal control
Ineffective communication, implementation, support, or enforcement of the entity’s values or ethical standards by management, or the communication of inappropriate values or ethical standards
Rapid growth or unusual profitability, especially compared to that of other companies in the same industry
Significant, unusual, or highly complex transactions, especially those close to period-end that pose difficult “substance over form” questions
Significant related-party transactions not in the ordinary course of business, or with related entities not audited or audited by another firm
Significant bank accounts, or subsidiary or branch operations, in tax haven jurisdictions for which there appears to be no clear business justification
Overly complex organizational structure involving unusual legal entities or managerial lines of authority
Known history of violations of securities laws or other laws and regulations; or claims against the entity, its senior management, or board members, alleging fraud or violations of laws and regulations
Recurring attempts by management to justify marginal or inappropriate accounting on the basis of materiality
Formal or informal restrictions on the auditor that inappropriately limit access to people or information or the ability to communicate effectively with the board of directors or audit committee

Question 22

Improper Asset Valuation

Answer 22

Inventory valuation
Accounts receivable
Business combinations
Fixed assets

Question 23

Red Flags – Improper Asset Valuation

Answer 23

Recurring negative cash flows from operations or an inability to generate cash flows from operations while reporting earnings and earnings growth
Significant declines in customer demand and increasing business failures in either the industry or overall economy
Assets, liabilities, revenues, or expenses based on significant estimates that involve subjective judgments or uncertainties that are difficult to corroborate
Nonfinancial management’s excessive participation in or preoccupation with the selection of accounting principles or the determination of significant estimates
Unusual increase in gross margin or margin in excess of industry peers
Unusual growth in the number of days’ sales in receivables
Unusual growth in the number of days’ purchases in inventory
Allowances for bad debts, excess and obsolete inventory, and so on that are shrinking in percentage terms or are otherwise out of line with industry peers
Unusual change in the relationship between fixed assets and depreciation
Adding to assets while competitors are reducing capital tied up in assets

Question 24

Vertical analysis

Answer 24

Analyzes relationships between items on an income statement, balance sheet, or statement of cash flows by expressing components as percentages

Question 25

Horizontal analysis

Answer 25

Analyzes the percentage change in individual financial statement items

Question 26

Ratio analysis

Answer 26

Measures the relationship between two different financial statement amounts

Question 27

Reduce Pressures to Commit Financial Statement Fraud

Answer 27

Establish effective board oversight of the “tone at the top” created by management
Avoid setting unachievable financial goals
Avoid applying excessive pressure on employees to achieve goals
Change goals if changed market conditions require it
Ensure compensation systems are fair and do not create incentive to commit fraud
Discourage excessive external expectations of future corporate performance
Remove operational obstacles blocking effective performance

Question 28

Reduce the Opportunity to Commit Financial Statement Fraud

Answer 28

Maintain accurate and complete internal accounting records
Carefully monitor the business transactions and interpersonal relationships of suppliers, buyers, purchasing agents, sales representatives, and others who participate in the transactions between financial units
Establish a physical security system to secure company assets, including finished goods, cash, capital equipment, tools, and other valuable items
Maintain accurate personnel records, including background checks on new employee.
Encourage strong supervisory and leadership relationships within groups to ensure enforcement of accounting procedures
Establish clear and uniform accounting procedures with no exception clauses

Question 29

Reduce Rationalization of Financial Statement Fraud

Answer 29

Promote strong values, based on integrity, throughout the organization
Have policies that clearly define prohibited behavior with respect to accounting and financial statement fraud
Provide regular training to all employees, communicating prohibited behavior
Have confidential advice and reporting mechanisms to communicate inappropriate behavior
Have senior executives communicate to employees that integrity takes priority and that goals must never be achieved through fraud
Ensure management practices what it preaches and sets an example by promoting honesty in the accounting area
Clearly communicate the consequences of violating the rules and the punishment for violators

Question 30

Capitalized Expenses

Answer 30

When expenditures are capitalized as assets and not expensed off during the current period, income will be overstated. As the assets are depreciated , income in subsequent periods will be understated.

Question 31

Related-Party Transactions

Answer 31

Transactions that occur when a company does business with another entity whose management or operating policies can be controlled or significantly influenced by the company or by some other party in common. There is nothing inherently wrong with related party transactions, so long as they are fully disclosed.

