What to Do When Your Fraud Examination Turns Hostile

Hostile or rude interviewees, passive aggressive tactics, unsavory characters. These are things a fraud examiner or auditor could face when conducting an investigation. Ed Stolle, CFE, CPA, CGFM, CFCI, manager and advisor at the Federal Housing Finance Agency, knows these characters well and shared his own experiences during his session, "What to Do When Your Fraud Examination Turns Hostile."

Stolle began his session with one such story. He'd been working with an inspector general for a little over a year when he went into an audit as the lead auditor. At the end of the second day he was in the president’s office and saw something in her binder that interested him. He asked for the binder, and she replied that wasn’t on his task list. Next thing he knew, the president began berating Stolle and promptly threw him out of the audit site.

Stolle went back to his office the next day, much to his boss' surprise. He explained what had happened, and his boss excitedly replied, “She’s being hostile. She’s hiding something.”

The next day, Stolle and his boss went back to the site and were able to get the binder. "It was a lot thinner, but I got the binder," said Stolle.

Stolle explained that the rest of the audit wasn't much better. The president's hostility didn't wane — to the point that she even wrote a letter about him to Congress. In the end, though, she lost her job. She'd been paying her boyfriend to do consulting work, but no work was being done. She also traveled on personal trips using grant funds. Clearly her hostility was indicative of her guilt.

“To me hostility is a huge red flag," said Stolle. "When somebody’s hostile, that’s not a normal response.” In Stolle's interactive session, attendees also shared their experiences with hostility (one even involved death threats), and all of them resulted in guilty parties.

Stolle shared a helpful list of techniques to deal with hostility:

  • Allow venting
  • Listen for feelings
  • Determine source (facts vs. opinions)
  • If you sense noncooperation or a defensive attitude, express appreciation for whatever cooperation you’ve already received
  • Maintain your composure
  • Control your feelings
  • Listen, don’t react
  • Set some limits
  • Sidestep loaded questions
  • Avoid opinions
  • Clarify that they can stop the interview at any time
  • Try to determine if their aggression is being used to hide something they don’t want you to know
  • Don’t prohibit them from consulting with a representative if they ask to
  • Contact your and/or their management when situations escalate

Above all, terminate the interview if you feel like you're in danger. No engagement, examination or audit is worth your life.