Week 11 and 12 - Mock Trial

During the mock trial both barristers had shown exquisite skills allowing it extremely difficult to provide sufficient expert evidence. According to the text, yes it is essential to provide a well structured report, however I have to disagree there are other preparations required and it is not just simply answering questions.

The mock-trial allows me to grasp a clear view how expert witnesses were assessed in court. The atmosphere was definitely intense along with two intimidating barristers ready to question me. The overall experience was a great learning experience which allowed me to learn the importance of what preparation work is required when needed to provide expert evidence to the court.

A well-structured report does assist you while you are being called upon an expert witness however, for one the barristers will question the context of the report. Hence, the first major issue I had identified was the knowledge you have of your own report. In practical context, the barristers study and review from the first to the end of that expert report you are to provide to the court. By doing so, they attempt to look for weak spots and question the credibility of the expert witness to the court. And this includes knowing the detail of the report. By not being able to answer the barristers correctly, and cause panic, this allows them to question in front of the court the your credibility as a expert witness in court. If the court is satisfied, the expert evidence could be disregarded.

Another major problem that was shown in the mock-trial by the fellow students was the role of an expert witness. Although the report was not written by us students, the barrister was able to question whether the expert evidence constituted factual evidence or simply an expert's opinion. By raising such an important issue, in practical context the barrister could raise to the court to disregard certain parts of the report.

Firstly, a well structure report is certainly recommended when a forensic accountant expert witness is required to appear in court. Further, there needs to be a calm mind-set when entering the witness box allowing them not to be panicked by the barrister's questions. Also, answer precisely what the barrister is essentially asking. By providing too much information in an answer, this allows the barrister to find other details and apply pressure on certain answers that could come with strong consequences.

Week 10 - The Forensic Accounting Expert Witness

There are differences in the applicable evidence law between Australian jurisdictions. Such differences in evidence law may be significant in the extent to which case law in one Australian jurisdiction may not be applicable in another jurisdiction. In essence, each Australian jurisdiction has rules that govern the content of, and the manner of giving expert evidence. As such, like the Federal Court Rules (2011) section 23.15 this provides specific scope and content of the rules applicable to expert evidence which differs significantly between Australian jurisdictions. This allows the author to satisfy formal requirements in its jurisdiction (Charrett, 2015). Furthermore this also shows that the court exercises considerable control over the form of expert evidence. For forensic accounting expert witnesses evidencing in court for the first time, the first advice I would give to would be to comply with all the legal procedures to prepare for the expert evidence. (Craig, Smieliauskas & Amernic, 2014). 

By doing so the proceeding is done in a timely manner, and less problems could occur in regards to procedural. Secondly, is not to overriding the duty of assisting the court. Particularly, an expert witness is not an advocate for a party in proceedings, and the paramount duty is to the court. Finally do not overwhelm the court with extra information. By providing strong facts and expert opinion as requested by the court this also saves time and minimises costs.

Reference

Practice Note CM 7:  Expert Witnesses in Proceedings in the Federal Court of Australia

Federal Court Rules 2011 (Cth) rr 5.04(3), 23.15.

Charrett, D., 2015. The rules for expert evidence in Australia, s.l.: Melbourne TEC Chambers.

Craig, R., Smieliauskas, W. & Amernic, J.  (2014).  Assessing Conformity with Generally Accepted Accounting Principles Using Expert Accounting Witness Evidence and the Conceptual Framework.  Australian Accounting Review, 24, 200–206.  doi: 10.1111/auar.12039

Week 9 - Preventing Fraud and Risk Management

Organisations traditionally focus on internal controls to battle fraud and misconduct. Although I think this is both a great place to start and a good thing to do, internal controls will not offer complete protection against fraud. Unfortunately, many organizations have no insight into the behavioural factors of employees. These organizations tend to take a legalistic approach and focus primarily on battling fraud by adding more “opportunity” controls (Cressey, 1973). Doing so might even result in bureaucratic and costly internal control systems with many sign-offs, yet they still experience incidents of non-compliance. An example of this effect is the approach that some companies have made toward implementing the Sarbanes-Oxley internal control frameworks. The frameworks required a lot of paperwork, yet according to many employees, it added little in terms of actual control against unethical behavior ultimately having an adverse effect because of this ineffectiveness (Dittmar, 2006).