Question 32

Improper asset valuation

Answer 32

Generally accepted accounting principles require that most assets be recorded at their historical cost with some exceptions. This type of fraud usually involves the fraudulent overstatement of inventory or receivables or the misclassification of fixed assets

Question 33

Occupational Fraud

Answer 33

The use of one’s occupation for personal enrichment through the deliberate missuse or missapplication of the organization’s resources or assets

Question 34

External Fraud

Answer 34

Unauthorized activity, theft, or fraud carried out by a third party outside the institution that is the subject of the fraudulent behavior

Question 35

Paperhanger

Answer 35

An expert in check fraud

Question 36

Credit Card Fraud

Answer 36

The missuse of a credit card to make purchases without authorization, or conducting a transaction using a counterfeit credit card

Question 37

Computer Hacking

Answer 37

The use of technology to gain unauthorized access to sensitive information on a computer system

Question 38

Password Carcking

Answer 38

An automated process by which an attacker attempts to guess the most likely passwords of a system user

Question 39

Social Engineering

Answer 39

The attacker deceives victims into disclosing personal information or convinces them to commit acts that facilitate the attackers intended use

Question 40

Phishing

Answer 40

A scam that occurs when a fraudster dupes victims into providing sensitive information by falsely claiming to be from an actual business, bank, vendor, or other entity with which the target does business. Phishers typically use emails to direct internet users to websites that look like legitimate e-commerce sites, such as online banks, retailers, or government agencies. Phishers actually control these sites and use them to steal sensitive information, such as bank account details and passwords.

Question 41

Data Manipulation

Answer 41

The use or manipulation of a computer to perpetrate a crime.

Question 42

Data desctruction

Answer 42

The unauthorized modification, suppression, or erasure of computer data or computer functions, with the intent to alter or hinder the normal functions of the targeted system.

Question 43

Malware

Answer 43

Any kind of malicious software, including viruses, worms, trojans, spyware, and botnets.

Question 44

Firewall

Answer 44

A software program that blocks unauthorized or unverified access to a computer system.

Question 45

Intrusion Detection System

Answer 45

A security method designed to detect malicious activity coming across the network or on a host.

Question 46

Espionage

Answer 46

Intelligence activity directed toward the acquisition or information through clandestine means and proscribed by the laws of the country against which it is committed.

Why do companies resort to corporate espionage?
Much information is already available in the public domain
Raw data is just the first step of the intelligence gathering process; data must be analyzed to be valuable
The most valuable information is confidential and safeguarded

Favorite targets of corporate spies include:
Research and development
Marketing
Manufacturing and production
Human resources

Spies obtain information by:
Posing as an employee or contract laborer
Surveillance
Sorting through discarded trash

Question 47

Preventing and Detecting Check Fraud

Answer 47

Check use is on the decline; the United States is the only country in the world that still uses a significant amount of personal checks
Educate employees on how to spot a fraudulent check
Request identification from patrons using checks
Adopt a no personal check policy

Question 48

Preventing and Detecting Credit Card Fraud

Answer 48

Educate employees responsible for processing customer payments
Ask for identification from all credit card users
Learn the red flags of customers using a fraudulent credit card
Customer purchases a large item and insists on taking it at the time
Customer becomes argumentative or appears to be rushed
Customer pulls card directly from pocket rather than from a wallet

Question 49

Preventing and Detecting Vendor Fraud

Answer 49

Vendor audits
Ensure integrity of contractors
Look for red flags of unscrupulous vendors
Contractor’s address, telephone number, or bank account info matches that of an employee
Contractor’s address is incomplete
Excessive number of change orders

Question 50

Preventing and Detecting Computer Fraud

Answer 50

Establish a formal security policy
Implement firewalls
Implement an intrusion detection system
Encrypt data
Terminate network connection after:
A certain number of unsuccessful login attempts
A period of inactivity
Security software

Question 51

Preventing and Detecting Corporate Espionage

Answer 51

Protecting physical data
Place sensitive documents in locked filing cabinets
Use a shredder for discarded sensitive material
Send and receive mail at a secure site and use a locked mailbox
Guard the physical premises
Lock and secure outdoor waste receptacles

Preventing espionage
Safeguard all materials bearing proprietary data
Do not allow these materials to be in plain view, even on company premises
All visitors must be verified and escorted while on company property
Employees must sign nondisclosure agreements

Question 52

Fraud Risk

Answer 52

The Vulnerability that an organization has to those capable of overcoming the three elements of the fraud triangle

Question 53

Why Be Concerned About Fraud Risk?

