• Journal of Financial Crime

Publisher:
Emerald Group Publishing Limited
Publication date:
2011-12-21
ISBN:
1359-0790

Latest documents

  • Editorial
  • Mapping corruption in procurement

    Purpose
 This paper aims to focus on understanding and preventing corruption in procurement in public sector settings. Just as not all corruption is the same, not all procurement is the same. One purpose is to analyze different types of procurements: standard, customized, intangible and complex. Corruption in procurement undermines public administration, and the purpose of this paper is to identify different types of procurements and provide readers with a framework for analysis and subsequent intervention.
 Design/methodology/approach
 In all, 42 actual cases of public sector corruption in procurement are examined, and from these, an analytical matrix is developed. These cases are derived from the reports of the New South Wales (Australia) Independent Commission against Corruption. These cases represent all of the procurement cases that the ICAC has taken to a formal hearing in its 30 years of existence.
 Findings
 While fraud is a major feature of corruption in procurement, there are significant organizational facilitators, and a number of slippage points in organizations are identified. These include peer culture, lack of due process, temptation and managerial incompetence/willful disregard, and these are built into a matrix which can be used in different countries or settings by readers wishing to understand and prevent different types of corruption in procurement in their agencies.
 Originality/value
 This paper uses cases that have not previously been aggregated or analyzed and provides analytical tools for practitioners and academics.

  • Cybercrime: an emerging threat to the banking sector of Pakistan

    Purpose
 The purpose of this study is to gain more insight into the impact of cybercrime incidents in the banking sector of Pakistan. This study investigates the significant contribution of information security awareness on the relationship of cybercrimes and organizational performance.
 Design/methodology/approach
 The impact of cybercrime incidents on organizational performance is investigated by further exploring the moderating effects of information security awareness. A sample of 302 employees in the banking industry of Pakistan was studied by using survey design.
 Findings
 Cybercrime incidents have negative impact on organizational performance, but information security awareness weakens the negative impact of cybercrimes on organizational performance.
 Research limitations/implications
 The present study focuses on the banking sector so its finding cannot be generalized in other sectors. Further, in-depth comparative studies in other sectors with different cultural settings will help to authenticate the research findings.
 Practical implications
 Information security awareness weakens the negative impact of cybercrimes on organizational performance; therefore, it is important for banks’ HR managers to set up more security training courses to increase employees’ awareness on cybercrimes.
 Originality/value
 This study explores the impact of cybercrimes on banks’ performance with the moderating role of employees’ information security awareness. Linking these topics has created a new study within the cybercrimes discipline. The present study also enhances the understanding of employees’ role to combat the impact of cybercrimes on organizational performance.

  • Determinants of sales misconduct in Indian retail banking services. Does sales approach lead malpractices?

    Purpose
 The purpose of this paper is to demonstrate those factors which are responsible for the sales misconduct in Retail banking services across the world and try to find out the determinants which majorly affect the Indian Retail banking industry. The authors also try to find out whether the sales approach leads to malpractices in sales and how does it affect the different categories of the customers.
 Design/methodology/approach
 Primary data have been collected from the bank account holders having account in various private and public sector banks operating in India.
 Findings
 The authors have come out with finding that sales misconduct is majorly affected by misrepresentation of facts, complexity of products, lack of disclosure norms and more. They also found that push sales approach is adopted by banks, particularly by private banks to majorly tap the class customers to sell the financial products without their requirement and achieve the revenue targets.
 Practical implications
 Banking regulators can keep a close supervision on sales mal practices in banking sector and implement stringent norms to reduce these kinds of practices.
 Originality/value
 Very few studies have been conducted on the basis of the class of the customer, and how sales approach leads the malpractices in sales and how it affects the class of the customers.

