Journal of Financial Crime

Emerald Group Publishing Limited
Publication date:

Latest documents

  • Editorial: Not your ordinary conference!
  • Belt and Road Initiative: the interplay between corruption, plea-bargaining and civil alternative dispute resolution

    Purpose: This paper aims to determine whether a connection can be formed between corruption, plea-bargaining and civil alternative dispute resolution. Design/methodology/approach: Academic articles and textbooks are examined as are relevant reports by various academic institutions. Findings: Despite the similarities between plea-bargaining and civil alternative dispute resolution, the differences between the two overwhelmingly supersede their similarities. As such, there is unlikely to be an interplay between corruption, criminal plea-bargaining and civil alternative dispute resolution. Research limitations/implications: There are limited data available in relation to the prevalence of corruption activities by Chinese officials within the Belt and Road Initiative. Any discussions within this study is based on the impressionistic observations of the author, which may not reflect the true state of affairs in China. Practical implications: Those who are interested in examining the relationship between the criminal plea-bargaining and civil alternative dispute resolution will have an interest in this topic. Originality/value: The value of the paper is to demonstrate the difficulties in cross-fertilizing criminal law procedures with civil dispute resolution.

  • Editorial: The Court of Justice of the European Union and the beginning of the end for corporate transparency?
  • Editorial: The show must go on!
  • Editorial: Frameworks to address other issues could help us better tackle financial crime
  • Fraud in startups: what stakeholders need to know

    Purpose: This paper aims to explain the fundraising and valuation processes of startups and discuss the conflicts of interest between entrepreneurs, venture capital (VC) firms and stakeholders in the context of startup corporate governance. Further, this paper uses the examples of WeWork and Zenefits to explain how a failure of stakeholders to demand an external audit from an independent accounting firm in early stages of funding led to an opportunity for fraud. Design/methodology/approach: The methodology used is a literature review and analysis of startup valuation combined with the Fraud Triangle Theory. This paper also provides a discussion of WeWork and Zenefits, both highly visible examples of startup fraud, and explores an increased role for independent external auditors in fraud risk mitigation on behalf of stakeholders prior to an initial public offering (IPO). Findings: This paper documents a number of fraud risks posed by the “fake it till you make it” ethos and investor behavior and pricing in the world of entrepreneurial finance and VC, which could be mitigated by a greater awareness of startup stakeholders of the value of an external audit performed by an independent accounting firm prior to an IPO. Research limitations/implications: An implication of this paper is that regulators should consider greater oversight of the startup financing process and potentially take steps to facilitate greater independence of participants in the IPO process. Practical implications: Given the potential conflicts of interest between VC firms, investment banks and startup founders, the investors at the time of an IPO may be exposed to the risk that the shares of the IPO firms are overvalued at offering. Social implications: This study demonstrates how startup practices can be extended to the Fraud Triangle and issue a call to action for the accounting profession to take a greater role in protecting the public from startup fraud. This study then offers recommendations for regulators and standards entities. Originality/value: There are few academic papers in the financial crime literature that link the valuation and culture of startup firms with fraud risk. This study provides a concise explanation of the process of valuation for startups and highlights the considerations for stakeholders in assessing fraud risk. In addition, this study documents an emerging role for auditors as stewards of proper valuation for pre-IPO firms.

  • Strengthening financial integrity in Nigeria: the national identification harmonization project

    Purpose: Nigeria needs to improve its national identification coverage to support improved anti-money laundering and combating of financing of terrorism and proliferation (AML/CFT) measures. This study aims to examine its ongoing identification harmonization project, which seeks to create a central database for digital identification across designated entities. It identifies the key stakeholders in the project, progress to date as well as key challenges, especially relating to the inclusivity and privacy and data protection concerns of the current scheme to provide national identification numbers. Design/methodology/approach: The authors apply a doctrinal research methodology and use the Principles on Identification for Sustainable Development to identify and reflect on key challenges. Findings: The national identification harmonization project and the ongoing drive to register National Identity Numbers for Nigerians could provide valuable support for more effective and efficient AML/CFT identity verification and authentication. The project and processes, however, hold significant risks in relation to data protection. These are exacerbated by the absence of a comprehensive data protection framework. National identity data can be vulnerable to political abuse and targeting by bad actors. National identity data systems must, therefore, be protected by clear, fair and comprehensive privacy and data protection rules and appropriate and accountable governance mechanisms. While Nigeria is adopting and implementing the relevant framework, the NIMC can do more to advance data protection by supporting informed consent and compliance by all participants and publishing this information to build public trust in the system. It can also be disciplined about only collecting minimal and necessary personal data and printing only basic personal details such as name and age on the general multi-purpose ID card. The NIMC should furthermore improve access to the national identification number by streamlining the process of registration, including supporting same day registration and on-the-spot card printing; setting up more registration points as well as mobile registration to cut down queues; and increasing the range of registration agents and points to include schools, police stations and health facilities. Consideration for social, cultural and religious norms is also vital to appropriately accommodate the variety of groups and cultures in Nigeria. Research limitations/implications: Research materials include government policy documents as well as newspaper articles and reports on more recent developments and experiences that are not yet reflected in more formal documents. The research materials, however, reflect both the intention of the government and the reported experiences of those registering for a National Identification Number. Practical implications: This study identifies the practical steps that can be taken to enhance data protection and increase the inclusivity of the measures to provide Nigerians with National Identification Numbers. Social implications: The recommendations that are made are aimed at increasing the inclusivity of the National Identification Number scheme and at providing improved protection of personal data of applicants for, and holders of, these numbers. Originality/value: This study contributes to the policy discussion around the national identification harmonization project by applying as a lens key elements of the Principles on Identification for Sustainable Development that are relevant from a financial integrity perspective.

