FACULTY : BUSINESS MANAGEMENT SCIENCES AND ECONOMICS
DEPARTMENT : FINANCE AND ACCOUNTING
PROGRAMME : ACCOUNTING AND FINANCE (HACCN)
MODULE NAME : FORENSIC ACCOUNTING
MODULE CODE : ARMGT403
FACILITATOR : MR G.J GUTU
GROUP 10 MEMBERS
SURNAME NAME REG NUMBER
CHARI TINASHE R226379N
CHIKANDA DAVISON T R222590P
CHIKUNI PANASHE R222605U
CHIMBENDE NICOLE T R226138K
CHIMINYA YVETTE A R222736J
CHIWIRA ERIS A R226187R
FUNGATO PROUD R226127L
KASU LEARNMORE S R222755V
MAFUMHE NYASHA R216366F
MBIRIRI PAIDAMOYO F R226047N
MUNDODZI JOYLYNE R226116R
MUSUVA PRECIOUS K R226186S
MUTUVIRA NAPHATALI R227852S
NYAMUDEZA PRAISE R226153E
TICHARWA CONSTANCIA P R222641X
ZVIRAWA NICOLE NYARAI R226111H
MASAMVU KENNETH R225886B
SAIDI BRENDON R227918U
MUGUTI RONALD R222632F
ASSIGNMENT QUESTIONS
GROUP 10
FRAUD EVIDENCE EVALUATION
a) Techniques for evaluating audit evidence.
b) Interview and Interrogation Methods-raid technique.
SOLUTIONS
QUESTION: Techniques for Evaluating Audit Evidence
INTRODUCTION FOR THE KEY TERMS
FRAUD EVIDENCE
Fraud evidence is information, documents, testimony or other material collected during a fraud
investigation or forensic accounting engagement that demonstrate whether fraud has occurred,
how it was committed, its quantifiable consequences, and by whom (Tekavcic et al., 2021;
Binns, 2021).
Fraud evidence evaluation is the systematic process in fraud auditing or forensic accounting by
which gathered evidence is assessed for qualities such as relevance, reliability, sufficiency,
authenticity, and legal admissibility, in order to determine whether it supports or refutes
allegations of fraud (Sanchez-Aguayo et al., 2021). It is of paramount importance for the forensic
accountant to take as much time as possible to do audit evidence evaluation to ensure that they
have quality, sufficient and appropriate audit evidence (ISA 500).
In practice, fraud evidence evaluation involves reviewing various types of evidence such as
financial records, emails, witness statements, audit trails, and digital data to identify
inconsistencies, patterns, or direct proof of deceptive behaviour. Investigators assess the
authenticity and source of the evidence, its completeness, and whether it can withstand scrutiny
in a legal or organizational context. The goal is to establish a clear objective understanding of
what happened, who was involved, and the extent of the fraud.
Effective fraud evidence evaluation requires attention to detail, professional scepticism, and
often collaboration with legal experts, auditors, and IT specialists to interpret complex data
accurately. Ultimately, this evaluation ensures that decisions regarding fraud allegations are well-
founded, defensible, and contribute to the pursuit of justice or organizational accountability.
TECHNIQUES FOR EVALUATING AUDIT EVIDENCE
Inspection
Initially, Inspection can be taken as the first techniques used to evaluate audit evidence.
Inspection or Physical examination can be defined as a process of examining or count by the
auditor of a tangible asset or examining records or documents in paper or electronic form to
confirm existence, ownership, rights, or authenticity (Florea, R. and Florea, R., 2011).
This technique enables the forensic accountants to have relevant and reliable audit evidence
which have been properly evaluated and facts have been gathered for example on the existence
of a fixed assets by means of documentary evidence such as invoices and receipts and the
physical examination of the assets itself.
Observation
Adding on, there is also observation as a technique to evaluate audit evidence. Observation refers
to watching a process or procedure performed by others to gather evidence about how it is
executed or performed as propounded by (Yin, X., 2020). Surely observation plays a pivotal role
in ensuring the quality of audit evidence to the investigative accountant as they can easily
identify any deficiencies in the system at any given firm or business.
However, this technique can have a limitation in such a way that management can pretend to
follow a certain process in the presence of investigative accountant or auditors whilst in their
absence they have other processing systems which are questionable.
Inquiry
Furthermore, a forensic accountant can make use of Inquiry. Inquiry involves seeking
information from knowledgeable persons, both inside and outside the entity, ranging from formal
written enquiries to informal discussions (Calota G. and Vinatoru S.S., 2015). Indeed, asking
management why certain things has changed for example expenses increased significantly
compared to the prior year is there any reason can assist the Forensic accountant to have a clear
understanding of the operations as well as validating the audit evidence that he/she has.