Answer 53

No organization is immune.
Awareness of weaknesses is one key to establishing mechanisms to reduce risk.
Risks can be internal or external.

Question 54

Factors That Influence Fraud Risk

Answer 54

Nature of the business
Operating environment
Effectiveness of internal controls
Ethics and values of the company and the people within it

Question 55

Preventative Controls

Answer 55

Manual or automated processes designed to stop an undesirable event from occurring

Question 56

Dectective Controls

Answer 56

Manual or automated processes designed to identify an undesirable event that has already occurred.

Question 57

Fraud risk assessment:

Answer 57

A process aimed at proactively identifying and addressing an organization’s vulnerabilities to internal and external fraud.

Objective—To help an organization recognize what makes it most vulnerable to fraud so that it can take proactive measures to reduce its exposure.

Question 58

Fraud Risk Assessment Framework

Answer 58

A tool used in performing, evaluating, and reporting the results of a fraud risk assessment that enables fraud risk to be analyzed and reported both qualitatively and quantitatively

Question 59

Why Should Organizations Conduct Fraud Risk Assessments?

Answer 59

Improve communication about and awareness of fraud
Identify what activities are the most vulnerable to fraud
Know who puts the organization at the greatest risk of fraud
Develop plans to mitigate fraud risk
Develop techniques to determine if fraud has occurred in high-risk areas

Assess internal controls:
Controls eliminated during restructuring
Controls eroded over time
Lack of controls in a vulnerable area
Nonperformance of control procedures
Inherent limitations of controls

Comply with regulations and professional standards:
PCAOB Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements

Question 60

What Makes a Good Fraud Risk Assessment?

Answer 60

Collaborative effort of management and auditors
The right sponsor
Independence and objectivity of the people leading and conducting the work
A good working knowledge of the business
Access to people at all levels of the organization
Engendered trust
The ability to think the unthinkable
A plan to keep it alive and relevant

Question 61

Considerations for Developing an Effective Fraud Risk Assessment

Answer 61

Packaging it right
Tailor the communication approach to the organization.
Be mindful of terminology used.

One size does not fit all
Adapt the framework to the business model, culture, and language of the organization.

Keeping it simple
Focus on areas that are most at risk for fraud.

Question 62

Preparing the Company for the Fraud Risk Assessment

Answer 62

Assembling the right team
Accounting and finance personnel
Personnel who have knowledge of day-to-day operations
Risk management personnel
General counsel or other members of the legal department
Members of ethics or compliance functions
Internal auditors
External consultants with fraud and risk expertise

Determining the best techniques to use
Interviews
Focus groups
Surveys
Anonymous feedback mechanisms

Obtaining the sponsor’s agreement on the work to be performed
Scope
Methods
Participants
Form of output

Educating the organization and openly promoting the process

Question 63

Executing the Fraud Risk Assessment (long)

Answer 63

Identifying potential inherent fraud risks

-Incentives, pressures, and opportunities to commit fraud
Position
Incentives
Performance pressures
Weak internal controls
Highly complex business transactions
Collusion opportunities

-Risk of management’s override of controls
Management knows the controls and standard operating procedures in place to prevent fraud
Knowledge of controls can be used to conceal fraud

-Population of fraud risks
Fraudulent financial reporting
Asset misappropriation
Collusion opportunities

-Regulatory and legal misconduct

-Reputation risk

-Risk to information technology

Assessing the likelihood of occurrence of identified fraud risks
Past instances of a particular fraud
Prevalence of fraud in the industry
Internal control environment
Available resources
Support of management
Ethical standards
Transaction volume
Complexity of the fraud risk
Unexplained losses
Complaints by customers or vendors