I believe a more appropriate way for fraud management will also need to incorporate the behavioral factors of the Fraud Triangle, namely the “Pressure” and “Rationalization” factors. In particulars, to assess the pressure factors is to have an integrity survey with employees. The following step in training employees for them to be aware of and alert for possible rationalisations is to provide dilemma training.

By establishing such an approach to internal control will lead to a much more effective internal control and also a more cost efficient one as well.

Reference

Donald R. Cressey, Other People's Money (Montclair: Patterson Smith, 1973) p. 30.

Dittmar, S. W. (2006). The Unexpected Benefits of Sarbanes-Oxley. Harvard Business Review.

Week 8 - Interviewing Techniques for Forensic Investigation

During trial, the prosecution may ‘press’ on certain witnesses to provide a confession to the court. However, if such confession is provided by duress, it is possible to argue for inadmissible evidence, the court has the power to dismiss the witness’s oral evidence which could potentially cause an error of law (Davies, 2002).

There are three interviewing techniques that could be applied in order to minimise problems as mentioned:

1. REID – a guided model on lying detection and psychological persuasion (Rollnick & Miller 1995);

2.  PEACE – Provides a framework for interviewing witnesses; essentially providing a ‘conversation management’ approach and locating the witnesses’ inconsistencies; and

3. Motivational Interview - “A directive, client-centred counselling style for eliciting behavioural change by helping clients to explore and resolve ambivalence”.

Additionally, there are court rules that disallows how questions are framed when questioning witnesses for example, closed questions. The court disallows interviewers or interrogators to guide the witness to answers where they could potentially hurt their credibility.

Much evidence has suggested that a humanitarian approach is more likely to result in a confession. Thus, this should be an alternative approach as this could first, limit the confusion of interrogation and interviewing. Moreover, this could also assist the court to determine whether the confession was orchestrated by duress.

In my working experience at a law firm, we usually encourage our clients to tell us everything about their legal dispute matter whether it prejudices them or not. Although they may be disadvantaged, this allows us to provide support on that issue and encourage the court to disregard it.

Reference

Davies, G. L. (2002).  The Exclusion of Evidence Illegally or Improperly Obtained: An Unsatisfactory Answer to an Unstated Question.  Journal of Financial Crime, 9, 224 – 248.  doi: 10.1108/eb026023

Rollnick, S., & Miller, R.W. (1995. What is MI? Retrieved from http://www.motivationalinterview.net/clinical/whatismi.html

Week 7 - Identifying and Profiling Fraudsters

Week 7

In my view, the differential association theory explains why fraud occurs by groups within an organisation because it focuses on how individuals learn the criminality behaviour influenced by their associated groups (Sutherland, 1924). In particulars, when an individual is socialising with an associated group who has criminal behaviour involved, the individual is more likely to follow that group’s footstep. Although I do not associate with these groups, I do agree with this view. From working at a law firm, I mostly associate with solicitors and by interacting with them I am able to learn the values, attitudes and techniques required to work in the industry.The General Strain theory argues that strains or stressors increase the likelihood of negative emotions like anger and frustration which could result to crime (Agnew, 1992). In my view this explains how an individual turn to fraud by the pressure applied from their lives (work or personal). For example, at my work place there is a target of billing six hours of work. This can cause stress to an individual and allowing fraud or corruption to meet these targets at work. Personal financial issues could also be a motive under this theory. In contrast Cressey’s Fraud Triangle in my view postulates that employee’s commit fraud when they have the opportunity to do so, when they are motivated to do so, and when they can justify or rationalise their behaviour. I believe the fraud triangle indeed addresses both matters as discussed with the elements presented with opportunity provided by associated groups, pressure or motivation from the groups or external factors (ie. Finance) and rationalization (Cressey, 1973). Unfortunately, many organizations have no insight into the behavioral factors. These organizations tend to take a legalistic approach and focus primarily on battling fraud by adding more “opportunity” controls. Doing so might even result in bureaucratic and costly internal control systems with many sign-offs, yet they still experience incidents of non-compliance (Kiewit, 2014).

