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Dimitrijevic, Dragomir; Jovkovic, Biljana; Milutinovic, Suncica
2021 Journal of Financial Crime
This study aims to investigate what are the capabilities and limits of external audit in detecting frauds in companies operating in the territory of the Republics: Serbia, Croatia, Macedonia and Bosnia and Herzegovina.Design/methodology/approachIn total, 51 certified auditors from Serbia, Croatia, Macedonia and Bosnia and Herzegovina were surveyed to analyze what are the most frequent warning signals of the existence of the frauds auditors encounter during the verification of company’s financial statements.FindingsThe study indicated that the auditors of the Republic of Serbia more often encountered groundless overstatement of revenues compared with other countries, while regarding manipulative representation of inventories, the largest mean value and median are still among the auditors of the Republic of Serbia.Practical implicationsBased on the research results, it can be concluded that it is necessary to expand the legal obligation and power of external auditors when, in financial statement auditing, they come to clear findings that indicate fraud. Expansion of external auditors’ powers would reduce their current limitations and expand the domain of action.Originality/valueLimitations in external auditors’ work prevent the processing of frauds. However, auditors’ analysis of financial statements and pointing to potential irregularities can be a good manner for the early detection and prevention of frauds in company’s operations.
Lokanan, Mark Eshwar; Liu, Susan
2021 Journal of Financial Crime
This study aims to examine the demographic factors of investors, contributing to financial victimization that occurs in Canada from June of 2008 to December of 2019.Design/methodology/approachIn all 235 cases disclosing the details of financial crime victims are collected from the Industry Regulatory Organization of Canada (IIROC) enforcement platform between June of 2009 and December of 2019 for the analysis. The study used a descriptive analysis to showcase the demographic characteristics of investors who have been victims of financial crimes in Canada.FindingsThe findings indicate that these investors of age 60 and above were more likely to fall prey to various types of financial crime. The results also disclosed that retirees and investors with limited investment knowledge increase the probability of being vulnerable to the perpetrators than others.Research limitations/implicationsOverall, the study helps regulators in the securities industry gain insights into demographic portraits of the more vulnerable investors. Hence, more precautionary measures could pitch into these concerns to protect specific subsets of investors from investment fraud.Originality/valueIndividuals who are more vulnerable to investment fraud might not be entirely comparable with the stereotypical victims that most studies portray. The research gap could cause individual investors who appear to be at lower risk to unconsciously fall prey to investment fraud. The IIROC study, detailing the demographic factors of victims, can fill the gap and improve understanding of the tendency of victims.
2021 Journal of Financial Crime
The purpose of this paper is to critically examine the Economic and Financial Crime Act 2004 to investigate whether there are defects in the 2004 Acts which enable abuse of the system by those who are responsible for fighting corruption and other economic crimes in Nigeria.Design/methodology/approachThe paper adopts qualitative methods of research. The research studied the laws and regulations relevant to the recovery and management of proceeds of crime. However, personal experience of the author in the civil service, security and law enforcement accounts significantly.FindingsThe paper finds that the provisions of the EFCC Act 2004 relevant to the recovery of proceeds of crime and management of recovered assets are defective. The 2004 Act contains loopholes that enable mismanagement and diversion of recovered assets for personal use. Although the EFCC Act empowers the Minister of Justice to issue Regulations to regulate the activities of the EFCC, the Asset Tracing, Recovery and Management Regulations 2019 the Minister of Justice issued cannot be used to close the loopholes. Thus, there is an urgent need to amend the EFCC Act 2004.Research limitations/implicationsNon-availability of data on the mismanagement of seized and recovered assets is a severe limitation. Thus, analysis in this research focuses on the laws and regulations to illustrates the defects in the 2004 Act. Also, the study could only use reported cases and incidence of corruption among the security and law enforcement to illustrate unsuitability of security and law enforcement for the position of the chairman of the EFCC.Originality/valueThere is no comprehensive work that examines the defects of the provisions of the 2004 Act that breeds lack of transparency in the recovery of proceeds of crime as well as mismanagement of recovered assets. Therefore, this paper is of value to the Nigerian Government and the National Assembly in considering amendments to the EFCC Act 2004. The paper is also of importance to researchers.
