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Forensic Accounting and Fraud Investigation for Non-Experts, 3rd Edition by Michael Sheetz, Howard Silverstone, Frank Rudewicz, Stephen Pedneault

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CHAPTER 13

Inferential Analysis

Introduction

In Chapter 11 we introduced you to a simple hypothetical in which we were attempting to prove that the defendant killed his wife. In that rudimentary example, the line of logic was simple. We found the defendant's glove at the scene with the victim's blood on it. The logic of the argument seems to compel the conclusion that the defendant committed the murder. It is rare that the logic of a case is so simple. It is even rarer that the logic of a financial crime case is that simple. On the contrary, most financial crime cases suffer from a double curse. First, the sheer mass of evidence is incomprehensible. Second, the logic necessary to prove the case often is composed of several interlocking and conjunctive lines of argument formed in a proposition of alternatives.

This form of allegation can confound the investigator and can bog down an investigation that lacks a strong focus. To avoid this miring effect, you must organize your investigation and construct it from the simplest logic possible. The tools in this chapter will help you do that.

How Inferential Analysis Helps

Deconstructing the legal theory of the case into the ultimate probandum and penultimate probanda is the first step. In legal terms, a probandum is simply the proposition we want to prove. Therefore, the ultimate probandum is that final proposition we are trying to prove. In most cases, the ultimate probandum will be that the defendant committed the criminal act. The ...

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