  • Editorial: The ascent of green crime: exploring the nexus between the net zero transition and organized crime
  • Editorial: The ascent of green crime: exploring the nexus between the net zero transition and organized crime
  • Forensic accounting tools for fraud deterrence: a qualitative approach

    Purpose: The purpose of this paper is to understand if forensic accounting techniques and tools could contribute to the deterrence of fraud in financial statements, considering the expertise of forensic accountant on ex post activities and that the traditional mechanisms to prevent this type of fraud have not been sufficient to stop the impact on companies, investors, auditors, employees and on society in general. Design/methodology/approach: This research was carried out using a qualitative exploratory study with a phenomenological approach conducted through in-depth interviews with professional experts in the forensic field. Findings: The findings confirm that the use of forensic accounting techniques and tools could contribute to the prevention of fraud in financial reporting not only when the risk of fraud has been materialized. Similar studies, about fraud prevention addressing the situation under a qualitative approach from the perspectives of its protagonists, have not been observed in the bibliographical review, so this research contributes to expanding the scientific research, the study and practice of forensic accounting. Originality/value: From a business management perspective, this study contributes a paradigm shift from the traditional ex post forensic auditing activity toward an ex ante activity to improve management control systems within organizations anywhere in the world. Because this study is guided to prevent fraudulent financial statements, other fraud categories such as misappropriation or corruption could be addressed in other studies and various countries.

Featured documents

  • Money, morals and motives. An exploratory study into why bank managers and employees commit fraud at work

    Purpose: – The purpose of this paper is to look in more depth at what motivates bank managers and bank employees to commit fraudulent offences at work. Design/methodology/approach: – This exploratory study adopts both quantitative and qualitative methods to better comprehend what motivates bank...

  • The fight against corruption in Portugal: evidence from sustainability reports

    Purpose: – The purpose of this paper is to analyse the disclosure of information on the fight against corruption in the sustainability reports of Portuguese companies. Design/methodology/approach: – Anti-corruption disclosure in the sustainability reports for 2009 of Portuguese firms, published on ...

  • “Gossip boys”: insider trading and regulatory ambiguity

    Purpose: – The purpose of this viewpoint, case study analysis paper is to assist in understanding how history repeats itself in the case of insider trading, even with regulatory intervention. Design/methodology/approach: – Qualitative methodology approach, using interviews of some of the watchdogs ...

  • 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...

  • Cryptocurrencies: an unconventional challenge to the AML/CFT regulators?

    Purpose: – The purpose of the article is to look closely at the phenomenon of the cryptocurrencies such as and bitcoin to identify their potential vulnerabilities to money laundering and financing of terrorism. It also explores their specific characteristics relevant to ML/FT risks. Design/methodol...

  • A model for preventing corruption

    Purpose: This paper aims to investigate the extent of corruption globally, explains its social and economic consequences and introduces a model, composed of corporate governance mechanisms, internal controls and red flag analyses, which organizations can apply to prevent corruption. Design/methodol...

  • Asking the right questions? Addressing corruption and EU accession. The case study of Turkey

    Purpose: Turkey is currently a candidate for accession to the European Union (EU), and one of the pre‐conditions is to address corruption. Turkey is also a member of the Council of Europe and subject to the GRECO peer‐review process on corruption. Various quantitative and quantitative surveys rank...

  • Consumer identity theft prevention and identity fraud detection behaviours

    Purpose: The purpose of this paper is to investigate consumer behaviour as it relates to identity theft and fraud. Design/methodology/approach: Using survey data, this paper models the relationship between past experience of consumers and their levels of concern, and derives the principal...

  • The role of boards in preventing economic crime

    Reviews the progress in implementing better governance in companies worldwide; company boards have a vital role to play in this. Examines how the typical board functions in a commercial company, including the interests that make it up: shareholders and other stakeholders, executives and...

  • Non-compliance of licence holders towards disclosure based regulation in Malaysian securities markets

    Purpose: The purpose of this paper is to examine non-compliance of licence holders towards disclosure-based regulation in Malaysian securities markets in relation to the implementation of the disclosure-based regulation. Design/methodology/approach: This survey was conducted among 107 principal...

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