The Art of Deception And What Accountants Need to Know

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The Art of DeceptionAnd What Accountants Need to
Know
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Did You Know?

• One in four Americans believe its ok to lie to
  an insurance company.
• Eight in ten people surveyed admitted to
  embellishing items on their resume.
• Deception could cost businesses close to a
  trillion (994 billion) dollars a year.
• One third of all resumes contain false
  information.
• More than three-quarters of lies go undetected.
• One in five employees say they are aware of fraud
  in the workplace.

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Deception

• What is it?
• Can anyone deceive?
• Is it possible to detect deception?
• Is there a science to this or is the idea of
  catching deception through tells just a parlor
  game?
• Are you good at deception?
• How important is it for us to be able to detect
  deception even at a basic level?

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What Do You Know About Deception?

• Are you good at deception?
• Can you spot it in others?
• What are some cues to deception?
• Have you discovered any techniques that aid in
  detecting deception?

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NLP

• What is it?
• What does it have to do with deception and
  ultimately with spotting a lie?
• Heres a hint It is the basis of stress
  analysis and polygraph testing.
• Can you tell if someone is untruthful?
• The Human Lie Detector?

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Lies and Deception

• Liars choose to mislead their target and the
  target is not informed of the liars intention to
  mislead.
• 2 forms of lies concealment and falsification
• Why do lies fail?
• Why people fail to detect lies?

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Eckman Suggests
Lies of Omission Concealing Lies
Eckman found that people who committed lies of
omission or simply not telling the whole truth
would gravitate to lies of commission with the
addition of one catalyst.
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Eckman Suggests
Lies of Omission Concealing Lies
Lies of Commission Falsifying Lies
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Eckman Suggests
Lies of Omission Concealing Lies
Lies of Commission Falsifying Lies
Confrontation (Catalyst)
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What is Deception?

• A method to portray a belief that is not true, or
  not the entire truth.
• Can use distraction, camouflage, or concealment
  to help disguise the truth.
• On a given day, most human beings will either
  deceive or be deceived by another person.

Master of Deception
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Types of Deception

• Lies
• Providing information that is the
  opposite or significantly different from the
  truth.
• Equivocations
• Making an indirect, ambiguous, or contradictory
  statement.
• Concealments
• Omitting information that is vital in
  understanding a given situation, or engaging in
  behavior that helps hide relevant information.
• Exaggeration
• Overstatement or stretching the truth to a
  degree.
• Understatement
• Minimizing or downplaying aspects of the truth.

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Facial Recognition Software

• Matches human face against database of pictures
• Distance between eyes
• Width of nose
• Depth of eye sockets
• Shape of cheekbones
• Length of jaw line
• Next? 3D and micro-expressions

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Polygraph Test

• Do not detect lies
• Instead, detect when a person is attempting to
  deceive.
• Examines heart rate, blood pressure, respiratory
  rate, and sweatiness in comparison to normal
  levels.

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What Does a Polygraph Measure?

• Respiratory rate two rubber tubes filled with
  air are placed around the chest and abdomen.
• Muscles expand and displaces the air in the
  tubes.
• Blood pressure/heart rate a blood-pressure cuff
  is placed around the upper arm.
• Galvanic skin resistance (GSR) measures the
  sweat on an individuals fingertips.

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Reading the Polygraph

• Results are seldom admissible in court.
• False Positive truthful response is determined
  to be deceptive.
• False Negative deceptive response is determined
  to be truthful.

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Dr. Paul Ekman

• Ph.D. in clinical psychology
• Officer in the U.S. Army
• Researches emotion and expressions
• Numerous awards, TV appearances and published work

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Universal Expressions

• Contempt
• Anger
• Fear
• Surprise

• Sadness
• Disgust
• Happiness

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A. Rod Example
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What Does This Face Signal?
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Verbal Clues to Deception

• Changes in speech patterns
• Repetition of the question
• Comments regarding the interview
• Selective memory
• Making excuses
• Oaths
• Character testimony
• Answering with a question

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Verbal Clues to Deception

• Overuse of respect
• Increasingly weaker denials
• Failure to deny
• Avoidance of emotive words
• Refusal to implicate other suspects
• Tolerant attitudes
• Reluctance to terminate interview
• Feigned unconcern

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Nonverbal Clues

• Full-body motions
• Anatomical physical responses
• Illustrators
• Hands over the mouth

