Association helps members become more proficient at fraud investigation

In 2002 she was hired as an expert witness in the MFP computer leasing inquiry, which examined how the City of Toronto ended up paying out $85 million — twice the amount approved by council — to lease computers it had recently owned. She soon found herself the centre of a lot more attention than she had ever expected.

“I was retained as an expert witness; what I didn’t know was the degree to which my results and myself would be in the media,” says Mann, a director with Froese Forensic Partners in Toronto.

Teaching members how to be expert witnesses is just one of the functions of the ACFI. Founded in 1998, the non-profit organization seeks to help members become more proficient at fraud investigation, detection and prevention. It sets the professional and ethical standards for the Certified Forensic Investigator designation, based on experience and education. Through regional chapters, an annual convention and a website (www.acfi.ca), it promotes the discussion of issues related to fraud, which includes providing Canadian information in a discipline that is dominated by American literature. It also produces a fraud manual, updated annually, that is used in courses at universities and colleges.

The association now has 250 members across Canada. While accountants make up the largest section of that membership, it includes professionals from other fields, such as police officers, barristers and solicitors, private investigators, and loss prevention and security professionals.

The process of investigating fraud depends on the case, Mann says, and every case is different. Today, it often means going beyond the traditional books and other physical records to searching electronic records. Specialists, such as computer forensics experts, are often hired to go along with investigators to examine computer hard drives and email.{mospagebreak}

“My guess is that in excess of 80 per cent of the information we see today is in an electronic format, so you need a computer specialist to come in with you,” she says. “When we go in and do an investigation, I may have the forensic accounting and investigative hat on, but I bring a colleague in who’s a computer forensic expert. Sometimes, I will bring in an ex-police officer. So we operate in a team approach.”

Investigators also gain their information by talking. Mann says she meets and interviews many people — sometimes to understand better how the business works, to understand documents she has or simply to find out where to look for further information.

“You keep an open mind, you have to be independent, you have to be objective. And the best way of doing that is to gather as much information from as many sources as possible because each source that you gather information from confirms or dispels something that you previously picked up and saw,” she says.

“For example, you may look at a document and think it is telling you one thing. But if you put that document in front of an individual, and you ask them questions around that document, you’ll get another layer of the story. And it’s not until you keep on adding puzzle pieces, I call them, that you get the full puzzle.”

In addition to serving members, the association also provides information to the public, including a directory to help them find someone to hire. Many managers bring in a forensic investigator as soon as a fraud is suspected, executive director Alan M. Langley says, not just because investigators know how to identify the wrongdoing but because they know how to deal with the situation and the people involved. A victim of fraud may react spontaneously, revealing key information or even accusing someone. That allows the person suspected to counter with a lawsuit.

“You can damage a case to the extent that that person could gain more legally from you than they could illegally,” he says. “But we are taught, through our experiences and our education, that there are certain things you can say and ways of dealing with it that are acceptable, and there are many more ways that are unacceptable. Generally, the object is to be on the offensive, not on the defensive.”{mospagebreak}

Langley, who has headed the association since its beginning, has often spoken to student and public audiences. By now, he’s familiar with some of the misconceptions that outsiders have of the job of forensic investigation. From TV programs like “Murder She Wrote,” he says, many people think that the standard detection and resolution is completed in 30 to 60 minutes, “minus commercials.” In fact, some of his cases took months, even years. One case, he recalls, took six years just to get to court.

Another popular misconception is that — as he puts it — anybody can do it. But, he says, very few accountants have the personality and skills to do forensic investigations. “You can prevent fraud — most people can — but the investigation requires a certain mindset, the ability to sit up and say something does not smell right; it doesn’t make good business sense.”

The association is the only body in Canada that issues a certificate in forensic investigation (CFI). The designation requires three years of practical experience and a combination of postgraduate and specialist education. Regular membership is $245; associate members (those not working toward the CFI) pay $100.

Objectivity, a keen sense of detail and an investigative mindset — but Langley believes a good investigator also needs a sense of humour. Because sometimes, you may know a person has defrauded someone but it doesn’t turn out the way you expect.

“You like to do a job and do it well, and with some of these investigations, the outcome is not what you would feel the individual warranted. In some cases you think the individual should be placed up against a brick wall and shot. And they are promoted,” he says.

“But, sadly, it happens, and as an individual in the area you have to go home and take a bath and prepare yourself for the next day.”