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Article
Publication date: 30 August 2011

N. Sivakumar

The paper aims to discuss the management of financial market scandals using two different approaches – regulatory and values‐based.

Abstract

Purpose

The paper aims to discuss the management of financial market scandals using two different approaches – regulatory and values‐based.

Design/methodology/approach

The paper discusses the motivations behind financial scandals to occur and then explains in detail both the approaches. The paper first presents the elements of the regulatory approach. Using the teachings of Bhagavan Sri Sathya Sai Baba, the values‐based approach are delineated. The paper also compares the two approaches and identifies their respective utilities.

Findings

While both the regulatory and values based approaches have their own utilities; stressing the values‐based approach helps with preventing financial scandals on a sustainable basis.

Practical implications

The practical implication is that it is necessary to stress the evocation of human values among investors and capital market intermediaries so that scandals can be avoided.

Social implications

The social implication of the paper is that values evocation is very important to tackle the behavioural motivations behind financial scandals. Unless values are evoked, the root causes of financial scandals will not be removed. In such cases, regulation will have only a limited effect.

Originality/value

The paper uses the philosophy and teachings of Bhagavan Sri Sathya Sai Baba to develop value guidelines to prevent financial scandals.

Content available
Article
Publication date: 23 July 2021

Marco Bellucci, Diletta Acuti, Lorenzo Simoni and Giacomo Manetti

This study contributes to the literature on hypocrisy in corporate social responsibility by investigating how organizations adapt their nonfinancial disclosure after a…

Abstract

Purpose

This study contributes to the literature on hypocrisy in corporate social responsibility by investigating how organizations adapt their nonfinancial disclosure after a social, environmental or governance scandal.

Design/methodology/approach

The present research employs content analysis of nonfinancial disclosures by 11 organizations during a 3-year timespan to investigate how they responded to major scandals in terms of social, environmental and sustainability reporting and a content analysis of independent counter accounts to detect the presence of views that contrast with the corporate disclosure and suggest hypocritical behaviors.

Findings

Four patterns in the adaptation of reporting – genuine, allusive, evasive, indifferent – emerge from information collected on scandals and socially responsible actions. The type of scandal and cultural factors can influence the response to a scandal, as environmental and social scandal can attract more scrutiny than financial scandals. Companies exposed to environmental and social scandals are more likely to disclose information about the scandal and receive more coverage by external parties in the form of counter accounts.

Originality/value

Using a theoretical framework based on legitimacy theory and organizational hypocrisy, the present research contributes to the investigation of the adaptation of reporting when a scandal occurs and during its aftermath.

Details

Accounting, Auditing & Accountability Journal, vol. 34 no. 9
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 17 September 2021

Daniel W. Richards, Sarath Lal Ukwatte Jalathge and Prem W. Senarath Yapa

This paper researches the professionalization of financial planning in Australia. The authors investigate how the institutional logic of major institutions inhibits this…

Abstract

Purpose

This paper researches the professionalization of financial planning in Australia. The authors investigate how the institutional logic of major institutions inhibits this occupation from moving toward a professional status.

Design/methodology/approach

The study uses documentary analysis of government inquiries into Australian financial services from 1997 to 2017 to ascertain the various institutional logics relating to the professionalization of financial planning. The method involves generating ideas from the data and applying an institutional logic framework to make sense of impediments to the professionalization of financial planning in Australia.

Findings

The regulator adopted a self-regulation logic that empowered financial institutions to govern financial advice. These financial institutions have a logic of profit maximization that creates conflicts of interest in financial planning. The financial planning professional bodies adopted a logic of attracting and retaining members due to a competitive professional environment. Thus, financial planners have not been defined as fiduciaries, professional standards have not increased and an ineffective disciplinary resolution system exists.

Research limitations/implications

This research illustrates the various institutional logics that need to be addressed to professionalize financial planning in Australia. However, the data used is limited to that drawn from the parliamentary inquiries.

Originality/value

Prior research on the emergence of professions such as accounting has shown that financial institutions are sites of professionalization. This research shows that financial institutions impede professionalization in financial planning. Also, where the state granted legitimacy to other professions, this research indicates that the state regulator's logic of self-regulation has not legitimized financial planning.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 15 February 2011

David Brady, Katelin Isaacs, Martha Reeves, Rebekah Burroway and Megan Reynolds

Although women remain substantially underrepresented in the top echelons of large corporations, a non‐trivial presence of female executives has emerged in recent years…

Abstract

Purpose

Although women remain substantially underrepresented in the top echelons of large corporations, a non‐trivial presence of female executives has emerged in recent years. The purpose of this paper is to focus on the firm characteristics that predict the sex of the executive office holder, classifying the plausible firm characteristics that could explain the presence of female executives into four explanations: sector, size, stability, and scandal.