Alawamleh, Kamal Jamal; Abu Helo, Shadi Helo
2021 Journal of Financial Crime
This study aims to examine the application of the fraud exception to the autonomy principle that governs the work of letters of credit in both Jordanian and English law. While it has been reiterated that the application of such exception before the English courts is difficult, this study highlights and critically analyzes some of the reasons that lie behind such a difficulty. Moreover, this study compares the English approach with the Jordanian approach to this specific area of law to find out what each can benefit from the approach of the other. The extent to which both approaches have been successful in applying such an exception will be examined thoroughly in this paper.Design/methodology/approachTo examine how effective is the approaches followed by the English and Jordanian Courts in applying the fraud exception in this context, this work makes use of the secondary data available in this regard as the main method to complete such an examination. By critically analyzing and comparing the various data contained in these sources, this work identifies the problems associated with such approaches.FindingsThis work suggests that while the autonomy principle in letters of credit has what shall maintain its role as an important principle, the fraud exception application shall be facilitated. It further submits that the English Courts attitude to this specific area of law is somehow ambiguous and intertwined as it does not distinguish between two different stages that are existent in this context, namely, the submission of the documents stage “the prerequisite” that in case of submitting genuine, truthful and complying documents would activate the autonomy principle and the following stage which starts after activating the autonomy principle and which to it a fraud exception can be applied.Originality/valueThis work proposes that a beneficiary of a letter of credit shall satisfy a prerequisite before it can be said that he is protected under the autonomy principle. Such a prerequisite dictates that he shall submit genuine, truthful and complying documents to activate the autonomy principle and once the beneficiary submits such documents it can be said that the autonomy principle, which fraud is an exception to it, has been activated. Furthermore, this work proposes that English Courts shall adopt an approach similar to the Jordanian approach in relation to the application of the fraud exception, whereas the latter requires proving neither the beneficiary’s fraudulent intent nor his knowledge of it but rather applies a more realistic test concerned merely with the goods’ quality and quantity.
2021 Journal of Financial Crime
The purpose of this paper is to examine how much the basic tenets of conscious capitalism could favor organizational change and anticorruption strategies.Design/methodology/approachThe paper questions the vagueness of the tenets and principles of conscious capitalism. It unveils the idealized worldview of conscious capitalism, as it is based on a “pseudo-humanistic and pseudo-holistic” philosophy. The paper analyzes various kinds of rationale for justifying anticorruption measures and explains how the conscious capitalism movement should assume the challenge to develop one or the other rationale.FindingsThe conscious capitalism movement does not have basic rationale for any self-justified discourse about anticorruption measures. The principles of conscious capitalism organizations can be coherent with a rationale of individual and organizational compliance. They could be suitable with a rationale of legal, industry and international compliance. We could expect that the principles of conscious capitalism allow radical changes in the organizational culture. However, the main principles of conscious capitalism are not explicitly related to any rationale for a corporate self-justified discourse about anticorruption measures.Research limitations/implicationsThe three kinds of rationale for corporate self-justified discourse about anticorruption measures are not exhaustive. There can be other kinds of corporate rationale. Moreover, the conscious capitalism movement appeared in 2000s and is still evolving. So, we should never take for granted that the present ideals and principles of conscious capitalism will never be improved and deepened.Originality/valueThe paper explains how the conscious capitalism movement remains unable to present its rationale for justifying anticorruption measures. In doing so, it provides three kinds of rationale that conscious capitalism organizations could use to develop their corporate self-justified discourse about anticorruption policies, measures and programs.