Reference

Agnew, Robert 1992. “Foundation for a General Strain Theory of Crime and Delinquency.” Criminology 30:47-87

Donald R. Cressey, Other People's Money (Montclair: Patterson Smith, 1973) p. 30.

Kiewit, Martijn D. (2014) Preventing Fraud: Behavioral Factors in the Fraud Triangle: Expert blog KPMG Switzerland.

Sutherland, Edwin H. (1924) Principles of Criminology, Chicago: University of Chicago Press

Week 6 - Civil Law and Forensic Investigation

Week 6

The common criticism of expert witnesses including forensic accountants is that they are overly partisan and fail to provide the court with a neutral or independent opinion. Previous cases had indicated judges are getting frustrated when there is deliberate partisanship. (Keegan v. Minneapolis and St. Louis R.R., 1899)   This could be drawn from my experience where I could have 'acquaintances or friends' to help me and provide evidence in that assists me in situations. To prevent such partisanship to occur I think a few strategies could be implemented.
Firstly since the expert witnesses act most as an advocate for their client's case, the court should implement a procedure rule where forensic accountant expert witnesses should be appointed by the court and declare the duty of a forensic accountant expert witness in relation to the court. The implementation would diminish the level of bias that may occur since they are not acting on behalf of a client, and also they have a duty of care to perform in court (refer to APES 215). Secondly, if parties are required to seek expert evidence in trial, they are required to seek directions from the court, and its the courts discretion to determine whether it  should be required.

By implementing this rule into the Uniform Civil Procedure Rules in Queensland, I believe this will not only prevent partisanship but will enable expert witnesses like forensic accountants to provide more effective evidence for the court.

Reference: 

Keegan v Minneapolis & St Louis RR, 78 NW 965

Uniform Civil Procedure Rules 2005 (NSW)

Week 5 - Criminal Fraud and the Law

Week 5

Again drawing the experience from me studying law, crimes like cyber crime requires more guidance and strict or vicarious liability need to be enforced to minimise such crime. Prime example would be the case Kennison v Daire, where the court was able to explore offences committed by the use of computer technology, however, the prosecution found it difficult to prove such offence. Furthermore, it remains uncertain as to whether our current legislative systems contains all the computer offences or technical definitions that prevents cyber crime from happening. Computer crime must now confront obfuscation crime tools used to commit computer abuse such as dynamic domain name hosting, encryption, fast-flux and double fast-flux, malware, onion routing, peer-topeer (P2P) channels, Trojans and virtual private network services. (The Report of the Inquiry into Cyber Crime, 2010.)

For recommendations, I suggest Australia should first implements principles in relation to cyber crime and only to be of guidance for courts to apply if assistance is required. Having these principles as guidance, will result the court to come a decision allowing other matters to rely on the judgment. Thus, it allows this to law and allow the courts then further to develop strict and vicarious liabilities for these crimes.

Reference:

House of Representatives Standing Committee on Communications, Hackers, Fraudsters and Botnets: Tackling the Problem of Cyber Crime — The Report of the Inquiry into Cyber Crime, 2010.

KENNISON v. DAIRE [1986] HCA 4

Criminal Code Act 1995 (Cth)

Week 4 - The Australian Legal System and Jurisdiction

AYB115 Week 4

The profession of forensic accounting involves activities of:

 Investigation of frauds - thorough investigation and calculation of the impact on the business and therefore suggesting the arrest of the culprit for a criminal suit. Today, in the IT environment, where users' profiles are very similar and access controls are somehow lacking, this becomes critical. A general problem in forensic identification arises when a suspect is observed to have a particular rare trait, or combination of traits, also known to be possessed by the criminal (Balding and Donnelly, 1995).

 Legal disputes and/or arbitration

 Preparation and submission of expert reports

 Supporting of Judges in subjects relating to accounting

 Verification of accounting records

 Supporting in due diligence.