• Manipulators
• Fleeing positions
• Crossing the arms
• Reaction to evidence
• Fake smiles

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In the news
Fraud in Academic Research
Fawzi Alrazem, who went by the name Fawzi Razem
when caught faking experiments in Canada, is now
listed as a faculty member at the Palestine
Polytechnic University. The picture posted on his
Hebron universitys website, is identical to the
picture, associated with his University of
Manitoba research misconduct case.
Reference check?
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Hard to Believe
From The London Times A Well-Planned Retirement 
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Outside England's Bristol Zoo there is a parking
lot for 150 cars and 8 buses. For 25 years, its
parking fees were managed by a very pleasant
attendant. The fees were 1 Euro for cars
(1.40), 5 Euro for busses (about 7).
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Then, one day, after 25 solid years of never
missing a day of work, he just didn't show up so
the Zoo Management called the City Council and
asked it to send them another parking agent.
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The Council did some research and replied
that the parking lot was the Zoo's own
responsibility. The Zoo advised the Council that
the attendant was a City employee. The City
Council responded that the lot attendant had
never been on the City pay role.
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Meanwhile, sitting in his villa somewhere on the
coast of Spain (or some such scenario), is a man
who'd apparently had a ticket machine installed
completely on his own and then had simply begun
to show up every day, commencing to collect and
keep the parking fees, estimated at about 560
per day -- for 25 years. Assuming 7 days a week,
this amounts to just over 7 million dollars!
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And no one even knows his name!
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Demonstration
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The Art of DeceptionAnd What Accountants Need to
Know
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Quick Security Update

• Greg Freix
• University of Kansas
• School of Business

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Whats Up with Phones?
Image source http//blog.laptopmag.com/12-reason
s-why-android-still-beats-the-iphone-4s

• Phones and Cyber-stalking
• Smartphones and Identity Theft

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Tips - Phones

• Password protect all deviceshome and mobile
• Be careful when loaning your phone to anyone
• Might you have spyware?
• Watch for unusually high battery use
• Be alert for unexplained high text or data
  service
• Watch for background noises, strange actions

Compiled from multiple open sources
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Tips Identity Theft

• All the standardsphishing, shredding, etc.
• Be careful what you share on a public WiFi
• Use applications that provide security HTTPS,
  VPNs, etc.
• Use caution when downloading cool apps
• Phones are an increasing source of identity theft
• Monitor credit card activity
• Take breach notifications seriously
• The breached company will often pay for credit
  monitoring services for a year

Compiled from multiple open sources
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Flash Drives

• Incredibly usefulbut.
• Easy to use
• Easily lost
• Can contain sensitivefor educators,
  FERPA-protected, data
• One solutionencryption

Image source http//www.newegg.com/Store/SubCateg
ory.aspx?SubCategory522
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Easy, Free Encryption

• I use TrueCrypt (see http//www.truecrypt.org)
• Download and install the executable
• Required to use the encryption software
• Run to create afile container/volume
• Mount to use
• Dismount when done

Full discussion of this and other processes in
Beginners Tutorial at http//www.truecrypt.org/
docs/. (Image from my office computer.)
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Some Benefits

• Sensitive info is portable yet protected
• Easy to use, especially in its simplest modes
• Encrypts/decrypts on the fly just another
  drive
• Allows part of a flash (or other) drive to be
  encrypted, part not
• Important for presentations and such
• ReliableIve used for years without a single
  failure
• Container/volume file easily copied/moved
• Allows for easy backup
• Copy requires software/proper password to open
• Product is free (donations accepted, not
  required)

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A Word on Passwords

• Password cracking demo in past used an older
  protocol to ease/speed process
• LM hash algorithm disabled by default in newer
  systems
• Butall passwords are crackablegiven enough time
  
• Sosome tips
• Strong passwords/phrases still bestlonger time
  to crack
• Length, character set, unpredictability, etc.
• Changing frequently reduces time available to
  crack
• Frequency depends on resource being protected
• Avoid helping the bad guys. How.?

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How to Help the Bad Guys

• Surf wildly download lots of cool stuff
• Freely enjoy the convenience of unencrypted
  coffee house, airport, and hotel WiFi networks
• Reuse passwords for less important sites
• Heck, use your banking password. Its easier to
  recall!

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Questions?