Benedetti, Hugo; Nikbakht, Ehsan; Sarkar, Sayan; Spieler, Andrew Craig
2021 Journal of Financial Crime
The purpose of this paper is to develop conceptual designs for blockchain implementations aimed at reducing corporate fraud. The proposed framework consists of different levels of implementation with specific examples for each level.Design/methodology/approachThe paper uses a multi-level framework to highlight the properties of blockchain technology as suitable for reducing corporate fraud. The five levels of technological complexity designed for this research include information storage, information flow, information processing, information enhancement and information and financial integration. Specific cases of corporate fraud are discussed to complement the proposed methodology.FindingsThe potential ability to limit fraud and increase transparency could greatly improve faith in financial reporting. These benefits accrue to all capital market participants. The blockchain infrastructure can significantly improve the existing monitoring system and provide value added in detecting, deterring, and documenting possible fraud.Originality/valueThe paper contributes to the growing field on corporate fraud and blockchain technology. The paper is novel in the implementation of the nascent blockchain methods to detect and deter fraud at the organizational level. The proposed five conceptual levels provide practical use.
2021 Journal of Financial Crime
Cressey’s Fraud Triangle has been referenced in 8,584 studies and academic papers [1] and is a stalwart of training courses for accounting and audit practitioners and fraud investigators. The Fraud Triangle has endured for three decades in the academic and practitioner worlds. This study aims to explore the origins of Cressey’s Fraud Triangle and challenge its practical value to a fraud investigator.Design/methodology/approachThis study has developed from analysis of a targeted literature review carried out as part of a wider study into occupational fraud and corruption.FindingsCressey’s name is intrinsically linked to the Fraud Triangle, although he never used the expression during his lifetime. Two of the three motivational factors identified by Cressey (1953) were developed from the earlier work of Svend Riemer (1941), who it is suggested should have equal billing with Donald Cressey for the concepts that led to the creation of the Fraud Triangle.Practical implicationsThe paper illustrates the limitations of Cressey’s Fraud Triangle for practitioners.Originality/valueMany academics and researchers have either misunderstood Cressey’s role in the development of the Fraud Triangle or been unaware of its true origins. Although the pioneering work of Riemer is referenced in a 2014 study on the Fraud Triangle by Alexander Schuchter and Michael Levi, to the best of the authors’ knowledge, this paper is the first to identify the influence of Riemer on Cressey’s thinking and the development of the Fraud Triangle.
2021 Journal of Financial Crime
The purpose of this paper is to examine the association between audit report lag (ARL) and tax avoidance and test whether external auditor type affects this relationship.Design/methodology/approachARL is measured as the number of days from fiscal year-end to the date of the auditor’s report, while tax avoidance is measured using effective tax rate.FindingsUsing a sample of 45 South African companies over the period of 2010–2013, the authors document that ARL is positively associated with tax avoidance and this relationship remains positive when the company is audited by a Big-4 audit firm and not significant when the company is audited by a non-Big-4.Originality/valueThe authors’ findings have important implications for auditors aiming to reduce audit risk as they may consider the impact of tax avoidance and pay more attention to companies with a high degree of tax avoidance.
Orth, Caroline de Oliveira; Maçada, Antônio Carlos Gastaud
2021 Journal of Financial Crime
This paper aims to investigate how the literature has been addressing the relationships between corporate fraud and executive behavior and corporate fraud and information technology (IT) controls.Design/methodology/approachA systematic literature review was performed following the planning phases proposed by Levy and Ellis (2006), illuminated by the research onion, developed by Saunders et al. (2007).FindingsThe main findings of the studies analyzed refer basically to models to assess the risk of fraud. These risks originate from the market, from the organization itself or from individuals and also from their relationship networks. Subsequently, the main risks identified by the authors were classified according to their origin, the main theories approached and the “solutions” for the risks presented by the authors as the product of their work.Research limitations/implicationsIt should be noted that this study is not free of limitations, of which two stand out: the full body of articles on the subject was certainly not evaluated. Although the search has been systematic and judicious both by the combination of keywords for the searches, as well as by the use of the main databases and also by the rigor in the description of the procedures and the analysis of the articles in the light of Research Onion was based on the authors’ knowledge that may have been limited in some respect.Practical implicationsAs a practical implication, there is the relationship of red flags and their classification by origin, as they can be very useful for planning the work of internal and external auditors.Social implicationsIt is considered that this work can be a starting point for scholars who are interested in the corporate fraud phenomenon, given that the data was collected and organized systematically.Originality/valueThe analysis of the articles in relation to Research Onion shed light on the main philosophical and methodological characteristics of the studies. Also, regarding the relationships between corporate fraud and IT controls, existing scientific research appears to be limited. Searches for the terms information technology and information systems were extended, as well as search strings tested with the terms data governance and IT governance without results. This fact demonstrates that there may be (as far as the results have reached) a vast area of research on corporate fraud in the field of systems knowledge and information technology.