  • To whistle or not to whistle? Determinants and consequences

    Purpose
 Many corporate scandals that occurred recently have indicated the importance of a whistle-blowing mechanism in preventing fraud and malpractices from damaging the organizations. By selecting one organization that has experienced a corporate scandal, this study aims to examine factors that influence employee’s intention to blow the whistle to prevent malpractices in the company. In addition, this study also examines the perceptions of employees regarding the business culture in their organization and how this culture impacts their intention to whistle-blow.
 Design/methodology/approach
 This study engages in a mixed method of data collection, namely, survey questionnaire and interviews to gather the data.
 Findings
 It is found that retaliation is the most important factor that influences the employee’s intention to whistle-blow, followed by the burden to prove the malpractices, cost implications as a result of the wrongdoing and the action taken by the authority as a result of the fraud reporting. In terms of business culture, a large number of employees are reluctant to become a whistle-blower, although a secured and safe whistle-blowing mechanism is in place, indicating that Asian customs of collectivism and assertiveness play a major part in shaping the whistle-blowing mechanism in Malaysian organizations.
 Research limitations/implications
 The results provide further confirmation of the determinants that influence employees to report wrongdoings in the organizations. This study however may subject to self-reported data biasness because of sensitivity of the research that related to fraud and immoral behaviours that occur in the company. Owing to this sensitivity, the study only focuses on employees’ internal whistle-blowing intentions rather than their actual intentions.
 Practical implications
 This study helps the management to understand the working culture in the company so that they can identify the weak area of governance which needs improvement such as whistle-blower protection.
 Originality/value
 This study is original, as it focuses on the employees in a big organization such as government link companies that have experienced corporate scandals albeit having whistle-blowing mechanism in place. In addition, the finding of this study contributes to the theory and body of the literature on the whistle-blowing determinants, currently scarce in the context of a developing country like Malaysia.

  • Policing the illicit trade of tobacco in Australia

    Purpose
 The purpose of this study is to identify factors that have led to the rebirthing of the illicit cultivation of tobacco in Australia known as chop-chop. Limited research has been conducted on the Commonwealth policing of tobacco-related criminal activity, but no prior studies have investigated domestic cultivation since the tobacco farming ceased legal production.
 Design/methodology/approach
 To fill the void of the literature, this study used data collected from Australian Government publications, court cases and newspapers to develop an understanding of the financial aspects and policing of the rebirth of chop-chop. Newspaper articles for a range of publications for a two-year period were used to examine policing efforts to disrupt criminals engaged in domestic cultivation of tobacco.
 Findings
 As tobacco was first legally grown in Australia, authorities have always faced the problems associated with the illicit cultivation of tobacco. Findings indicate that as a result of the increased number of successful interception of illicit tobacco at the border, the domestic cultivation of chop-chop is growing as criminal enterprises find alternative means to fund their activities.
 Originality/value
 The paper improves upon a neglected topic by offering a current contribution to a topic looking at the illicit tobacco, chop-chop trade.

  • Combating corruption in Nigeria: the emergence of whistleblowing policy

    Purpose
 This paper aims to appraise the roles of whistleblowing policy as a tool for combating corruption in Nigeria. Methodologically, it examines how the policy could be strengthened to effectively address the challenges of corruption in Nigeria.
 Design/methodology/approach
 This paper is essentially a desk research with reliance on the secondary source of data. Relevant materials were collected in an eclectic manner from official documents, statutes and other published outlets such as books, journal publications, online articles, news reports and newspaper articles. Its scope is limited to issue and content analysis relating to the use of whistleblowing policy as a tool to combat corruption.
 Findings
 The paper finds that whistleblowing policy is an effective anti-corruption instrument that has facilitated discovery and recovery of looted public resources and prosecution of culprits in Nigeria.
 Originality/value
 This paper demonstrates how whistleblowing as an anti-corruption mechanism could be strengthened in Nigeria when the legislator finally passed the Whistleblower Protection Bill into law.

  • Disentangling anti-corruption agencies and accounting for their ineffectiveness