Design/methodology/approach

This paper provides perhaps the first large‐sample analyses of the sex of executive officers in Fortune 500 firms by analyzing a sample of 3,691 executives in 444 Fortune 500 companies.

Findings

In the paper's sample, 252 of the executives, or 6.4 percent of the sample, are women. The authors' analyses reveal that women are less likely to be chief executive officers and chief operations officers, but more likely to be chief corporate officers and general counsels. Female executives are somewhat less likely to be present in the construction sector, but there is evidence that they are more likely to be present in retail trade. Firms with greater assets and sales growth are less likely to have female executives. Using originally collected data, it is shown that firms that have experienced a scandal in recent years are more likely to have female executives. However, the nature and quantity of scandals do not have significant effects.

Originality/value

Ultimately, the authors' analyses reveal that key firm characteristics predict whether an executive office is held by a woman.

Details

Gender in Management: An International Journal, vol. 26 no. 1
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 10 June 2021

Thereza Raquel Sales de Aguiar

The purpose of this paper is to explore issues related to the use of financial accounting and reporting by discussing three interrelated areas: the theoretical…

Abstract

Purpose

The purpose of this paper is to explore issues related to the use of financial accounting and reporting by discussing three interrelated areas: the theoretical foundations, the framework and practicalities. The paper also discusses participatory and pluralistic approaches to accounting and corporate governance as alternatives to address some of these issues.

Design/methodology/approach

This is a narrative research based on deductive thematic analysis of secondary data. This study provides a general overview of the existing literature of the limits of the use of financial accounting and its impact on business and society.

Findings

In terms of the theoretical foundations, this paper contrasts financial accounting explained by agency theory and a dialogic accounting approach. The findings of this study emphasise the need to establish an accounting framework for the interests of the many (not the few) in conjunction and simultaneously with a participatory and pluralistic approach to corporate governance. Finally, this paper explores accounting for carbon emissions and recent financial accounting scandals to analyse the impact of the inappropriate use of financial accounting and reporting in business and society.

Originality/value

This paper provides an overview of the limits of the use of financial accounting by exploring its theoretical background, framework and practicalities. The paper also discusses the need for new accounting and corporate governance frameworks that allow a pluralistic and participatory approach to the decision-making of companies.

Details

Accounting Research Journal, vol. 34 no. 4
Type: Research Article
ISSN: 1030-9616

Keywords

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Article
Publication date: 8 May 2018

Veltrice Tan

In light of the recent 1MDB Scandal in Singapore, this research paper aims to examine the deterrent effect of Singapore’s sanctions against money laundering within…

Abstract

Purpose

In light of the recent 1MDB Scandal in Singapore, this research paper aims to examine the deterrent effect of Singapore’s sanctions against money laundering within financial institutions.

Design/methodology/approach

Case laws and legislations are examined as are relevant reports by regulators.

Findings

Singapore’s anti-money laundering (AML) regimes may not act as an effective deterrent against money laundering activities within financial institutions. This is due to the overreliance on the theory of deterrence-based thinking, the lack of an “enforcement pyramid” and economic factors which influence regulators to be lenient towards financial institutions.

Research limitations/implications

There are limited data available in relation to regulators in Singapore and the prevalence of money laundering activities within Singapore’s financial institution. Any discussions within this article is based on the impressionistic observations of this author, which may not reflect the true state of affairs in Singapore.

Practical implications

Those who are interested in examining the relationship between money laundering and the deterrent effect of sanctions against financial institutions will have an interest in this topic.

Originality/value

The value of the paper is to demonstrate that Singapore’s AML regimes may not act as an effective deterrence against money laundering activities within financial institutions.

Details

Journal of Financial Crime, vol. 25 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 26 March 2010

Chad Albrecht, Chad Turnbull, Yingying Zhang and Christopher J. Skousen

In recent years, many of South Korea's most prominent organizations have been involved in large‐scale frauds. These frauds have had a devastating impact on South Korean…

Abstract

Purpose

In recent years, many of South Korea's most prominent organizations have been involved in large‐scale frauds. These frauds have had a devastating impact on South Korean society and resulted in unnecessary suffering and high levels of unemployment for the middle class. With the aim of understanding the causes of these scandals, this paper takes an in‐depth look at the chaebol organization.

