Non-Financial Evidences (Behavorial aspects) are gaining importance in Fraud examination. One can detect lies by analyzing body language, eye language or other behavioral symptoms. Lot of research is being made in this field.

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NON-FINANCIAL EVIDENCES
(BEHAVORIAL ASPECTS) IN A FRAUD
EXAMINATION
Submitted by:
CA Pallavi Vyas
(M Com., FCA, ISA(ICAI))
M. No. 413419
74th
Batch of Forensic Accounting &
Fraud Detection, ICAI, Kota (Rajasthan)
Email- pallavi.vyas27@gmail.com
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Contents
INTRODUCTION .................................................................................................................3
TECHNIQUES & TOOLS.....................................................................................................3
Interviews3
Statement Analysis3
SCAN (Scientific Content Analysis3
Body Language3
Eye Language3
Micro Expressions3
INTERVIEWS.......................................................................................................................3
STATEMENT ANALYSIS ....................................................................................................4
Common Red Flags ................................................................................................................4
SCAN (Scientific Content Analysis) ......................................................................................5
BODY LANGUAGE ..............................................................................................................5
Body Language of Lies ...........................................................................................................5
Emotional Gestures & Contradiction......................................................................................5
Interactions and Reactions .....................................................................................................6
Verbal Context and Content....................................................................................................6
Other signs of a Lie................................................................................................................6
EYE LANGUAGE.................................................................................................................7
Visual Accessing Cues - "Lying Eyes".....................................................................................7
Other eye language cues.........................................................................................................9
MICRO EXPRESSIONS.......................................................................................................9
CONCLUSION....................................................................................................................10
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INTRODUCTION
Evidence in Fraud can potentially come from a variety of sources both Financial &Non-
Financial. Generally speaking, the focus on Fraud Investigation tends to be mostly, if not solely,
Financial. Fraud Investigators and auditors should consider the possibility of valuable evidence
that is non-financial.
Non-Financial sources include interviews, document examination, handwriting analysis, and
physiological aspects of the fraudster. The latter refers to something the fraudster reveals in
behaviours, physical expressions, or communications that can be cues as to the veracity of the
fraudster’s statements about his or her involvement in the fraud in question.
TECHNIQUES & TOOLS
 Interviews
 Statement Analysis
 SCAN (Scientific Content Analysis)
 Body Language
 Eye Language Physiological Aspects
 Micro Expressions
The primary purpose of these techniques and tools is to detect deception. If a fraud is being
perpetrated, the fraudster is certainly being as clandestine as possible including using deception
in appearance and communications. Secondarily, these techniques also could be helpful in
gathering useful information.
INTERVIEWS
Auditors ask questions in the course of most audits, whether they are internal or external. But
there is a big difference in asking questions in an audit and asking questions in a fraud
investigation. To ask questions effectively in a fraud investigation, one must employ best
practices for interviewing techniques in that context. The Top 10 steps in a Top Notch Interview
are as follows:
1. Prepare
2. Think as you Go
3. Watch Non-verbal behavior
4. Set the tone
5. Pace your Questions
6. Do more listening than talking
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7. Be straight forward
8. Take your Time
9. Double check the facts
10. Get it in writing
(American Institute of Certified Public Accountants, Inc., All rights Reserved, Copyright
2002)
One of the problems in Fraud investigation is the possibility the investigator is not trained or
experienced in proper interview techniques or worse yet, unfamiliar with the legal protocol of
interviews. In the case of the latter, the case could be frustrated from a successful conclusion or
even end in a counter lawsuit for some legal cause.
Fraud investigators do not necessarily require legal authority to interview or enquire into
fraudulent matters. If the interviewer represents herself as an investigator, however some
countries or states do require a license for investigators. Sometimes you can actually use
deception to legally gain information from a suspect, as long as the interviewer does not use
deception that will likely cause an innocent party to confess. The interviewer should also avoid
any statement that could be taken as extortion.
STATEMENT ANALYSIS
Statement analysis is a technique used to detect deceit in statements that individuals make.
Statement Analysis uses a word by word examination of statements. It determines truthfulness
by an analysis of the words rather than focussing on whether the stated facts are truthful.
Subconsciously, the deceitful person reveals the conflict with which they are struggling in the
way they communicate.
Statement Analysis is the process of analyzing a person’s words to determine if the subject is
being truthful or deceptive. The reason these techniques work is because people’s words will
betray them. There are usually several ways you can phrase a statement. People will always
word their statement based on all their knowledge. Therefore, their statement may include
information they did not intend to share.
