The Mock Trial

I agree that the major preparation for the trial is constructing a well-structured report. However, I disagree that a well-structured report alone suffice as the only preparation needed where the expert can just turn up to court on the day to answer questions. It is extremely crucial for experts to familiarise themselves with detailed contents of their report so as to prevent being criticised by the barrister and in worse cases, having their expert evidence disregarded which may lead to losing the case (Family Court of Australia, n.d.).

The mock trial provided insights on how expert witnesses were being examined in court. It was an intense and stressful atmosphere with barristers all geared up, ready to shoot questions. Some of the issued I noted during the mock trial was that some student experts only focused on the sections assigned to them and did not grasp a good understanding of the entire case. It was obvious who was well-prepared and who was not. It gave the barrister the opportunity to pressurise the student experts and drill them with questions when they demonstrated signs of lack of preparedness, thereby making them lose their credibility when they panic and could not answer the questions posed by the barrister. Another issue I observed was student experts provided too much information when being questioned or when they did not understand the questions but still tried to answer without trying to clarify before responding. This allowed the barrister to discover loopholes in their answers with the risk of their credibility at stake. Student experts also tend to use opinion words such as “think”, “assume”, “feel”, “suppose” which goes against the basis rule that evidence provided should be based on facts and not opinions (ALRC, n.d.).

Apart from having extensive knowledge and memorising details of own expert report, I recommend expert witnesses to remain impartial and calm in future court appearance, bearing in mind that it is not their role to make an accusation but only to assist the court in understanding the issues of the case and thereby reaching a sound decision based on hard evidences found during the investigation they conducted (Crumbley & Russell, 2004). From what I had learnt during the mock trial, the barristers will always attempt to make you doubt your own material. Thus, it is important to have confidence and trust that the facts in your own report was done correctly and most importantly, only bring in issues relevant to the case. It is a critical because illustrated in the case of Storey v Dorset Community NHS Trust, the expert raised irrelevant issues in the report which instead, had his report disregarded as the report failed to provide an objective unbiased evidence to aid the court in decision making.

Additionally, some tips given by Paul Vincent during the mock trial was to always keep your hands visible and not hide it under the witness stand as it will make you look less confident. He also suggested that students should only answer with simple concise answer, straight to the point so that we do not veer off topic.

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References

ALRC. (n.d.). The Opinion Rule and its Exceptions. Retrieved from Australian Law Reform Commission: http://www.alrc.gov.au/publications/9.%20The%20Opinion%20Rule%20and%20its%20Exceptions/opinions-based-specialised-knowledge

Crumbley, D. L., & Russell, A. K. (2004). So You Want to Be an Expert Witness. Retrieved from Journal of Accountancy: http://www.journalofaccountancy.com/issues/2004/oct/soyouwanttobeanexpertwitness.html

Family Court of Australia. (n.d.). The Changing Face of The Expert Witness. Retrieved from Family Court of Australia: http://www.familycourt.gov.au/wps/wcm/connect/b81f88e5-d1a9-4d11-a093-b6795a2b9ae3/expertwitness.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-b81f88e5-d1a9-4d11-a093-b6795a2b9ae3-lh-paRJ

Role of FA Expert Witness

The role of a forensic accounting expert witness is to assist the court by providing independent and objective opinions about the case. I strongly believe it is crucial for the expert witnesses to be well trained, educated and not be partisan because expert witnesses who fall short of these standards will have their reports disqualified which means the expert’s report will not be taken as an evidence in court. Disregarded reports or evidences would mean wasted costs and time of the parties involved, it causes damage to not only the expert witness’ reputation but also the company of the expert witness, and most importantly, it will affect the case’s outcome.