    Purpose
 The purpose of this paper is to provide an adequate account of anti-corruption agency (ACA) ineffectiveness and propose the kind of ACA that would hold the promise of success. The paper draws on legitimacy theory, legal process and the notion of integrity of purpose.
 Design/methodology/approach
 This paper contextualizes the establishment and proliferation of ACAs; explores different ways of conceptualizing them; examines the broad range of factors that have underpinned ACA ineffectiveness and utilizes both legitimacy theory and the notion of the integrity of purpose.
 Findings
 The one-ACA-model-fits-all approach in corruption-control has been an abysmal failure. Disentangling the reasons for ACA ineffectiveness reveals various endogenous and exogenous factors. It also emphasizes the crucial importance of integrating both legitimacy theory and integrity of purpose in a revamped ACA concept that meets the corruption-control challenge.
 Practical implications
 It is possible to design and implement an effective ACA by avoiding various factors that have been shown to seriously undermine corruption control efforts by also drawing on legitimacy theory, legal process and integrity of purpose.
 Social implications
 Corruption in both the public and private sectors cannot be controlled in isolation from other socio-economic problems. An effective ACA is one that fosters integrity and is considered legitimate by its stakeholders.
 Originality/value
 While there have been some articles the past two decades discussing the effectiveness of ACAs in particular countries, this is the first paper to account for the overall ACA ineffectiveness also using legitimacy theory, legal process and integrity of purpose to revamp the ACA concept.

  • Corruption in Russia’s Primorsky Kray: is transparency the answer?

    Purpose
 The purpose of this paper is to use open-source Russian government data to investigate the relationship between transparency and corruption. Russia is a developed country with a strong legal system and world-class transparency in government contracting, which according to many, should positively impact corruption. This study tests that hypothesis.
 Design/methodology/approach
 The paper statistically analyzes six months’ worth of Russian government contracts from a single Russian province and another month of data from a different province for comparison. The statistical analysis revealed individual instances of corruption, which were then analyzed qualitatively.
 Findings
 The paper found that competitiveness in Russian government contracting is extremely limited, and instances of corruption on a grand scale are easy to find in publicly available data.
 Research limitations/implications
 The paper only studied data from two Russian provinces, so readers should be careful about generalizing from the results. Further research should consider similar data, if obtainable, from other countries.
 Practical implications
 Countries seeking to limit corruption should consider cultural change, as well as modifications to government processes and legal systems.
 Originality/value
 The paper indicates that sound and transparent legal structures, by themselves, may be insufficient to prevent or discourage corruption.

  • Corporate fraud and information asymmetry in emerging markets. Case of firms subject to enforcement actions in Malaysia

    Purpose
 The purpose of this study is to examine changes in firms’ level of information asymmetry in emerging market of Malaysia for the period of 2000-2016. Specifically, the study focuses on changes in the quoted spread and quoted depth following the fraud announcement.
 Design/methodology/approach
 The study uses a unique set of fraud sample using enforcement action releases (EARs) identified from the Security Commission of Malaysia and Bursa Malaysia. To estimate the result, the authors use event study methodology, OLS regression and simultaneous model on a set of 67 fraudulent firms.
 Findings
 The results of event study, OLS regression and simultaneous equation models suggest that information asymmetry increases on fraud discovery. The authors also use the analysis on subsamples classified by the type of regulator (who issued the enforcement release) and type of fraud committed. However, the authors find no evidence of a difference in information asymmetry across these groups. Overall, the results support the reputational view of fraud that it damages the firms’ reputation and increases uncertainty in the capital market.
 Research limitations/implications
 These findings provide valuable insights into understanding the information asymmetry around fraud announcements, especially for Malaysia, where the majority of the public-listed companies are family-controlled and under significant state control. The results of this study call for the active role that regulators can play to achieve a transparent and liquid capital market.
 Practical implications
 The research has practical implications. Specifically, for Malaysia, fraud is the primary area for National Results Areas (NKRA) in the Government Transformation Program (GTP). Therefore, for regulators and policymakers to ensure a liquid and transparent capital market, identifying the factors that elicit the fraudulent behavior and improving the related governance mechanism are necessary steps to prevent the fraudulent practices.
 Social implications
 Due to increased information asymmetry on fraud announcements, the demand for equity decreases that may affect not only the fraudulent firms but also results in negative externality for non-fraudulent firms, thus impairing their ability to fund equity.
 Originality/value
 A significant majority of studies have focused on corporate frauds in developed countries such as the USA that is characterized by dispersed ownership system and a strong capital market. One of the vocal critics of the agency theory is that it neglects the social and institutional framework within which companies operate. In emerging markets, such as Malaysia, the published academic papers on fraud and information asymmetry are very limited. As emerging markets practice different cultures, corporate governance mechanisms and market regulations, the study is significant to investigate the behavior of investors in such markets.

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