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1 – 10 of 465Ameya Lonkar, Sonali Dharmadhikari, Neha Dharurkar, Kanchan Patil and Ravi Ashok Phadke
This paper aims to present a study to measure “Consumer Preparedness” (CP) towards digital payment frauds by considering factors such as awareness regarding fraud risk…
Abstract
Purpose
This paper aims to present a study to measure “Consumer Preparedness” (CP) towards digital payment frauds by considering factors such as awareness regarding fraud risk (“Awareness”), implementation of measures (“Protection”) and actions to be taken in case of fraud (“Responsiveness”).
Design/methodology/approach
This study reviews existing literature to understand various typologies of digital payment fraud. The data of 372 consumers was collected using a structured questionnaire. The data was analyzed using analysis of variance (ANOVA) and Chi-square. CP score was calculated based on awareness score, protection score and responsiveness score.
Findings
The study shows that the score for the level of awareness was low, for the level of protection was moderate and for the level of responsiveness was high, leading to an overall moderate level of preparedness. Further, a moderate association was observed between demographic factors and the level of preparedness.
Practical implications
The authors recommend proactive and reactive measures for Central Banks regarding central fraud registry and intelligence exchange, consumer fraud vulnerability assessment model and mandating fraud risk management controls. Further, financial institutions are recommended to permit payment from registered devices only, implement strong customer authentication (including biometric authentication) and conduct periodic awareness sessions.
Originality/value
The existing body of knowledge does not have a model or scoring mechanism to assess the preparedness of consumers to tackle digital payment fraud. The research paper adds a classification of fraud typologies and an exploratory approach to measure the CP score.
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Domenico Campa, Alberto Quagli and Paola Ramassa
This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.
Abstract
Purpose
This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.
Design/methodology/approach
This literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.
Findings
The study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.
Research limitations/implications
This study outlines directions for future accounting research on fraud.
Practical implications
The analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.
Originality/value
This study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.
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Rushmila Bintay Rafique and Tamara Joan Duraisingam
The purpose of this paper is to focus on managing the risk of fraud in commercial letters of credit (LC) in Bangladesh involving three parties: the seller, the buyer and the bank…
Abstract
Purpose
The purpose of this paper is to focus on managing the risk of fraud in commercial letters of credit (LC) in Bangladesh involving three parties: the seller, the buyer and the bank. It addresses the severity of LC fraud, the banks’ actions when detected and the preventive measures the relevant parties can adopt.
Design/methodology/approach
This research uses doctrinal and qualitative methods to propose strategic actions that benefit buyers, sellers, banks, legal professionals and judges. The study aims to explore the modus operandi used by fraudsters through thematic analysis.
Findings
The study’s findings reveal that LC fraud has escalated to a concerning level, posing a significant threat to the economic stability of Bangladesh. Measures must be taken to mitigate this risk and safeguard the country’s financial integrity. To effectively combat the risk of LC fraud, the updated version of UCP must include specific and detailed guidelines on LC fraud. This study recommends preventative measures that all parties involved must take to reduce the likelihood of fraud significantly.
Research limitations/implications
Due to a lack of LC experts, the participant sample for the study in Bangladesh was limited. Nevertheless, most banking participants were highly distinguished and held the Head of Trade Finance Department position in commercial banks. A few academics and legal practitioners with LC expertise also participated in the study.
Originality/value
It provides cutting-edge solutions to effectively handle LC fraud risk and provides proactive measures to prevent it.
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Mubarik Abdul Mumin, Ibrahim Osman Adam and Muftawu Dzang Alhassan
This study aims to investigate the influence of information and communication technology (ICT) capabilities on supply chain fraud and sustainability within the context of Ghana’s…
Abstract
Purpose
This study aims to investigate the influence of information and communication technology (ICT) capabilities on supply chain fraud and sustainability within the context of Ghana’s small and medium-sized enterprises (SMEs). Additionally, the research explores the mediating role of supply chain fraud in the relationship between ICT capabilities and supply chain sustainability.
Design/methodology/approach
Data were collected from 102 respondents within Ghana’s SME sector, and the research employed the dynamic capability theory as the conceptual framework. The study utilized partial least squares-structural equation modeling (PLS-SEM) to develop and analyze the proposed model.
Findings
The results of the study reveal a significant reduction in supply chain fraud attributable to enhanced ICT capabilities within Ghanaian SMEs. Moreover, ICT capabilities exert a significant positive influence on supply chain sustainability. Importantly, supply chain fraud emerges as a mediator, elucidating its role at the nexus of supply chain sustainability and ICT capabilities.
Originality/value
This research contributes to the limited body of evidence on the interconnectedness of ICT capabilities, supply chain fraud and supply chain sustainability, particularly within the context of Ghanaian SMEs. Notably, this study pioneers an examination of the mediating impact of supply chain fraud on the relationship between ICT capabilities and supply chain sustainability.
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This study aims to investigate Bangladesh’s e-commerce regulations in light of the growing criticism that they are insufficient to curb predicate crimes like fraud and money…
Abstract
Purpose
This study aims to investigate Bangladesh’s e-commerce regulations in light of the growing criticism that they are insufficient to curb predicate crimes like fraud and money laundering in the online marketplace.