In the case of Van Oord UK Ltd and another v Allseas UK Ltd [2015], the expert witness was heavily criticised by the judge for the report he produced and the evidences he presented at trial. The followings were the reasons why (ICAEW, 2016), the expert witness:

• took Van Oords’s words at face value without checking the credibility of the underlying documents that support them
• only looked at witness statements prepared on behalf of Van Oord and even copied parts of the witness statement into his own report 
• failed to adhere to the judge’s specific instructions
• formulated claims based on forecasted rates instead of actual costs incurred by Van Oord
• accepted there were errors in his report during cross-examination which led to confusion and admitted he could no longer support important elements of his claim

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References

ICAEW. (2016). When expert witnesses get it wrong. Retrieved from Institute of Chartered Accountants in England and Wales: http://www.icaew.com/en/archive/technical/legal-and-regulatory/forensic/expert-witness/when-expert-witnesses-get-it-wrong

Van Oord UK Ltd & Anr v Allseas UK Ltd. [2015] EWHC 3074 (TCC)

SME and Fraud and Corruption Controls

SMEs should follow and implement Australian Standard 8001-2008 in their businesses even though it may be challenging to do so. This is because unlike larger companies, many SMEs are not subjected to statutory audit by law (ASIC, n.d.). This puts them at a higher risk as they also may not be equipped with the necessary controls to detect fraudulent activities within the organisation. 

While I was serving my internship, I got the chance to audit several SMEs who no longer qualify for audit exemptions in Singapore. After performing audit testing, we discovered fraudulent financial reporting on one of the enterprise due to the fact that the senior personnel was under tremendous pressure to meet financial targets set by the owner manager; where senior employees recorded fictitious revenues in order to meet the targets. 

While global organisations such as Volkswagen and Target can survive fraudulent scandals, most SMEs cannot. A study conducted by the Association of Certified Fraud Examiners’ Global Fraud Study 2016 showed that organisations may lose up to 5% of their annual revenue whereas SMEs could lose up to an entire year’s profit due to fraud.

Thus, in order to avoid becoming a fraud, bribery and corruption statistic, it is crucial for SMEs to ensure their corporate culture does not tolerate any fraudulent activities, they should also adopt anti-bribery policies and educate their employees to voice out on improper conduct, with whistle blowing rights to employees whenever they witness any instances of bribery or corruption (Darvall-Stevens, 2016).

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References

ACFE. (2016). Report To The Nation On Occupational Fraud and Abuse - 2016 Global Fraud Study. Retrieved from Association of Certified Fraud Examiners: https://www.acfe.com/rttn2016/docs/2016-report-to-the-nations.pdf

ASIC. (n.d.). Small proprietary companies. Retrieved from Australian Securities & Investment Commission: http://asic.gov.au/regulatory-resources/financial-reporting-and-audit/preparers-of-financial-reports/small-proprietary-companies/small-proprietary-companies-controlled-by-a-foreign-company-and-are-not-disclosing-entities/

Darvall-Stevens, R. (2016). To Mitigate Fraud, Bribery And Corruption Risk, Sme Leaders Must Foster A Desirable Culture. Retrieved from Dynamic Business: http://www.dynamicbusiness.com.au/small-business-resources/leadership/to-mitigate-fraud-bribery-and-corruption-risk-sme-leaders-must-foster-a-desirable-culture.html

Humane or Coercive Interview Approach?

I agree that it is more efficient to use a humanitarian interviewing approach. A study conducted by Jarrett (2014) found that when this approach was used, disclosure was 14 times more likely to occur early in an interrogation and confession were four times more likely when the interrogators showed a neutral and respectful stance. 

A documentary I had watched in the past also showed that using coercive techniques to obtain information is not only unethical, but also ineffective because when the suspect is oppressed physically and emotionally, it tends to lead to a false confession as the suspect may blurt out things that the interrogators wants to hear out of fear.

However, although using humane strategies may be deemed more effective, I feel that a more verbally-aggressive approach could still be used when dealing more severe crimes or when the suspect are not cooperative as it may lead to a confession if the suspect feels intimidated (Khazan, 2014). 

When conducting an interview, FA should ask non-leading and open-ended questions and not reveal unnecessary information about the crime, thus, allowing suspects to provide their own detailed explanations of their crime and secure a confession (Blair, 2005). Alternatively, FA can also employ an alternative questioning technique where the suspect is presented with only 2 choices on why the crime was committed. For example, asking the suspect if he had embezzled the funds because of bills or drugs (Heuback, 2009). In this case, if the suspect accepts either of these, he is admitting their guilt.