In essence, I'd like to draw my experience of studying law that as an evolutionary field, what I have learnt is the profession requires infinite of changing. For example back in the 18th and 19th century there was no legislation in regards to binding electronic contracts. However, now in the 21st century we have electrical signatures that allows contracts to be binding, and for such act to be legalised, this required constant development in the field of law. 

As this is also required in a profession of forensic accounting. We live in a society where technology innovation is constantly occurring. As such a crucial profession that mainly investigates fraud, it is essential that the profession acts similarly to the Law and continues to develop and control fraudulent acts from individuals and large corporations. The constant development will help the profession to 'keep up' with our innovative society.

Reference:

Balding, D. J. and Donnelly, P. (1995), Inference in Forensic Identification. Journal of Royal Statistical Society, 158 Part1, pp. 21-53

Week 3 - Governance and Management Responsibility

Week 3 AYB115 

The COBIT 5 is a toolset that allows managers to bridge the gap between IT requirements, technical issues and business risks. In essence, COBIT is designed to ensure good control over information to meet requirements of its audiences (i.e. Stakeholders). If the business had minimised virus, adware and maleware protection in 2016, crucial information including trading secrets could be obtained which may allow fraud, bribery or corruption to occur.  (Ahmed, 2009).

From my previous experience, if my computer did not install its yearly antivirus software, this leads the information of my computer out to the open. With the current technology innovation, crucial information can be easily stolen without proper maleware protection. 

Principle 1 of COBIT requires the Enterprise to meet stakeholders needs (commercial or not). As such, if the information was stolen this could amount to a risk of bribery to the stakeholders. Such risk also applies to Priniciple 3 of applying a single integrated framework, if information of the enterprises framework, this could lead to a risk of bribery or corruption.

Importantly, according to principle 2 of COBIT provides that there should be covering of the enterprises end-to-end perspective. This includes everything and everyone, internal and external. 

Principle 4 of enabling a holistic approach supports the development of an integrated framework. Enablers are factors that collectively influence whether something will work. The information leaked could lead to bribery.

The leak of principle 5 could lead to risks of fraud, bribery and corruption.

Conclusively, I disagree with the above statement and that  information security should not be minimised regardless of exaggeration to ensure enterprise information is protected.

Reference List:

Ahmad, A. (2009). Exploring COBIT Processes for ITG in Saudi Organisations: An EmpiricalStudy. The International Journal of Digital Accounting Research, 9(1577-8517), 99-126. Retrieved fromhttp://search.proquest.com.ezp01.library.qut.edu.au/docview/197412484/fulltextPDF?accountid=13380. 

Week 2 - Fraud, corruption and IT Governance and Policy

Week 2 - AYB115

In separation of management and governance allows both disciplines to govern their types of activities, different organisational structures and serve different purposes. I believe it is essential that governance ensures that stakeholder needs, conditions and options are evaluated to determine enterprises objectives, setting direction and decision making, and monitoring performance. In contrast, management plans, builds, runs and monitors activities in alignment with the direction set by the governance body to achieve the enterprise objectives. (Ahmad, 2009)

For example when I was employed at MacDonalds, if there was no management, or any sort of governance to monitor performance of employees, this would lead poor quality service and food. If such an arrangements were risks of fraud, bribery or corruption could occur internally.

With such a structure, this establishes the enterprises control reduces the risk of fraud and misconduct. Further, with management this also enables fraud detection. In prevention of bribery, the governance ensures the stakeholders needs and the enterprises objectives, as such, this ensures stakeholders participation. Further, monitoring and managing the potential conflict of interest of members of the enterprise (corruption). 

Hence, I agree with the above statement.

Reference List:

Ahmad, A. (2009). Exploring COBIT Processes for ITG in Saudi Organisations: An EmpiricalStudy. The International Journal of Digital Accounting Research, 9(1577-8517), 99-126. Retrieved from:http://search.proquest.com.ezp01.library.qut.edu.au/docview/197412484/fulltextPDF?accountid=13380.