Design/methodology/approach
This study used the exploratory design to examine the latest ministerial directives and laws governing e-commerce in Bangladesh to determine why they cannot prevent fraudulent activities in this promising sector and identify potential solutions.
Findings
Bangladesh’s regulatory responses to e-commerce fraud prevention and detection are reactive and inadequate. Regulators are unwilling and unable to enforce available legal provisions for various reasons, including a lack of knowledge and coordination among the agencies.
Research limitations/implications
This paper focuses solely on the legal and regulatory framework in place to combat e-commerce fraud. Other critical issues, such as consumer rights, privacy and data protection in e-commerce, are not addressed.
Practical implications
The findings of this study will assist policymakers in revising current regulatory approaches to e-commerce to protect this sector from criminal abuse.
Originality/value
This study looked into the possibility of using a proactive risk-based approach in the e-commerce sector, similar to what the Bangladesh Financial Intelligence Unit does in the financial sector.
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Reem Zaabalawi, Gregory Domenic VanderPyl, Daniel Fredrick, Kimberly Gleason and Deborah Smith
The purpose of this study is to extend the Fraud Diamond Theory to celebrity Special Purpose Acquisition Companies (SPACs) and investigate their post-Initial Public Offering (IPO…
Abstract
Purpose
The purpose of this study is to extend the Fraud Diamond Theory to celebrity Special Purpose Acquisition Companies (SPACs) and investigate their post-Initial Public Offering (IPO) stock market performance.
Design/methodology/approach
After obtaining a sample of celebrity SPACs from the Spacresearch.com database, fraud risk characteristics were obtained from Lexis Nexus searches. Buy and hold abnormal returns were calculated for celebrity SPACs versus a small-cap equity benchmark for time intervals after IPO, and multiple regression analysis was performed to examine the relationship between fraud risk features and post-IPO returns.
Findings
Celebrity SPACs exhibit Fraud Diamond characteristics and significantly underperform a small-cap stock portfolio on a risk-adjusted basis after IPO.
Research limitations/implications
This study only examines celebrity SPACs that conducted IPOs on the NYSE and NASDAQ/AMEX and does not include those that are traded on the Over the Counter Bulletin Board (OTCBB).
Practical implications
Celebrity endorsement of SPAC vehicles attracts investors who may not be properly informed regarding the risk characteristics of SPACs. Accordingly, investors should be warned that celebrity SPACs underperform a small-cap equity portfolio and exhibit significant elements of fraud risk.
Social implications
The use of celebrity endorsement as a marketing device to attract investment in SPACs has regulatory implications.
Originality/value
To the best of the authors’ knowledge, this paper is the first to examine the fraud risk characteristics and post-IPO performance of celebrity SPACs.
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Esther Lea Ledoux and Nadia Smaili
The purpose of this paper is to analyze FTX cryptocurrency frauds. FTX is a former cryptocurrency exchange platform that went bankrupt because of fraud in 2022.
Abstract
Purpose
The purpose of this paper is to analyze FTX cryptocurrency frauds. FTX is a former cryptocurrency exchange platform that went bankrupt because of fraud in 2022.
Design/methodology/approach
Using a qualitative method and a case study of FTX, the authors document the multiple fraud schemes perpetrated. The authors collected media and research articles that discussed the FTX case. The authors analyzed 18 articles.
Findings
Based on this case, the authors highlight the governance and ethics weaknesses in the FTX environment. The authors also discuss cryptocurrency risks and regulation of cryptocurrencies. The FTX affair has shaken up the international regulatory world, which has been seeking solutions to protect customers and investors and helping banks take positions since 2022.
Originality/value
This study contributes to the fraud literature by deeply examining cryptocurrency fraud risks. In addition, the findings could help financial institutions and guide them in the cryptocurrency world.
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Sasha Romanosky and Elizabeth L. Petrun Sayers
The purpose of this study is to examine how companies integrate cyber risk into their enterprise risk management practices. Data breaches have become commonplace, with thousands…
Abstract
Purpose
The purpose of this study is to examine how companies integrate cyber risk into their enterprise risk management practices. Data breaches have become commonplace, with thousands occurring each year, and some costing hundreds of millions of dollars. Consequently, cyber risk has become one of the gravest risks facing organizations, and has attracted boardroom-level attention. On the other hand, companies already manage many kinds of difficult and growing risks, and that firms lose less than 1% of annual revenues as a result of cyber incidents. Therefore, how should firms appropriately address cyber risk? Is it indeed a materially different kind of risk area, or is it simply just one more risk that can seamlessly be integrated into existing enterprise risk management (ERM) practices?
Design/methodology/approach
The authors performed thematic analysis based on semi-structured interviews, with non-probabilistic, purposive sampling, to answer two main questions. First, how do firms manage enterprise risks, generally? And second, how are they integrating cyber risk into these existing processes?
Findings
The authors find that there is considerable variation in the approach and sophistication in ERM practices, such as whether they are driven more like an auditing function, or as a risk champion. The authors also find that despite the novelty of cyber risk, it can be integrated like other enterprise risks, and that cyber risk is most often seen as an operational risk (similar to workplace accidents or fraud), rather than a strategic risk, emerging from, for example, technology innovation and R&D.