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Reference

Blair, J. (2005). What do we know about interrogation in the United States? Journal of Police and Criminal Psychology, 20(2), 44-57.

Heuback, J. (2009). Suspect Interrogation: Communication Strategies and Key Personality Constructs- Jessica Heuback. Retrieved from Advances in Communication Theory and Research: http://www.k-state.edu/actr/2010/12/20/suspect-interrogation-communication-strategies-and-key-personality-constructs-jessica-heuback/default.htm

Jarrett, C. (2014). Rapport-building interrogation is more effective than torture. Retrieved from BPS Research Digest: https://digest.bps.org.uk/2014/12/11/rapport-building-interrogation-is-more-effective-than-torture/

Khazan, O. (2014). The Humane Interrogation Technique That Actually Works. Retrieved from The Atlantic: https://www.theatlantic.com/health/archive/2014/12/the-humane-interrogation-technique-that-works-much-better-than-torture/383698/

Is Cressey’s Fraud Triangle still relevant?

I disagree that Cressey’s fraud triangle is an outdated approach. Although the fraud triangle is usually used to decipher emotional and psychological motives of an employee in an organisation (Morang, 2015), the same tool may also be applicable in comprehending why groups commit frauds, including cybercrimes. 

Employees with the harbouring the same motives may collude and commit frauds. Applying the fraud triangle to the Wells Fargo’s scandal, employees colluded as they were pressurised with aggressive sales goals, they also had the opportunity due to weak internal controls and company’s failure to discipline fraudsters. Additionally, they can justify that it was a victimless crime and other colleagues were committing the same crime (Tippett, 2015). 

Whereas for cybercrimes, organised gangs have the opportunity since they do not have to commit crimes in person (Peachey, 2015), their pressure could also be in the form of greed or personal debt, and they can rationalise that their chances of getting caught is low.  

Organisations could make use of the following theories to understand why fraud, bribery and corruption are increasing. Differential association theory can help organisations understand how their employee could learn criminalistics behaviour just by interactions with someone with criminal tendency (Albrecht, 2014). A study conducted by Langton, & Piquero (2007) showed that General Strain Theory is a useful tool in predicting certain white-collar offenses such as bribery, embezzlement and credit fraud. Some red flags of fraud include internal control weaknesses as well as accounting and behavioural anomalies, thus, it is crucial for companies to involve employees at all levels in preventing, detecting and minimising the impact of fraud (Ratley, 2012).

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References

Albrecht, W. S. (2014). Iconic Fraud Triangle endures. Retrieved from Fraud Magazine: http://www.fraud-magazine.com/article.aspx?id=4294983342

Langton, & Piquero. (2007). Can general strain theory explain white-collar crime? A preliminary investigation of the relationship between strain and select white-collar offenses. Journal of Criminal Justice, 35(1), 1-15.

Morang, S. C. (2015). Does the Fraud Triangle properly address Cyber-Fraud? Retrieved from LinkedIn: https://www.linkedin.com/pulse/does-fraud-triangle-properly-address-cyber-fraud-steve-morang

Peachey, P. (2015). Cyber crimes increase: Why the criminals get away with it. Retrieved from Independent: http://www.independent.co.uk/voices/cyber-crimes-increase-why-the-criminals-get-away-with-it-a6696086.html

Ratley, J. D. (2012). Corporate Fraud Awareness in Today's Global Regulated Environment. Retrieved from Association of Certified Fraud Examiners, Inc.: http://www.theiia.org/chapters/pubdocs/11/corporatefraudawarenesstoday_sglobalregulatedenvironment.pdf

Tippett, E. C. (2015). How Wells Fargo encouraged employees to commit fraud. Retrieved from The Conversation: http://theconversation.com/how-wells-fargo-encouraged-employees-to-commit-fraud-66615

Quantifying Damages

In tort action, there are 4 broad categories of damages – compensatory, nominal, aggravated and exemplary or punitive (Australian Law Reform Commission, 2017). In my opinion, aggravated damages maybe one of the most complex category to work on as it may be too remote and difficult to put a value for the claim for damaged feelings or emotional distressed. This may also be the reason why the law has always been reluctant to compensate for mental distress (Havilah, 2014). 