Common Red Flags:
1. Usage of Unique words (e.g. Never, Actually)
2. Noun Analysis, i.e. Change in usage of nouns (e.g. “my computer” to “the computer”)
3. Pronoun analysis (I vs. Them)
4. Verb Analysis (changing tenses)
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For Example, When asked to describe what happened before the event in question (e.g. a fraud),
the event, and what happened after the event, the way the person balances the amount of content
on these three sections is an indicator of truthfulness. An honest person tends to balance equally
the content of the three time frames. A deceitful person’s account will be out of balance because
he wants to distance himself from the bad event (wanting to be disassociated with a fraud); the
account of that middle frame will contain substantially fewer words than the other two.
“People mean exactly what they are saying”.
SCAN (Scientific Content Analysis)
SCAN is a technique similar to Statement Analysis. Like statement Analysis, SCAN does not
try to look for the truthfulness of the facts but rather the reflection of deception in the way
statements are made. Deceitful people tend to lie indirectly, and not tell blatant lies. The indirect
lies involve hedging, omitting critical facts, feigning forgetfulness, pretending ignorance.
Deceitful people are reluctant to commit themselves to deceptions, and instead use “verbal
trickeration” to avoid making damaging statements. In order for SCAN to be effective, the
analyst needs a clean truthful statement from the suspect.
The problem with SCAN is that it is only an investigative tool and cannot be used as legal
evidence.
BODY LANGUAGE
A person’s body movements usually indicate emotions he is expressing through adapters or
symptoms. Generally, the person is not aware that he is exhibiting body language at the time.
The body behaviour could be certain movements; pitch of the voice, speed of talking, crossing
legs or arms etc.
Body Language of Lies
 Physical expression will be limited and stiff, with few arm and hand movements. Hand,
arm and leg movement are toward their own body the liar takes up less space.
 A person who is lying to you will avoid making eye contact.
 Hands touching their face, throat & mouth. Touching or scratching the nose or behind
their ear. Not likely to touch his chest/heart with an open hand.
Emotional Gestures & Contradiction
 Timing and duration of emotional gestures and emotions are off a normal pace. The
display of emotion is delayed, stays longer it would naturally, and then stops suddenly.
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 Timing is off between emotions gestures/expressions and words. Example: Someone
says "I love it!" when receiving a gift and then smile after making that statement, rather
than at the same time the statement is made.
 Gestures/expressions don’t match the verbal statement, such as frowning when saying
“I love you.”
 Expressions are limited to mouth movements when someone is faking emotions (like
happy, surprised, sad, awe) instead of the whole face. For example; when someone
smiles naturally their whole face is involved: jaw/cheek movement, eyes and forehead
push down, etc.
Interactions and Reactions
 A guilty person gets defensive. An innocent person will often go on the offensive.
 A liar is uncomfortable facing his questioner/accuser and may turn his head or body
away.
 A liar might unconsciously place objects (book, coffee cup, etc.) between themselves
and you.
Verbal Context and Content
 A liar will use your words to make answer a question. When asked, “Did you write a
cheque to yourself?” The liar answers, “No, I didn’t write a cheque to myself”
 A statement with a contraction is more likely to be truthful: “ I didn't do it” instead of “I
did not do it”
.
Other Signs of a Lie
 A guilty person may speak more than natural, adding unnecessary details to convince
the investigator. They are not comfortable with silence or pauses in the conversation.
 If you believe someone is lying, then change subject of a conversation quickly, a liar
follows along willingly and becomes more relaxed. The guilty wants the subject
changed; an innocent person may be confused by the sudden change in topics and will
want to back to the previous subject.
 Using humour or sarcasm to avoid the subject.
But just because someone exhibits one or more of these signs does not make them a liar. Body
language varies depending on the individual. And there is a tendency to read body language as
deceptive by people who are already suspicious. The latter would include auditors and forensic
accountants using professional scepticism.
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Therefore, body language is fraught with circumstances that cause it to be unreliable as a means
to detect deception consistently, and it is inadmissible in court.
EYE LANGUAGE
Besides observing gross body postures and movements, the eyes can detect tiny changes in the
bodies of others. A more reliable indicator of truthfulness is eye language. Experts believe the
eyes are the most communicative part of the human body. The eyes do have a language and the
principles that follow are referred to as Visual Accessing Cues (VAC). The eye movement cues
and interpretations, however, are true only for right-handed persons. So have the interviewee
sign something before starting any use of VAC because the cues are opposite for left-handed
people; that is, you would be interpreting responses as truthful versus deceitful or vice versa!
Visual Accessing Cues - "Lying Eyes"
The first time "Visual Accessing Cues" were discussed, was by Richard Bandler and John
Grinder in their book "Frogs into Princes: Neuro Linguistic Programming (NLP) " From their
experiments this is what they found.