Design/methodology/approach

The paper takes a conceptual approach by first examining chaebols in greater detail. The paper then examines classical fraud theory, including the fraud triangle. The paper then examines chaebol organizations through the lens of the fraud triangle. By doing so, it is possible to understand why chaebols, in particular, are susceptible to fraud and corruption.

Findings

The paper provides evidence to suggest that chaebol organizations have inherent fraud risks. In order to minimize these fraud risks, chaebol organizations must address these issues.

Originality/value

This paper fulfills an important area of research by providing basic information about the relationship between chaebol organizations and fraud.

Details

Management Research Review, vol. 33 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

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Article
Publication date: 31 December 2015

Peter Yeoh

The purpose of this paper is to provide enhanced insights on corporate governance failures which contributed to various financial crimes in major banking institutions and…

Abstract

Purpose

The purpose of this paper is to provide enhanced insights on corporate governance failures which contributed to various financial crimes in major banking institutions and whether those involved have been held sufficiently accountable in the USA and the UK.

Design/methodology/approach

This interdisciplinary doctrinal research relies on primary and secondary data and is complemented by the case study approach.

Findings

Case insights demonstrate that a few major banks and isolated numbers of bankers at the lower echelons were held accountable in the USA but to a lesser degree in the UK. This contrasts sharply with the earlier Enron-type corporate financial reporting scandals or the much earlier Savings and Loans Crisis; but recent criminal charge practices against mega banks suggest a policy shift.

Research limitations/implications

The paper findings suggest the need for further research in this under-researched area, while the banking communities in the USA and the UK may be prompted to review their corporate governance practices.

Originality/value

This interdisciplinary research uses corporate law and criminological research to provide enhanced insights on financial crimes perpetuated in major banks in the USA and the UK.

Details

Journal of Financial Crime, vol. 23 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 1 April 2005

Dennis B.K. Hwang and A. Blair Staley

Seeks to analyze the impact of recent accounting and auditing failures in the USA on US accounting and auditing in China, focusing on the practice of guanxi – the networks…

Abstract

Purpose

Seeks to analyze the impact of recent accounting and auditing failures in the USA on US accounting and auditing in China, focusing on the practice of guanxi – the networks of informal relationships and exchanges of favors that dominate all business and social activities in Chinese societies.

Design/methodology/approach

Examines Chinese culture and uses historical precedents and parallels with Japanese culture to predict potential accounting and auditing problems.

Findings

Determines that guanxi has the potential to undermine the high standards of auditor independence, audit quality, and ethical behavior to which auditors must adhere.

Research limitations/implications

The review of Chinese culture and list of historical precedents is not exhaustive, and the standards are all US, which perhaps limits its usefulness elsewhere.

Practical implications

A very useful source of information on Chinese business behavior as it impacts accountants and auditors.

Originality/value

Enables policy makers and professional accountants to anticipate and predict how guanxi may threaten the progress made in improving financial management and reporting, and may undermine auditor independence, audit quality, and the quality of financial reporting.

Details

Managerial Auditing Journal, vol. 20 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 3 March 2020

Paula Rodrigues and Ana Pinto Borges

The purpose of this paper is to evaluate the effect of the scandals and distrust over the past years in brand love regarding a classic and well-known financial brand. The…

Abstract

Purpose

The purpose of this paper is to evaluate the effect of the scandals and distrust over the past years in brand love regarding a classic and well-known financial brand. The authors consider the antecedents of brand love contemplating the role of negative emotions, engagement and authenticity. The authors study the brand of a Portuguese bank, Caixa Geral de Depósitos, which was associated with harmful management and had to be intervened with monetary aid from the government.

Design/methodology/approach

An online questionnaire was used to collect data. The authors applied a confirmatory factor analysis and the hypotheses were tested by the structural equation modelling.

Findings

The results show that negative emotions toward the brand have a direct and indirect impact on brand engagement and the consumer-based brand authenticity, brand engagement and consumer-based brand authenticity positively impact brand love and negative emotions toward the brand positively and indirectly impact brand love.

Research limitations/implications

The results should be analyzed with appropriate caution, given the limitations of the sample. The authors used a sample of Portuguese consumers connected with a commercial bank brand. These limitations could be overcome in future research.

Practical implications

The findings are important for the definition of branding strategies in a competitive and vulnerable context.

Originality/value

The model presented in this paper aims at filing a gap in the literature. The negative emotions toward brands have been little studied as an antecedent. It is also the first time that the constructs of engagement and authenticity and their relational outcome in brand love are applied to a financial brand.

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