Quantification of losses should be based on factual evidences, documents and witness statements, as well as expert reports. Another complexity in assessing damages was displayed in the case of Ramsay v BigTinCan Pty Ltd [2014], where the courts struggled to quantify the damages as the process is difficult, impressionistic and highly subjective. All 4 judges in the case had made used of different methods and percentage of estimates to determine the sum to be awarded (Angyal, 2014). 

Specialised knowledge is crucial to understand the most effective method to use in evaluating the claims. Since in this process, forensic accountants (FA) have to exercise a lot of their own judgements and will be appear in the court to elaborate on the process, having specialised knowledge will ensure that the FA’s credibility and professionalism are not undermined during the legal process. 

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References

Angyal, R. (7 October, 2014). Quantifying damages for economic loss: Is this the hardest thing commercial lawyers do? Retrieved from Legalwise Seminars: http://www.legalwiseseminars.com.au/articles/posts/2014/quantifying-damages-for-economic-loss-is-this-the-hardest-thing-commercial-lawyers-do/

Australian Law Reform Commission. (2017). 12. Remedies and Costs. Retrieved from Australian Law Reform Commission: https://www.alrc.gov.au/publications/12-remedies-and-costs/damages

Brennan, N., & Hennessy, J. (10, 2001). Forensic accounting and the calculation of commercial. Retrieved from Research Repository UCD: http://researchrepository.ucd.ie/bitstream/handle/10197/5384/08_18_Brennan_Hennessy_Forensic_Accounting_and_the_Calculation_of_Commercial_Damages_Bar_Review.pdf?sequence=1

Havilah, B. (23 October, 2014). Compensation for reputation loss and hurt feelings – Maybe Not? Retrieved from Havila Legal: http://www.havilahlegal.com.au/compensation-for-reputation-loss-and-hurt-feelings.html

Strict or Vicarious Liability to Minimize Fraud, Bribery and Corruption

I agree that strict or vicarious liability will minimise fraud, bribery and corruption. This reminded me of my previous café job. Our staff benefits includes unlimited ice-cream during work, but some staffs went overboard by not charging their friends when they patronised the café. Thus, the boss threatened to deduct our salaries should there be any significant variance in the sales and ice-cream quantity. This almost eradicated the issue when the responsibility was shifted to us to ensure others avoid committing such acts.

The major business crime categories include white-collar crime, organised crime, computer crime and regulatory, corporate and compliance offences (Latimer, 2012). An example is the Dark Web where cybercriminals anonymously seeks into the market to purvey illicit goods such as drugs, weapons, counterfeit, trade secrets and copyrighted, falsified or stolen documents (Pierce, Ballard, & Nguyen, 2016). Anonymity is furthered by the use of Bitcoin, a digital currency that’s untraceable to any single person. Such crimes will be minimised as Internet Service Providers (ISP) are vicariously liable if they have the right and ability to control the activity and profits from the infringement (Teran, n.d.). This was illustrated in the US case where ISP Cox Communications was ordered to pay $25 million to BMG Rights Management LLC for the copyright infringement of its subscribers, which engaged in illegal peer-to-peer sharing of music files using Cox’s internet services (Hoover, 2015). 

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References

Hoover, J. (17 December, 2015). Cox Must Pay BMG $25M For User Piracy, Jury Finds. Retrieved from Law 360: https://www.law360.com/articles/739353/cox-must-pay-bmg-25m-for-user-piracy-jury-finds

Latimer, P. (2012). Crime In the Business World. In P. Latimer, Australian Business Law 2012 (p. 96). Australia: CCH Australia Limited.

Pierce, J. E., Ballard, M., & Nguyen, T. X. (2016). Global brand and content protection: developments and emerging technologies. Retrieved from World Trademark Review: http://www.worldtrademarkreview.com/Intelligence/Anti-counterfeiting/2016/Industry-insight/Global-brand-and-content-protection-developments-and-emerging-technologies

Teran, G. (n.d.). ISP Liability for Copyright Infringement. Retrieved from Harvard: https://cyber.harvard.edu/property99/liability/main.html