2021 Journal of Financial Crime
Thirty years after its creation, the Financial Action Task Force (FATF) has become a prime example of a norm-building process that transcends the traditional avenues of public international law, while compelling a high level of compliance and assuring quick adaptation to norms and practices that better address money laundering and the financing of terrorism in their evolving form. On the occasion of FATF’s 30th anniversary, this paper aims to revisit the unique characteristics of FATF and the factors behind FATF’s success as standard-setter and as implementation-reviewer in the anti-money laundering (AML)/CFT context.Design/methodology/approachThis paper draws on primary sources of law, legal scholarship, reports and other open source data to analyse the FATF norm-building process and the factors behind its success.FindingsThirty years after its creation, the FATF has established itself as the key standard-setter, implementation-reviewer and force for reform in the AML/CFT context. Though the FATF norm-building process has been very successful, owing to its flexibility, adaptability and expansiveness, significant challenges lay ahead due to the evolving nature of money laundering and financing of terrorism.Originality/valueThis is a comprehensive study examining the achievements, impact, strengths and weaknesses of the FATF norm-building process on the occasion of the organisation’s 30th anniversary.
2021 Journal of Financial Crime
The purpose of this paper is events and analysis of present a hedge fund collapse, offer lessons to investors and hedge fund industry stakeholders and propose a possible remedy for mitigating operational risks and associated potential losses.Design/methodology/approachThis study focused on one hedge fund case study and conducted a thorough investigation of the events that led to the collapse and eventual filing of the Securities and Exchange Commission (SEC) complaint. All articles and publications used for this research are available in the public domain and accessible.FindingsWood River Capital Management had concentrated the portfolios of its two hedge funds into one stock, EndWave Corp. Fund Manager violated terms of offering memorandum. Investors were not made aware of and did not discover the operational risks. Stock price of EndWave plummeted. There was no independent oversight over the funds. The values of the two funds dropped significantly. Investors attempted to redeem but the funds were not liquid. The SEC filed a complaint. Mr Whittier was sentenced for three years in jail.Research limitations/implicationsIt is an analysis of US-based hedge fund, not an empirical paper. The article presents critical analysis and offers many valuable lessons to hedge fund industry stakeholders.Practical implicationsThis paper helps investors in terms of identifying a hedge fund’s operational risks and conducting more effective due diligence while vetting a hedge fund. This could potentially save investors and constituents billions of dollars, by avoiding potential hedge fund collapses. This paper suggests that the scope of fiduciary duty be expanded to cover hedge fund industry vendors.Originality/valueThorough research of a hedge fund that collapsed because of poor investment decisions, not self-enrichment at expense of fund investors. This paper provides lessons to investors in terms of identifying a hedge fund’s critical operational risks and conducting value preserving due diligence. This could potentially save hedge funds investors billions of dollars, by avoiding potential hedge fund collapses. This paper recommends that the scope of fiduciary duty be expanded to cover hedge fund industry vendors.
2021 Journal of Financial Crime
This paper aims to challenge some of the underlying concepts about causation of fraud and in doing so enriches knowledge and insight into the management of fraud.Design/methodology/approachThis study is a part of fieldwork carried out in Indonesia.FindingsOrganisational fraud is an exceptional type of crime. Hence, the underlying antecedents and consequences of fraud in organisation are distinct from other crimes, especially violent crimes. The underlying logic in criminological and sociological theories and literature cannot fully explain the causal factors of fraud in the organisation. This leads to a theoretical discussion about the reconstruction of the fraud theory. Implications and suggestions for further studies are discussed in this study.Originality/valueThis study provides a new understanding of fraud and its antecedents and consequences. In doing so, it examines the long-standing debate in criminology and sociology about the theories concerning crime causation, as these areas provide the underlying logic of fraud theory.
