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.

1. Non-Financial
Evidences
(Behavorial
Aspects) In A Fraud
Examination
Submitted by:
CA. Pallavi Vyas
(M Com., FCA, ISA(ICAI))
pallavi.vyas27@gmail.com

2. 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 Evidences
(Behavrial Aspects) In A Fraud Examination

3.  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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
INTRODUCTION

4. 1. Interviews
2. Statement Analysis
3. SCAN (Scientific Content Analysis)
4. Body Language
5. Eye Language
6. Micro Expressions
Physiological Aspects
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES &
TOOLS

5. 1. Interviews
2. Statement Analysis
3. SCAN (Scientific Content Analysis)
4. Body Language
5. Eye Language
6. Micro Expressions
Physiological Aspects
The primary purpose of these techniques and tools is to
detect deception.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES &
TOOLS

6. TECHNIQUES &
TOOLS
1. Interviews
2. Statement Analysis
3. SCAN (Scientific Content Analysis)
4. Body Language
5. Eye Language
6. Micro Expressions
Physiological Aspects
If a fraud is being perpetrated, the fraudster is certainly being as
clandestine as possible including using deception in appearance
and communications.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination

7. 1. Interviews
2. Statement Analysis
3. SCAN (Scientific Content Analysis)
4. Body Language
5. Eye Language
6. Micro Expressions
Physiological Aspects
Secondarily, these techniques also could be helpful in
gathering useful information.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES & TOOLS

8. 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
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES & TOOLS

9. 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
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)
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
INTERVIEWS
TECHNIQUES & TOOLS

10.  One of the problems in Fraud investigation is
the possibility the investigator is not trained or
experienced in proper interview techniques or
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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
INTERVIEWS
TECHNIQUES & TOOLS

11.  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
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
INTERVIEWS
TECHNIQUES & TOOLS

12.  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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
INTERVIEWS
TECHNIQUES & TOOLS

13. TECHNIQUES & TOOLS
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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination

14.  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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES & TOOLS
STATEMENT ANALYSIS

15.  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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES & TOOLS
STATEMENT ANALYSIS

16. 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)
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES & TOOLS
STATEMENT ANALYSIS

17. TECHNIQUES & TOOLS
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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination

18.  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 indirect lies involve hedging, omitting critical
facts, feigning forgetfulness, pretending ignorance.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
TECHNIQUES & TOOLS
SCAN (Scientific Content Analysis)

19. TECHNIQUES & TOOLS
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.
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination

20. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
Body Language of Lies
TECHNIQUES & TOOLS
BODY LANGUAGE

21. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
 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.
Emotional Gestures & Contradiction
TECHNIQUES & TOOLS
BODY LANGUAGE

22. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
Emotional Gestures & Contradiction
TECHNIQUES & TOOLS
BODY LANGUAGE

23. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
Interactions and Reactions
TECHNIQUES & TOOLS
BODY LANGUAGE

24. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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”
Verbal Context and Content
TECHNIQUES & TOOLS
BODY LANGUAGE

25. TECHNIQUES & TOOLS
BODY LANGUAGE
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
Other Signs of a Lie

26. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
 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.
TECHNIQUES & TOOLS
BODY LANGUAGE
Other Signs of a Lie

27. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
EYE LANGUAGE
TECHNIQUES & TOOLS
BODY LANGUAGE

28. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
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) “.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

29. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Richard Bandler and John Grinder 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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

30. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Richard Bandler and John Grinder found, when asked a
question a "normally organized" right-handed person
looks (from your viewpoint, looking at them):
 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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

31. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Richard Bandler and John Grinder found, when asked a
question a "normally organized" right-handed person
looks (from your viewpoint, looking at them):
 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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

32. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Richard Bandler and John Grinder found, when asked a
question a "normally organized" right-handed person
looks (from your viewpoint, looking at them):
 To the Right - 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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

33. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Richard Bandler and John Grinder found, when asked a
question a "normally organized" right-handed person
looks (from your viewpoint, looking at them):
 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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

34. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Richard Bandler and John Grinder found, when asked a
question a "normally organized" right-handed person
looks (from your viewpoint, looking at them):
 Down & To the Right - Indicates: Internal Dialog (Ai)
This is the direction of someone eyes as they "talk to
themselves".
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

35. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
Visual Assessing Cues
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

36. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

37. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
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.
EYE LANGUAGE-Visual Accessing
Cues - "Lying Eyes"
TECHNIQUES & TOOLS
BODY LANGUAGE

38. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
MICRO EXPRESSIONS
TECHNIQUES & TOOLS
BODY LANGUAGE

39. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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
TECHNIQUES & TOOLS
BODY LANGUAGE

40. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
MICRO EXPRESSIONS
TECHNIQUES & TOOLS
BODY LANGUAGE

41. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.
MICRO EXPRESSIONS
TECHNIQUES & TOOLS
BODY LANGUAGE

42. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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
MICRO EXPRESSIONS
TECHNIQUES & TOOLS
BODY LANGUAGE

43. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 The most 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.
MICRO EXPRESSIONS
TECHNIQUES & TOOLS
BODY LANGUAGE

44. CONCLUSION
Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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.

45. Non-Financial Evidences
(Behavrial Aspects) In A Fraud Examination
 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”.
CONCLUSION