The Latest in Detecting Deception

I spend about two and a half weeks in my Fraud Examination class studying how we can detect when someone is being deceptive. I think it's a fascinating area that holds a lot of promise as one of the best things auditors could learn to utilize to detect fraud. If I was king of independent auditing for a day, I would change auditors' requirements to interview for fraud but that is the subject of a future post...

When I teach about detecting deception, I emphasize to my students that non-verbal cues are much less reliable than verbal cues. Some recent research shows that text analysis in verbal cues reveals four patterns in people who are lying. Check out the short, but informative, video below to learn more.

SEC to Focus more on Financial Reporting Fraud

According to the Wall Street Journal, the SEC is ready to get back to work looking for financial reporting fraud. After the mortgage meltdown, the article states that the SEC turned its attention to cases related to the financial crisis and took its eye off of fraudulent financial reporting. Interestingly, the article identifies one new tool that the SEC plans to use to identify fraudulent financial statements...