Md Nasir, Noorul Azwin; Hashim, Hafiza Aishah
2021 Journal of Financial Crime
This paper aims to review the performance of corporate governance practices in Malaysia from the beginning of the 21st century until recently. This paper also highlights the history of corporate governance practices in Malaysia and the country’s financial statement fraud situation.Design/Methodology/ApproachMalaysia is a multi-ethnic society that requires managing corporations and firms collectively. Hence, corporate governance practices and good practices are compelled to fit society’s uniqueness. This paper used the survey findings generated from the Corporate Governance Watch Report (CG Watch Report) by the Credit Lyonnais Securities Asia and the Asian Corporate Governance Association from the year 2002 to the year 2018 and discussed the corporate governance performance related to financial statement fraud in Malaysia. The market ranking survey oversees five categories of corporate governance scores: rules and regulations, enforcement, political/regulatory environment, adoption of International Generally Accepted Accounting Principle and corporate governance cultureFindingsThe findings reported that firms in Malaysia have benefited from good laws and regulations through corporate governance reforms.Practical ImplicationsThis study’s findings are relevant to regulators, board members, shareholders, potential investors, analysts and others to produce more informative timely comparisons. Future research should consider analysing and comparing the corporate governance performance in Malaysia with the corporate governance performance of other countries in Asia.Originality ValueThis study summarized the findings generated from a periodical CG Watch Report from the year 2003 to 2018. This study also underlined the actions of responsible agencies and regulatory bodies determined to have a decent corporate governance practice in Malaysia, especially in minimizing financial statement fraud occurrence in the country.
2021 Journal of Financial Crime
The purpose of this study was to determine the influence of the elements of the fraud diamond theory in detecting financial statement fraud among non-financial firms in Kenya. Secondary data used to calculate ratios and figures representing the study variables was collected using a checklist for each of the targeted firms listed in the Nairobi Securities Exchange in Kenya for the 2013-2017 period.Design/methodology/approachSecondary data used to calculate ratios and figures representing the study variables was collected using a checklist for each of the targeted firms listed in the Nairobi Securities Exchange in Kenya for the 2013-2017 period. Convenience sampling technique was used to come up with a sample size of 35 out of the targeted population of 45 non-financial firms listed in Kenya (78% representation). This sample size was representative enough of the targeted population.FindingsThe results strongly supported that all the four elements of the fraud diamond triangle influenced financial statement fraud in Kenya. However, using three parameters, namely R2, predicted sign and standard error, to compare the applicability of either the Yoon et al. (2006) or the modified Jones (1991), our study findings are mixed. It is therefore imperative that a new model should be developed in detecting earnings management in the Kenyan context. Note that including other variables will to a greater extent increase the explanatory power in detecting earnings management practiced by non-financial firms listed in Kenya.Research limitations/implicationsUse of secondary information in the study was one limitation. Certain financial information was missing from some of the targeted firms’ official websites and the Nairobi Securities Exchange research handbooks. The researcher ensured that only non-financial firms whose audited financial statements were easily accessible were included in the study. Firms whose records were not readily available were excluded from the survey.Practical implicationsPractically, this study enables regulatory authorities in Kenya to understand the extent with which each element of the fraud diamond theory could be relied on in detecting financial statement fraud. Moreover, it will advise them on the areas to lay more emphasis when attempting to detect financial statement fraud using this model.Originality/valueThe main value of this study is the determination of the key elements of the fraud diamond theory, which have influence on financial statement fraud among non-financial firms listed in Kenya.