Research limitations/implications
The generalization of the results is limited by the sample size and variation of firms interviewed. While the authors attempted to interview enterprise risk managers across a wide variation of firms, there were clear limitations in the scope. That being said, the authors were fortunate to be able to examine ERM and cyber risk practices across small and large, private and publicly traded companies, from a variety of business sectors.
Practical implications
The authors believe these finding are important because they present evidence that while cyber risk may be new, it does not require specialized handling or processes to track it at the enterprise level. While some firms may choose to provide special accommodations or attention because of their data collection or business practices, this approach is neither necessary nor required of all firms in all situations.
Originality/value
This research is one of the only papers that, to the best of the authors’ knowledge, examines how cyber risk is integrated at an enterprise level.
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Bernice Bissett, Philip Steenkamp and Duane Aslett
In the aftermath of the 2021 Financial Action Task Force Mutual Evaluation Report, legislators, supervisory bodies, law enforcement and the like are focusing on preventing South…
Abstract
Purpose
In the aftermath of the 2021 Financial Action Task Force Mutual Evaluation Report, legislators, supervisory bodies, law enforcement and the like are focusing on preventing South Africa from being greylisted. This paper performs an analysis of the 2021 South African Financial Action Task Force (FATF) Mutual Evaluation, specifically Recommendation 8 and Immediate Outcome 10. The purpose of this paper is to address the concerns raised and assist those tasked with implementing remediation measures.
Design/methodology/approach
Secondary sources such as legislation, case law, textbooks and peer-reviewed publications are used in addressing the concerns. A major focus is placed on the evaluation itself, with an analysis of Recommendation 8 and Immediate Outcome 10.
Findings
Despite the non-compliance rating and a low level of effectiveness received regarding non-profit organisations, authorities might not place a large focus on remediating this, as more pertinent issues arise in the report. The lack of focus in this area adds to the likelihood of grey listing by FATF. However, with co-operation from the relevant stakeholders, these low ratings can be improved.
Originality/value
Since the Mutual Evaluation’s release in October 2021 there have not been any papers addressing the highlighted issues in the non-profit sector in South Africa, to the best of the authors’ knowledge. This paper will be the first of its kind and will be of use to authorities as regards mitigating the concerns raised by FATF.
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Amina Rizwan, Shabana Naveed, Faisal Mustafa, Muhammad Shehzad Hanif, Aitzaz Khurshid and Talha Zubair Ahmad Khan
This study explores the adoption of crowdfunding in Pakistan, focusing on the challenges and opportunities within its unique entrepreneurial ecosystem. The research aims to…
Abstract
Purpose
This study explores the adoption of crowdfunding in Pakistan, focusing on the challenges and opportunities within its unique entrepreneurial ecosystem. The research aims to provide insights into the regulatory mechanisms, stakeholder engagement and institutional factors influencing crowdfunding adoption.
Design/methodology/approach
Seventeen semi-structured interviews were conducted using a purposive sampling technique. Data was collected from diverse stakeholders involved in the crowdfunding process including investors, entrepreneurs, platform owners and regulators.
Findings
The study identifies various challenges, including regulatory gaps, investor concerns, platform-related issues and systemic challenges such as political instability and weak institutions. These challenges hinder the effective implementation of crowdfunding in Pakistan. Moreover, the study highlights opportunities for financial inclusion, bridging the gap between investors and entrepreneurs, and leveraging Pakistan’s entrepreneurial landscape for crowdfunding growth. While several challenges were common to both developed and developing countries, the study also identified distinct challenges such as digital literacy, reliance on the undocumented economy, insufficient regulatory frameworks and investor mindset specific to developing countries.
Research limitations/implications
Since crowdfunding is an emerging phenomenon in Pakistan, this study had limitations as no official crowdfunding platform other than the Pakistan National Investor Portal had started operations. Therefore, this study involved only those stakeholders who were involved in designing regulatory sandbox suggestions. The sample size could be increased to include stakeholders from other developing countries in the future. This article, however, provides significant strategic guidance for policymakers in developing a framework to improve financial inclusion in development.
Practical implications
The study provides critical areas of concern for regulatory authorities for developing appropriate legislation to help overcome the challenges to the institutionalization of crowdfunding. This study also encourages stakeholders like investors and entrepreneurs to participate in crowdfunding while looking at the perspective of other parties.
Social implications
This research highlights the need for the Pakistani society to be well-informed about alternative investment opportunities, like crowdfunding. The micro, small and medium enterprises (MSME) sector, along with the government, can also explore the benefits of crowdfunding to address their lack of access to capital and enable the inclusion of an informal economy to reduce poverty in a developing country.
Originality/value
Crowdfunding is a new phenomenon in Pakistan, and the scope of its application in the MSME sector has not been thoroughly investigated. This study reveals how micro and small firms can use crowdfunding to boost their economic operations by overcoming challenges and taking advantage of fintech (financial technology) to achieve financial inclusion, leading to economic sustainability.
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