Brandon B. Buhler and Dr. W. Jeff Wilks, Accounting and Information Systems
Over the past few years, investors in Corporate America have witnessed a rise in financial fraud. With escalating frauds in the business world, investors are more determined to gain assurance from the auditors of the financial statements. The Sarbanes-Oxley Act of 2002 also increased legislative pressures on auditors to detect fraud.
When performing audits, the auditor receives a letter of representation from the client stating that the client has given truthful details appertaining to the company. To a certain extent, the auditor must rely upon this representation from the client. If the client wished, they could simply lie about the status of their company and provide deceitful information to the auditor. Just because an auditor is diligent when making inquiries while questioning the client, it doesn’t mean the auditor will automatically be able to detect deception on the client ’s part. There are more than just the client’s verbal responses that the auditor must analyze. The auditor must also notice and analyze the nonverbal cues emitted by the client.
My research involved identifying and compiling in a report aimed at the auditing profession the nonverbal cues the academics determined can be relied upon to determine truth telling and deceit. After my initial research, I found not much has been written about deceit detection specifically geared towards the auditing profession. However, much research has been conducted and documented that shows nonverbal cues can be relied upon to detect deceit. Nonverbal cues include such diverse behaviors as facial expressions; bodily orientations, movements, and postures; vocal cues (other than words); aspects of physical appearance; interpersonal spacing; and touching.1 Nonverbal cues can be categorized into three main areas— the face, audio, and the body.
The face is a very revealing part of our demeanor. Smiling can occur when attempting to mask negative emotion of disgust, fear, contempt, or sadness. By focusing on the muscle actions associated with disgust, fear, contempt, or sadness, researchers were able to detect deception when subjects were trying to mask negative emotions with a happy mask.2 Focusing on the eyes, especially pupillary response, can give direction to the receiver during an interview. During a study using pupillary response, 70% of participants with guilty knowledge and 100% without such knowledge were correctly detected.3 It has also been shown that deceitful subjects maintained eye contact during interviews.4
Audio cues differ from the commentary given by the sender. Anything other than the commentary is included in nonverbal cues (i.e. change in pitch, tone, or speed). In general, it has been found in studies that tone of voice was a better source of deception than the face.5 A change in pitch, loudness, or rate of speech is generally found in subjects with increased anxiety levels.6 The body is very revealing. Bodily cues that are typical nonverbal cues during deception include head movements, shifting positions, foot and leg movements, gestures, self-manipulations, and hand/finger movements.7
It is not enough to simply rely on set criteria of cues and the way they are presented. A process of calibration is necessary for the auditor to establish a base line to which they can compare the interviewee’s reactions. Deception is perceived from nonverbal behavior that violates normative expectation. 8 Expectancy viola tion can be determined by first creating a baseline of perceived normal behavior and then comparing reactions during higher stress questioning for any deviations.
My research showed that not much has been researched on nonverbal cues as it pertains specifically to auditors. However, I found many studies indicating reliance on nonverbal cues can prove beneficial. The process of calibration is essential when detecting deceit. It is important to compare the interviewees responses during high-stress questioning to those exhibited during low-stress questioning. It is also important to train auditors on what nonverbal cues are, how to detect them, the process of calibration, and how to analyze the responses given by clients. This research experience has been very beneficial to me as a Masters of Accountancy student. As I graduate and begin my career as an auditor with a national accounting firm, the knowledge gained about detecting deceit has given me a foundation to build upon.
References
- DePaulo, B. M. (1992). Nonverbal Behavior and Self-Presentation. Psychological Bulletin. Vol. 111, No. 2, 203- 243.
- Ekman, P., Friesen, W. V., & O’Sullivan, M. (1988). Smiles When Lying. Journal of Personality and Social Psychology. Vol. 54, No. 3, 414-420.
- Lubow, R. E. and Fein, O. (1996). Pupillary Size in Response to a Visual Guilty Knowledge Test: New Technique for the Detection of Deception. Journal of Experimental Psychology: Applied. Vol. 2, No. 2, 164-177.
- Bond Jr., C. F., Kahler, K. N., & Paolicelli, L. M. (1985). The Miscommunication of Deception: An Adaptive Perspective. Journal of Experimental Social Psychology. 21, 331-345.
- Zuckerman, M., Amidon, M. D., Bishop, S. E., & Pomerantz, S. D. (1982). Face and Tone of Voice in Communication of Deception. Journal of Personality and Social Psychology, Vol. 43, No. 2, 347-357. DePaulo, B. M., Lassiter, G. D., & Stone, J. I. (1982). Attentional Determinants of Success at Detecting Deception and Truth. Personality and Social Psychology Bulletin. Vol. 8, No. 2, 273-279. Vrij, A., Edward, K., & Bull, R. (2001). Stereotypical Verbal and Nonverbal Reponses While Deceiving Others. Personality and Social Psychology Bulletin. Vol. 27, No. 7, 899-909.
- Frick. R. W. (1985). Communicating Emotion: The Role of Prosodic Features. Psychological Bulletin. Vol. 97, No. 3, 412-429.
- Vrij, A., Semin, G. R., & Bull, R. (1996). Insight Into Behavior Displayed During Deception. Human Communication Research, Vol. 22, No. 4, 544-562.
- Bond Jr. C. F., Omar, A., Pitre, U., Lashley, B. R., Skaggs, L. M., & Kirk, C. T. (1992). Fishy-Looking Liars: Deception Judgment from Expectancy Violation. Journal of Personality and Social Psychology. Vol. 63, No. 6, 969- 977.