Madi, Nero; Joseph, Corina; Rahmat, Mariam; Janang, Jennifer Tunga; Haji Omar, Normah
2021 Journal of Financial Crime
The purpose of this paper is to investigate the extent of fraud prevention disclosure on the Malaysian public universities’ websites.Design/methodology/approachThe level of fraud prevention information disclosure was examined using content analysis of all 20 public universities in Malaysia based on the university fraud prevention disclosure index (UFPDi) previously developed by the authors’ research team.FindingsThe disclosures of eight aspects of fraud prevention policies, responses, initiatives and mechanisms were not satisfactory. Possible reasons could be because of lack of awareness and appreciation on the institutional mechanisms and lack of formal pressure from the relevant authority.Research limitations/implicationsData collection for analysis was conducted during a period of one month only due to rapid changes of the information on the websites.Social implicationsThe low level of disclosure using UFPDi will prompt the Malaysian public universities to take proactive actions in promoting transparent and good governance among the university staff hence assisting the government in addressing the fraud problem that is plaguing the nation.Originality/valueThis paper is an extension to the authors’ previous work on UFPDi. It further explains and highlights the extent of fraud prevention disclosures among academic institutions who are receiving financial resources from the government.
Ababio, Abraham Gyamfi; Gnonsio Mangueye, Arthur
2021 Journal of Financial Crime
Improving tax compliance would drive the needed development in Ghana. Small and medium scale enterprises (SME) constitute a sizable proportion of the Ghanaian economy but its contribution to tax revenue is below expectation. This study aims to determine whether SME's perception of state legitimacy affects tax compliance.Design/methodology/approachA structured questionnaire was administered to 200 SMEs randomly drawn from Dodowa in the Shai-Osudoku District of Greater Accra Region. Descriptive statistics and the Probit model with sample selection were used to analyse the data.FindingsThe study found that SME's perception of government legitimacy exerts a significant negative effect on reducing profit to avoid tax liability (ß = −0.0305, p < 0.05). Other factors such as education and fear of fines and penalties were also found to reduce the likelihood that the firm would reduce profit to avoid high tax liability. Still, tax knowledge had a positive effect on this behaviour.Practical implicationsThis study would help deepen policymakers' knowledge of how to improve tax compliance among SMEs in Ghana.Originality/valueThe originality of this work is that it explicitly models the role of fiscal exchange theory in explaining tax compliance among SMEs in Ghana by using robust methodology.
Amoh, John Kwaku; Awunyo-Vitor, Dadson; Ofori-Boateng, Kenneth
2021 Journal of Financial Crime
This study aims to assess customers’ awareness and level of knowledge on electronic banking fraud.Design/methodology/approachA well-structured interviewer-assisted questionnaire was used to collect data from 400 clients of a case study bank. Data were analysed using descriptive statistics. Kendall’s coefficient of concordance (W) statistic was also estimated to track and rank the fraudulent activities identified by the respondents with respect to electronic banking.FindingsThis study found that respondents were aware of most of the specific forms of electronic banking fraud. Firstly, automated teller machinfraud is the most common scam for which customers are aware of. Secondly, institutional factors such as lack of monitoring and education of clients are major factors which expose the bank and clients to fraudulent electronic banking acts. Thirdly, the most effective action that can be taken to prevent fraud in the bank is increased security and personal identification number (PIN) protection education.Research limitations/implicationsThis study focusses on a universal bank and uses data from customers of only one branch of the bank to achieve the research objectives.Originality/valueOne uniqueness of this paper is in the adoption of Kendall’s coefficient of concordance (W) statistic to track and rank fraudulent banking activities. The findings will allow financial institutions to know the forms of current and innovative electronic banking fraudulent activities that customers are aware of. It will also enable the banks to find ways to inform their clients about emerging electronic banking fraudulent activities to prevent them from falling victims.
Joseph, Corina; Omar, Normah Haji; Janang, Jennifer Tunga; Rahmat, Mariam; Madi, Nero
2021 Journal of Financial Crime
This paper aims to explain the development of fraud prevention disclosure index (FPDI) for Malaysian public universities.Design/methodology/approachThe paper reported a comprehensive review on fraud prevention and control plans of several international policies and of local and international universities.FindingsThe final 8 categories and 100 items under review have been developed in an instrument, the proposed FPDI, to measure the level of commitment of public universities in preventing fraud.Research limitations/implicationsThe FPDI will serve as an evaluation tool to measure the level of commitment of public universities toward preventing fraud practices through disclosure practices.Social implicationsThe FPDI is hoped to inculcate anti-fraud culture amongst public universities and to promote accountability, widen and strengthen good organization’s ethics, create ethical work place environment and enhance corporate governance framework by instilling a culture of professional conduct that is free from corruption.Originality/valueThis paper is among the first paper that develops the index specifically to measure the universities’ level of commitment to prevent fraud.
