Forensic CPAs are among the most curious and inquisitive of accountants just by the nature of their jobs. But innate curiosity doesn’t mean that one automatically knows everything about conducting a good forensic interview. Frederick Kohm, partner, forensic advisory services, with Grant Thornton in Philadelphia, joins CPA Conversations to share a series of tips for conducting more effective and efficient forensic interviews. He explores the importance of setting an interview’s tone, the value of nonverbal cues, and what it means to establish a baseline to gauge an interviewee’s truthfulness.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

To excel as a forensic CPA, effective interview techniques are a must, whether it's knowing the optimal approach to the interview, being able to gauge both verbal and nonverbal cues, or successfully establishing an interview's tone. There are many aspects that can ultimately establish whether a sit-down is a success or a failure. To help us understand best practices of forensic interviewing, today we will be talking to Frederick Kohm, partner, forensic advisory services for Grant Thornton U.S. in Philadelphia.

What would you say the benefits are of effective interviewing for a forensic CPA?

[Kohm] There really are a lot of them. I'd say that the greatest benefit of an effective interview would be gathering the information that you need to gather, the reason that you did the interview. That should be really aimed at gathering fair and impartial information from the individual that you're speaking with. There are a lot of ways that interviews can go well, and there are many ways that interviews can go bad, but the greatest benefit from a good interview is that you'll walk away from that interview gathering the information that you looked to obtain through that interview. Many times, you gather a lot more information than you thought you would.

When you're setting up an interview that you're going to conduct, do you think it's necessary to state a reason for the interview or is it better to operate by surprise?

[Kohm] In my experience, it's always been better to state the reason for the interview. A lot of times, forensic accounting type interviews, we're talking to a number of different people. We'll start out sort of broad and then work toward specific issues. We do that with the people that we're speaking with as well. Generally speaking, I'm always most comfortable letting the individuals know what we're there for, why we're speaking with them that day.

It doesn't have to be specific to, say, the allegation that you're trying to gather information around. It can be a little bit more broad. It could be conversational, based on the controls at an organization, or trying to understand process around someone's area, whether they be in operations or some other group within the organization, but I always try to be upfront. There are some legal considerations around that particular topic as well. From a forensic advisory type standpoint, we're working with outside counsel on many of our investigations. We always talk to outside counsel or general counsel at our client around that particular topic and make sure that we're approaching it in an inappropriate manner.

I've heard of some different approaches to interviewing and forensic interviewing, such as, for one example, starting with non-key personnel and moving to key individuals. Another would be sort of vice versa to that. What do you think the ideal approach is?

[Kohm] I think the ideal approach is really going from the more general and broad to the more specific type issue. When we're engaged to take a look at a particular allegation, whether it be a finding from an internal audit group or an allegation that was through a whistleblower type hotline, our first steps are always trying to gather as much information as possible. Our role is really to both prove and work to disprove the allegation. We're trying to be objective and understand the lay of the land and really work toward finding the truth. In order to do that, I believe that you really need to understand a lot of the different issues surrounding that allegation. I think the best approach is to start broad and, as you learn more about the different issues that might be around that allegation, you can get a little bit more specific and narrow your scope toward the individual or specific transactions that you're looking into.

How important would you say it is to set an interview's tone early? What should that tone be? Does it vary from person to person that you're talking to?

[Kohm] It can. It's an interesting question because each individual that you interview, there might be a particular individual who's nervous about the interview. They don't know why they're being interviewed. Other individuals might be excited about talking with you because they're interested in providing information.

A lot of times, the person that you're speaking with plays a lot into the tone of the interview out of the gates, but I think best practice is always to try and be conversational. Open up the interview with conversation that's light. You want to try and get the person to open up and be comfortable with you. That's not only the discussion that you're having, but it's also the setting, where you're having the interview. You want to make sure it's a space that person is comfortable in. You're always going to start conversational, and open the interview with questions that the person is going to be comfortable with. Then you want to get into questions that are a little bit more specific to the allegations at hand.

For interviews, it's important that you don't go in with a script. You never know really where the conversation is going to take you. You start off with that conversational type tone and then you're trying to get to the more specific information. Then, to close an interview, you want to have some closing statements and commentary to make sure you go over the facts that were uncovered. You provide the person with an opportunity to provide additional information if they may have forgotten something that perhaps they wanted to share, but, again, try and close the interview on a lighter note so that they're comfortable coming back to you with additional information if they remember something after the fact.

What is meant by establishing a baseline to gauge an interviewee and how do you do that?

[Kohm] There are a couple of different ways to do it. That opening dialogue is going to help you establish a baseline to gauge that interviewee. Some of it is the way an individual responds to your questions. In other cases, it might be their body language and it might be the way that they're approaching the discussion, but establishing that baseline, it's kind of getting a feel for whether this particular individual that you're interviewing is going to be someone that is going to provide information or if it's someone that is going to be a little bit more difficult to talk to. It's a combination of body language and the tone of that opening dialogue.

What would you say is more important to gauge the truthfulness of a subject? Is it the verbal or the nonverbal cues?

[Kohm] I think it's a combination of both. The nonverbal cues, it's an interesting area of study. I've heard different commentary around different types of body language. Obviously, someone crossing their arms, crossing their legs, they might be a little bit more closed to providing information, but some of it is just the way a particular individual is communicating. If they're telling you upfront that they've got competing demands for their time or there are sort of the etiquette that they're portraying, that could potentially be a barrier. Just disapproval for even having that conversation, they might come out with saying, "I'm not sure why I'm here. I don't know why you need to talk to me." It's not always body language. Sometimes it's the words that are being said and someone's attitude toward the conversation.

There are a couple of different ways to try and manage that. One is that you want to make sure that you're friendly when the interview begins and that you're not putting someone off right out of the gate. Some techniques might include no need to come in and introduce yourself with all of your titles and using terminology that might put someone on their heels. No need to come in and say you're the president of your company or a partner at a firm, and given your senior status, you're performing an investigation. Things like that could end up putting someone off a little bit and perhaps closing the conversation down before you even get started. I'd say it's a combination when you talk about body language, whether it's those verbal cues versus nonverbal cues whether someone's going to be helpful or not.

Would you say that there are any common errors forensic CPAs or even internal auditors make in the course of such interviews? How can they be counteracted?

[Kohm] I'd say one of the largest mistakes that I see made, and it's one of the things that I always talk to my team about before we go into an interview, is that it's okay to have moments of silence. It's okay to wait for someone to answer a question. Sometimes, I think forensic accountants, CPAs, they might be having some good conversation, some good dialogue, and that leads people into answering questions for someone, asking questions that are not on point with allowing the other person to have that conversation that you need to have in order to hear information. I think one of the mistakes that people make is answering questions for people and talking too much, not allowing for that sort of silent period for someone to be able to answer a question fully.

Forensic CPAs are probably fairly inclined toward curiosity and inquisitiveness, but maybe they aren't natural interviewers. Are there any techniques or training activities that can help a CPA improve in this area?

[Kohm] There are. There are podcasts like this one. There are CPE trainings that are available. The ACFE has some great information out there as well that you can utilize for a bank of questions that you might want to consider asking. They actually have questions that are good to ask, questions that aren't good to ask, the way questions might be phrased in one way or another, might be more beneficial to you. That's a great resource as well.