External Confirmation
Moreso, external confirmation is another critical technique used to evaluate audit evidence by
most of the forensic accountants to verify financial information. It can be defined as a process of
obtaining a confirmation directly from a third party, such as a bank or debtor either in written
form or not as clearly suggested by (Ping Zeng, Ge Ren, and Xi Zhong, 2014). Unquestionably,
External confirmations are highly reliable because they come from independent sources for
example bank statements of the firms.
Recalculation
Recalculation is defined as a process checking the mathematical accuracy of documents or
records for instance depreciation recalculation to see if what is recorded is what exactly should
have been recorded and there is no any deviation (Davies M and Aston J,2010). Recalculations
turns to ascertain the correctness and acts as proof that the rightful and correct procedures were
well taken to ensure accuracy and thus improving the quality of financial information obtained as
audit evidence.
Analytical procedures
Another method that can be used to evaluate audit evidence is analytical procedure. This
involves evaluating financial information through analysis of plausible relationships among both
financial and non-financial information. It consists of the analysis of significant ratios and trends,
including the resulting investigation of fluctuations and relationships that are inconsistent with
other relevant information or that deviate from predicted amounts. For example, comparing the
current ratio for the year under audit, to the prior year current ratio, and seeking an explanation if
there is a difference, fluctuations or inconsistencies.
Re-performance
Re-performance is another method that can be used in evaluating audit evidence. Re-
performance involves the auditor’s independent execution of procedures or controls originally
performed as part of the entity’s internal control, for example, re-performing the year-end bank
reconciliation. The auditor evaluates the reliability of audit evidence by independently executing
a process or control that was originally performed by the client. This method allows the auditor
to verify the accuracy and effectiveness of internal controls or calculations by performing them
again and comparing the results. It provides strong and direct audit evidence because it is based
on the auditor's own work rather than relying solely on the client’s records or representations. It
is especially useful in detecting errors or inconsistencies in key financial processes.
Computer-Assisted Audit Techniques (CAATs)
In addition, the use of Computer-Assisted Audit Techniques (CAATs) have also come to be
another method that can be used in evaluating audit evidence. These are tools and software used
by auditors to examine and evaluate audit evidence efficiently, particularly when dealing with
large volumes of electronic data. Instead of relying solely on manual procedures, auditors use
CAATs to extract, analyze, and test financial information directly from accounting systems.
These techniques help auditors identify errors, anomalies, or suspicious transactions, perform
recalculations, and select representative samples with greater accuracy and speed. The use of
CAATs enables auditors to improve the effectiveness and reliability of their audit evidence
evaluations, especially in environments where data is predominantly digital.
Conclusively, the aforementioned Audit evaluation techniques have significantly played pivotal
roles in ensuring that the audit evidence is sufficient, appropriate, accurate, credible and legally
admissible in the court of law for use in litigation.
b. Interview and Interrogation Methods- REID technique
INTRODUCTION
Interview and interrogation methods are techniques used by law enforcement, investigators, and
professionals to gather information from individuals regarding specific events, incidents, or
behaviors. While both processes aim to elicit information, they differ significantly in their
approach and purpose. Interviews are generally more conversational and non-confrontational,
while interrogations are more direct and often involve pressure to obtain a confession or
admission.
Conducting effective interviewing can be can be one of the most evidence gathering techniques
in forensic accounting. Interviewing skill is one of the most important skills of forensic
accountants. Infect it is one of the most particularly employed technique used in fraud
examination. While documents provide facts, they cannot be questioned and sometimes they do
not provide array of evidence that interviews provide. Verbal and nonverbal cues observed
during interviews can provide an interactive give and take that can provide additional evidence,
lead to the identity of the perpetrator and yield one of the most useful direct pieces of evidence,
the confession. Even in the absence of a confession, credible information obtained from
interviews coupled with documentary evidence can cause the judge or jury to convict a suspect
based on circumstantial evidence alone.
Interviewing methods
1.Cognitive Interviewing.
Cognitive interviewing is a psychological technique designed to enhance a person’s ability to
recall detailed information about an event. It involves helping the interviewee mentally recreate
the context in which the event occurred, such as the physical setting, emotions felt, and sequence
of events. In forensic accounting, cognitive interviewing is particularly useful when working
with witnesses or victims who may need to recall complex timelines or specific transactions.
However, this method is time-consuming and requires special training to implement correctly. It
is most effective when the goal is to retrieve accurate memories rather than test the interviewee’s
integrity or truthfulness.
2.Structured Interviewing
Structured interviews involve a predetermined set of questions that are asked in a specific order.
These interviews are carefully designed to gather consistent information across multiple subjects,
making them especially useful when interviewing several people about the same topic or event.
In forensic accounting, structured interviews are often used during the early stages of an
investigation or in routine fraud risk assessments. The primary advantage of this method is the
ease of comparison across different interviewees' responses, which can help identify
inconsistencies or patterns.
However, the rigid nature of structured interviews can limit the interviewer's ability to explore
unexpected leads or allow the interviewee to elaborate on important points not covered by the
script.