Sallal, Farqad; Bagherpour Velashani, Mohammad Ali; Saei, Mohammad Javad
2021 Journal of Financial Crime
The purpose of this paper is to study comparatively motivations for committing fraud in financial statements in two emerging markets including Iran and Iraq.Design/methodology/approachThe research is a descriptive survey and statistical population consists of independent auditors. The field survey and questionnaire were used for data collection.FindingsFindings can raise auditors’ awareness of management fraud motivations. It can help regulators and authorities in both countries as well as other emerging markets for establishing suitable rules and regulation.Originality/valueThis paper’s contribution was in identifying and comparing management’s motivations to commit financial reporting fraud in two emerging markets including Iraq and Iran.
Haruna, Abdulhadi Aliyara; Abu Bakar, Abu Sufian
2021 Journal of Financial Crime
This paper aims to examine the impact of interest rate liberalization on economic growth and the relevance of corruption in the five selected sub-Saharan African countries.Design/methodology/approachThe study used the modified version of Driscoll and Kraay’s model by Hoechle, which solved the effects of cross-sectional dependence and heteroscedasticity.FindingsThe findings reveal a positive impact of the index on economic growth, and it was found that foreign direct investment (FDI) and credit to private sector by banks (CPSB) all stimulate economic growth. The interaction terms of corruption with FDI and CPSB indicate negative effects that show how corruption erodes the benefits of liberalization. Finally, the paper recommends the pursuit of appropriate policies with the sole aim of eradicating corruption and providing a conducive environment for business.Originality/valueThe paper developed a composite domestic financial liberalization index to capture the timing and essential dimensions of the reform process. The study investigates the effect of interest rate liberalization on economic growth and the relevance of corruption. Most of the recent and past studies only examined the impact of interest rate reforms on growth without investigating the relevance of corruption.
2021 Journal of Financial Crime
This paper aims to examine the nature and operations of the two main Ponzi schemes (DKM Diamond Micro Finance Company and Menzgold Company Limited). It explores how such dubious schemes were able to circumvent financial regulatory bodies and their impact on the social, political and economic spheres of Ghana.Design/methodology/approachThe paper adopts both quantitative and qualitative research approaches and relies on secondary sources of data from the Bank of Ghana, World Bank and textbooks, etc.FindingsIt was found out that inadequate supervisory role by financial regulators was a factor that made these schemes thrive in Ghana which had dire consequences on the socio-economic of the country.Originality/valueThis is the first paper that explores the major Ponzi schemes in Ghana.
Akram, Tooba; RamaKrishnan, Suresh A.L.; Naveed, Muhammad
2021 Journal of Financial Crime
This study aims to diagnose the global key contributors in the stock market manipulation studies during the past four decades.Design/methodology/approachThe database search is based on the terms used in the existing body of knowledge. Using the bibliometric tools and techniques on the Scopus database, the study assessed and analysed the productivity of research studies, as well as the influence of the authors, publications, journals, affiliated institutions and countries.FindingsThis paper finds the USA as the leading country investigating this area, almost capturing 40% of the research studies in finance, moreover, a huge number of co-authors. Financial crises in the late 1990s and 2008 is observed as one of the main reasons for this intriguing research. The Journal of Finance is spotted as the most persuasive journal with the highest cite score and an unprecedented number of citations. The analysis of keywords engendered that most of the stock market manipulation studies are event-based studies. Seminally unique scientometric analysis revealed that the significance of stock market manipulation was mainly captured by event-based studies, insider trading and pump and dump schemes studies. However, much remained untapped to articulate the bridging scope of technology and media with stock market behaviour and manipulations.Research limitations/implicationsThe research only includes the Scopus database, however, incorporates 81% relevant study.Practical implicationsThis study reckons that technology-based manipulations are emerging themes in this research field which invites the applied research to have productive outcomes.Originality/valueThe intriguing study incorporates a maximum number of the relevant literature and used a comprehensive technique for the selection of dataset in Scopus.