Assessing the significance of the fraud risks to the organization
Financial statement and monetary significance
Financial condition of the organization
Value of the threatened assets
Criticality of the threatened assets
Revenue generated by the threatened assets
Significance to the organization’s operations, brand value, and reputation
Criminal, civil, and regulatory liabilities

Evaluating which people and departments are most likely to commit fraud and identifying the methods they are likely to use
Identifying and mapping existing preventive and detective controls to the relevant fraud
Preventive controls
Detective controls

Evaluating whether the identified controls are operating effectively and efficiently
Review accounting policies and procedures.
Consider risk of management’s override of controls.
Interview management and employees.
Observe control activities.
Perform sample testing of controls compliance.
Review previous audit reports.
Review previous reports on fraud incidents, shrinkage, and unexplained shortages.

Identifying and evaluating residual fraud risks resulting from ineffective or nonexistent controls
Lack of appropriate prevention and detection controls
Noncompliance with established prevention and control measures

Question 64

Executing the Fraud Risk Assessment (short)

Answer 64

Identifying potential inherent fraud risks

Assessing the likelihood of occurrence of identified fraud risks

Assessing the significance of the fraud risks to the organization

Evaluating which people and departments are most likely to commit fraud and identifying the methods they are likely to use

Identifying and mapping existing preventive and detective controls to the relevant fraud

Evaluating whether the identified controls are operating effectively and efficiently

Identifying and evaluating residual fraud risks resulting from ineffective or nonexistent controls

Question 65

Addressing the Identified Fraud Risks

Answer 65

Establishing an acceptable level of risk

Responding to residual fraud risks
Avoid the risk
Transfer the risk
Mitigate the risk
Assume the risk
Combination approach

Question 66

Inherent Fraud Risks

Answer 66

Fraud risks that a company faces in the absence of any attempts, such as internal controls, to mitigate them.

Question 67

Residual Fraud Risks

Answer 67

Fraud risks that remain after attempts to mitigate them, usually as a result of ineffective or nonexistent controls.

Question 68

Interviewing Questions

Answer 68

Introductory
Informational
Assessment
Closing
Admission-seeking

Question 69

Introductory Questions

Answer 69

Provides an introduction
Establishes rapport
Establishes the theme of the interviews
Observes the person’s reactions

Question 70

General Rules for Introductory Questions

Answer 70

Don’t more than one person at a time
Conduct interviews under conditions of privacy
Ask nonsensitive questions

Instead of: Use:
Investigation Inquiry
Audit Review
Interview Ask a few questions
Embezzlement Shortage or paperwork problems

Get a commitment for assistance
Make a transitional statement
Seek continuous agreement
Do not promise confidentiality
Negotiations
Discussing the source of allegations

Question 71

Informational Questions

Answer 71

Open questions
Closed questions
Leading questions
Question sequences

Question 72

Informational Question Techniques

Answer 72

Begin by asking questions that are not likely to cause the respondent to become defensive or hostile.
Ask the questions in a manner that will develop the facts in the order of their occurrence, or in some other systematic order.
Ask only one question at a time, and frame the question so that only one answer is required.
Ask straightforward and frank questions; generally avoid shrewd approaches.
Keep interruptions to a minimum, and do not stop the subject’s narrative without good reason.
Give the respondent ample time to answer; do not rush the respondent.
Try to help the respondent remember, but do not suggest answers; be careful not to imply any particular answer by facial expressions, gestures, methods of asking questions, or types of questions asked.
Repeat or rephrase questions, if necessary, to get the desired facts.
Be sure you understand the answers, and if they are not perfectly clear, have the subject interpret them at that time instead of saving this for later.
Give the subject an opportunity to qualify his/her answers.
Separate facts from inferences.
Have the subject give comparisons by percentages, fractions, estimates of time and distance, and other such methods to ensure accuracy.
After the respondent has given a narrative account, ask follow-up questions about every key issue that has been discussed.
Upon conclusion of the direct questioning, ask the respondent to summarize the information given; then summarize the facts, and have the respondent verify that these conclusions are correct.