3.Unstructured Interviewing
Unstructured interviews are informal and conversational, with no fixed set of questions. The
interviewer may have a general idea of the topics to cover but allows the conversation to flow
naturally. This approach is particularly useful in forensic accounting when the interviewer is
trying to build rapport or gather broad, exploratory information. Unstructured interviews can
uncover insights that a structured format might miss, especially when dealing with subjects who
are nervous or hesitant.
However, this method requires a high level of skill and experience, as the interviewer must steer
the conversation effectively without losing focus. Additionally, the data collected may be harder
to analyze systematically due to its open-ended nature.
4.Behavioral Analysis Interview (BAI)
The Behavioral Analysis Interview (BAI) is a structured, non-accusatory interview technique
designed to identify deception and evaluate truthfulness based on both verbal and non-verbal
behavior. It is most commonly used in the pre-interrogation phase of an investigation. Unlike
direct or confrontational methods (like the Reid Technique), BAI focuses on observing
behavioral cues and responses to carefully crafted questions to determine whether further
interrogation is warranted.
Interrogation methods
1.The Reid Technique
It was named after John E. Reid, a former Chicago Police officer and polygraph expert who
developed this method in the 1940s. The Reid Technique is a highly structured and systematic
method of interrogation that combines both psychological strategies and behavioral cues to
obtain a confession. It is composed of nine steps, starting with a direct confrontation and
progressing through tactics such as minimizing the moral seriousness of the offense,
discouraging denials, and offering the suspect alternative justifications for their actions.
The technique is designed to gradually break down a suspect’s resistance, especially by
suggesting that confessing will lead to understanding or leniency. In forensic accounting, it may
be used in criminal fraud cases involving law enforcement or legal counsel. While effective in
certain contexts, the Reid Technique is also highly controversial due to its potential to produce
false confessions particularly when applied to vulnerable or innocent individuals. It’s use is
generally discouraged in internal or civil investigations, especially without legal oversight.
2.Direct Accusation Method.
The direct accusation method is a bold and confrontational interrogation approach used when the
investigator possesses strong evidence of the subject’s involvement in fraud. Rather than
building up to an accusation, the interrogator opens by directly stating that the person is believed
to be guilty. This approach is typically reserved for the final stages of an investigation when the
case against the suspect is well-established. The primary aim is to force a reaction either a denial,
a partial admission, or a full confession. This method can be very effective when the suspect
feels there is no room to escape the facts. However, it also carries significant risks. Because of its
aggressive nature, it can shut down communication, provoke hostility, or lead to defensive
behavior. It must be used carefully, with consideration for ethical boundaries and potential legal
implications.
3.Rapport-Based Interrogation
Rapport-based interrogation is a method that emphasizes building trust, respect, and a non-
threatening environment to encourage the suspect to speak freely. This approach works best
when a relationship has already been developed during earlier interviews, and the suspect does
not feel immediately under attack. The interrogator engages the subject in open dialogue, listens
actively, and appeals to shared values or the suspect’s self-image. For example, they may begin
by acknowledging the individual’s long tenure or contributions to the organization before
addressing the suspicious activity.
This method is highly ethical and often successful in cases involving internal investigations,
particularly with employees who feel guilt or personal conflict. However, it is less effective with
uncooperative individuals or those who are practiced in deception. It also requires time, patience,
and emotional intelligence on the part of the interviewer.
4.Factual or Evidence Based Approach
The factual or evidence-based interrogation method relies on confronting the subject with clear,
objective evidence gathered during the forensic investigation. This method avoids emotional
tactics or direct accusations and instead uses logic and documentation to challenge the suspect.
The interrogator may present financial records, audit findings, or electronic evidence that
contradict the suspect’s earlier statements or clearly implicate them in fraudulent activity. This
approach is especially effective when the evidence is strong and the suspect is analytical or
detail-oriented. However, it requires meticulous preparation, and if the evidence is incomplete or
misinterpreted, it may allow the suspect to deflect or question its validity.
Conclusion
In forensic accounting, both interviewing and interrogation play vital roles in uncovering the
truth behind financial irregularities, fraud, and misconduct. Interviewing methods such as
structured, unstructured, cognitive and behavioral analysis are primarily used to gather
information, assess credibility, and build rapport with witnesses or potential suspects in a non-
accusatory manner. These approaches help forensic accountants develop a clear understanding of
events while maintaining professionalism and ethical standards. In contrast, interrogation
methods such as the direct accusation method, Reid Technique, evidence-based questioning,
rapport-based interrogation, and direct accusation are employed when the investigator reasonably
believes the individual may be guilty. These techniques aim to obtain admissions or confessions,
often using psychological pressure, logic, or emotional leverage.
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319-70488-3_24
2.Calota, G. and Vinatoru, S.S., 2015. TECHNIQUES AND PROCEDURES TO OBTAIN
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3.Crumbley, D.L., 2009. So, what is forensic accounting. The ABO Reporter, 9, pp.21-26.
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