When asked a question a "normally organized" right-handed person looks (from your viewpoint,
looking at them):
Up and to the Left
Indicates: Visually Constructed Images (Vc)
If you asked someone to "Imagine a purple buffalo", this would be the direction their eyes
moved in while thinking about the question as they "Visually Constructed" a purple buffalo in
their mind.
Up and to the Right
Indicates: Visually Remembered Images (Vr)
If you asked someone to "What color was the first house you lived in?", this would be the
direction their eyes moved in while thinking about the question as they "Visually Remembered"
the color of their childhood home.
To the Left
Indicates: Auditory Constructed (Ac)
If you asked someone to "Try and create the highest the sound of the pitch possible in your
head", this would be the direction their eyes moved in while thinking about the question as they
"Auditory Constructed" this sound that they have never heard of.
To the Right
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Indicates: Auditory Remembered (Ar)
If you asked someone to "Remember what their mother's voice sounds like ", this would be the
direction their eyes moved in while thinking about the question as they "Auditory Remembered"
this sound.
Down and to the Left
Indicates: Feeling / Kinesthetic (F)
If you asked someone to "Can you remember the smell of a campfire?”, this would be the
direction their eyes moved in while thinking about the question as they used recalled a smell,
feeling, or taste.
Down and To the Right
Indicates: Internal Dialog (Ai)
This is the direction of someone eyes as they "talk to themselves".
Visual Assessing Cues 1
Eye language principles also include aspects of blinking. Under normal circumstances, a person
blinks about 20 times per minute, each blink about a fourth of a second. Under stress, a person
usually blinks considerably more than normal, and typically faster than normal. Some benign
circumstances lead to unusual blinking. If being filmed, or on TV, a person would blink about
twice as fast as normal. But a sleep-deprived person also blinks more often.
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Other eye language cues:
 Gaze downward; equates to defeat, guilt, or submission.
 Raising eyebrows; Uncertainty, disbelief, surprise, or frustration.
 Raising one eyebrow and head tilted back; Disdain, arrogance, or pride
 Dilation of pupils; Interest in the thing.
Too much can be made of eye language, and the use of best practices in interviews would lead
to more reliable results and interpretations.
MICRO EXPRESSIONS
A micro expression is a momentary involuntary facial expression that people unconsciously
display when they are hiding an emotion. They are quick & intense expressions of concealed
emotion. Micro-expressions can appear then disappear off the face in a fraction of a second. In
other words micro-expressions occur so quickly, that most people don't even notice them. A
micro-expression is caused by involuntary movements in facial muscles. Most people cannot
control these involuntary muscles which are affected by their emotions.
Micro Expressions are generally grouped into seven universal emotions: anger, disgust, fear,
sadness, happiness, surprise, and contempt.
Micro Expressions betray us when we lie. We can try to cover our feelings with fake smiles, but
involuntary face muscles reveal these hidden emotions. Trained investigators, customs agents,
etc. use micro expression recognition along with other body language & speech cues to
determine truthfulness. While most people can be trained to recognize micro expressions and
other deceptive cues, some folks are naturals.
Dr. Paul Ekman and Dr. David Matsumoto created METT, an online micro expression training
tool. METT and METT2 are being discontinued, but both Ekman and Matsumoto have
developed their own micro expression training software available on their respective sites.
www.humintell.com &www.paulekman.com
But the important thing to remember about micro-expressions is that they only show what
someone is feeling, not whether they lying per-se, and not what they are thinking. The micro-
expression only tells you their knee-jerk emotional state. In other words, just because someone
says "that's awesome!" and flashes a brief micro-expression of contempt, doesn't necessarily
mean they are lying about their feelings. It may be because there is something about the subject
that bothers them.
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CONCLUSION
There are many non-financial sources of potential evidence in a fraud investigation. One of
those key areas is people, interviews, casual conversations, and physical cues of deception or
guilt. There has been a lot written about these physiological aspects, or profile, of fraudsters.
Books have been written on discourse analysis, SCAN, and other techniques used to determine
the presence of deceptive behavior. Thus almost all fraud investigations can benefit from
understanding these principles of the physiological behaviors of fraudsters.
The physiological arena of non-financial information is limited in its ability to provide evidence
that courts will allow. Some of the methods are not even reliable enough for serious use in a
fraud investigation, and should be used with great caution (e.g., body language and lies cues). In
fact, of the ones described above, the only one that would be ‘‘forensic’’ enough for evidence is
“Interview”.
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References:
Fraud Auditing & Forensic Accounting, F. E. (Copyright 2010). Tommie W. Singleton & Aaron J.
Singleton. John Wiley & Sons, Inc.
http://www.blifaloo.com/info/lying-resources.php.
Interview Preparation: Before You Ask the First Question. (Copyright 2002). American Institute
of Certified Public Accountants, Inc. All rights reserved.
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