Question 73

Methodology Informational Phase

Answer 73

Begin with background questions
Observe verbal and nonverbal behavior
Ask nonleading (open) questions
Approach sensitive questions carefully

Question 74

Volatile Interviews

Answer 74

An interview that has the potential to bring about strong emotional reactions in the respondent
There should be two interviewers
Should be conducted on a surprise basis
The order of questions should be out of sequence
Use hypothetical questions

Question 75

Closing Questions

Answer 75

Reconfirming facts
Gathering additional facts
Concluding the interview

Question 76

Assessment Questions

Answer 76

Establishes the credibility of the respondent

Norming or calibrating
Process of observing behavior before critical questions are asked

Physiology of deception
People lie for one of two reasons: to receive rewards or to avoid punishment
The human body will attempt to relieve stress through verbal and nonverbal clues

Question 77

Verbal Clues to Deception

Answer 77

Overuse of respect
Increasingly weaker denials
Failure to deny
Avoidance of emotive words
Refusal to implicate other suspects
Tolerant attitudes
Reluctance to terminate interview
Feigned unconcern

Question 78

Nonverbal Clues

Answer 78

Full-body motions
Anatomical physical responses
Illustrators
Hands over the mouth
Manipulators
Fleeing positions
Crossing the arms
Reaction to evidence
Fake smiles

Question 79

Admission-Seeking Questions

Answer 79

Distinguish the innocent from the culpable
Obtain a valid confession
Obtain from the confessor a written statement acknowledging the facts
Presence of outsiders
Miranda warnings
Theme development
People will confess if they perceive that the benefits outweigh the penalties.
Offer a morally acceptable reason for the confessor’s behavior.
Convey absolute confidence in the premise of the admission you seek from the subject.

Question 80

Accusing an Innocent Person

Answer 80

The accuser has reasonable suspicion or predication to believe the accused has committed an offense.
The accusation is made under conditions of privacy.
The accuser does not take any action likely to make an innocent person confess.
The accusation is conducted under reasonable conditions.

Question 81

Steps in the Admission-Seeking Interview

Answer 81

Direct accusation

Observe reaction

Repeat accusation

Interrupt denials
Delays
Interruptions
Reasoning

Establish rationalization
Unfair treatment
Inadequate recognition
Financial problems
Aberration of conduct
Family problems
Accuser’s actions
Stress, drugs, alcohol
Revenge
Depersonalizing the victim
Minor moral infraction
Altruism
Genuine need

Diffuse alibis
Display physical evidence
Discuss witnesses
Discuss deceptions
Present alternative

Benchmark admission
Reinforce rationalization

Verbal confession
That the accused knew the conduct was wrong
Facts known only to the perpetrator
An estimate of the number of instances or amounts
A motive for the offense
When the misconduct began
That the accused knew the conduct was wrong
Facts known only to the perpetrator
An estimate of the number of instances or amounts
A motive for the offense
When the misconduct began
When/if the misconduct was terminated
Others involved
Physical evidence
Disposition of proceeds
Location of assets
Specifics of each offense

Question 82

Norming or calibrating

Answer 82

The process of observing behavior before critical questions are asked, with the purpose of helping to assess the subjects verbal and nonverbal reactions to threatening questions

Question 83

Oaths

Answer 83

Certain phrases used frequently by liars to add weight to their false testimony. Honestly, Frankly, to tell the truth, I swear to god

Question 84

Character testimony

Answer 84

An attempt by a witness to add credibility to a lie by requesting that you check with my minister or ask my wife

Question 85

Illustrators

Answer 85

Motions made, primarily by the hands, to demonstrate points when talking. The use of illustrators is usually altered during deception

Question 86

Anatomical Physical responses

Answer 86

The body’s involuntary reactions for fright; they include increased heart rate, shallow or labored breathing, and excessive perspiration. These reactions are typical of dishonesty

Question 87

Manipulators

Answer 87

Motions made by individuals such as picking lint from clothing, playing with objects, or holding ones hand while talking. Manipulators are displacement activities, way or reducing nervousness

Question 88

Fleeing position

Answer 88

A posture adopted by an individual under stress during an interview. The head is facing the interviewer, while the feet and legs ae pointed toward the door in an unconscious effort to flee the interview

Question 89

Benchmark admission

Answer 89

A small admission made to wrongdoing that signals a subjects willingness to confess.

Question 90

Excuse Clause

Answer 90

a clause inserted in a signed statement that encourages the confessor to sign the statement. It offers a moral not legal excuse for the wrongdoing.