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Article
Publication date: 7 August 2021

Rima Khatib and Henri Barki

To help reduce the increasing number of information security breaches that are caused by insiders, past research has examined employee non-compliance with information…

Abstract

Purpose

To help reduce the increasing number of information security breaches that are caused by insiders, past research has examined employee non-compliance with information security policy. However, existent studies have observed mixed results, which suggest that an interaction is likely to exist among the variables that explain employee non-compliance. In an effort to provide evidence for this possibility, this paper aims to better explain why employees routinely engage in non-compliant behaviors by examining the direct and interactive effects of employees’ perceived costs and rewards of compliance and non-compliance on their routinized non-compliant behaviors.

Design/methodology/approach

Based on rational choice theory, this study used 16 hypothetical scenarios in an experimental survey, collecting data from 326 respondents and analyzing them via structural equation modeling and a four-way factorial experiment.

Findings

The results suggest that routinized non-compliance of employees is more strongly influenced by the rewards than the costs they perceive in their non-compliance. Further, employees’ routinized non-compliance behavior was found to be positively influenced by an interactive effect of perceived rewards of compliance when their perceptions of their non-compliance costs and rewards were both high and low.

Originality/value

This paper’s key contribution is to suggest that non-compliance behavior is influenced by direct and interactive effects of perceived rewards of compliance and non-compliance.

Details

Information & Computer Security, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2056-4961

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Article
Publication date: 25 January 2021

Lutfi Hassen Ali Al-Ttaffi, Hijattulah Abdul-Jabbar and Saeed Awadh Bin-Nashwan

This paper aims to enhance the understanding of tax non-compliance behaviour of owner-managers of small and medium enterprises (SMEs) in Yemen. Drawing on the behavioural…

Abstract

Purpose

This paper aims to enhance the understanding of tax non-compliance behaviour of owner-managers of small and medium enterprises (SMEs) in Yemen. Drawing on the behavioural perspective and not on the Sharia per se, this study investigated the perspectives of Muslims towards government’s right to impose tax, summarised in three categories: forbidden, permissible and permissible under certain conditions.

Design/methodology/approach

This study was conducted using a self-administered survey to collect the required data from a sample of 500 SMEs in Yemen. Non-compliance is measured in terms of a single hypothetical tax scenario covering four types of tax situations. Yet, Muslims’ perspective towards the government’s right to impose tax was measured using the three perspectives stated above.

Findings

As the major finding, Muslims’ perspective towards taxation has a significant influence on their likely tax compliance behaviour. Specifically, the taxpayers who believed that tax is totally permissible (i.e. the government has the right to impose tax) were more compliant than those who believed that tax is totally forbidden. Furthermore, taxpayers’ non-compliance decisions are statistically related to tax rate and penalties.

Practical implications

The findings could serve as a useful input for taxation policy and strategy in Yemen. It is recommended that government should stress the importance of paying tax as a citizen’s obligation and also emphasise the religious legality of taxation, as it is used for public purposes.

Originality/value

This study differs from the existing literature in that its empirical investigation scrutinises the effect of citizens’ perspectives towards taxation on their non-compliance behaviour within the Islamic religion itself, particularly, in a typical Muslim community such as Yemen. The study is pioneer in adopting the views of different scholars on the government’s right to collect taxes based on three religious views (forbidden, permissible and permissible under certain conditions), which were used for measurement.

Details

International Journal of Ethics and Systems, vol. 37 no. 2
Type: Research Article
ISSN: 2514-9369

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Article
Publication date: 12 November 2020

Zakariya Mustapha, Sherin Binti Kunhibava and Aishath Muneeza

The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute…

Abstract

Purpose

The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute resolution in Nigeria. This is with a view to putting forward direction for future studies on the duo of legal and Sharīʿah non-compliance risks and their impact in Islamic finance.

Design/methodology/approach

This review is designed as an exploratory study and qualitative methodology is used in examining relevant literature comprising of primary and secondary data while identifying legal risk and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. Using the doctrinal approach together with content analysis, relevant Nigerian laws and judicial precedents applicable to Islamic finance practice and related publications were examined in determining the identified risks.

Findings

Undeveloped laws, the uncertainty of Sharīʿah governance and enforceability issues are identified as legal gaps for Islamic finance under the Nigerian legal system. The gaps are inimical to and undermine investor confidence in Nigeria’s Islamic finance industry. The review reveals the necessity of tailor-made Sharīʿah-based regulations in addition to corresponding governance and oversight for a legally safe and Sharīʿah-compliant Islamic finance practice. It brings to light the imperative for mitigating the legal and Sharīʿah non-compliance risks associated with Islamic finance operations as crucial for Islamic finance businesses, Islamic finance institutions and their sustainable development.

Research limitations/implications

Based on content analysis, the review is wholly doctrinal and does not involve empirical data. Legal safety and Sharīʿah compliance are not to be compromised in Islamic finance operations. The review would assist relevant regulators and investors in Islamic financial enterprises to understand and determine the impact and potential ramifications of legal safety and Sharīʿah non-compliance on Islamic Finance Institutions.

Practical implications

This study provides an insight into the dimensions and ramifications of legal and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. This study is premised on the imperative for research studies whose outcome would inform regulations that strike a balance between establishing Islamic financial institution/business and ensuring legal certainty and Sharīʿah compliance of their operations. This study paves way for this kind of research studies.

Originality/value

The findings and discussions provide a guide for regulators and researchers on the identification and mitigation of legal and Sharīʿah non-compliance risks in Islamic finance via a literature review. This study, the first of its kind in Nigeria, advances the idea that research into legal and Sharīʿah non-compliance risks of Islamic financial entities is key to mitigating the risks and fostering the entities and their businesses.

Details

International Journal of Law and Management, vol. 63 no. 2
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 29 July 2014

Raffaele Zanoli, Danilo Gambelli, Francesco Solfanelli and Susanne Padel

– The purpose of this paper is to provide an analysis of the risk factors influencing non-compliance in UK organic farming.

Abstract

Purpose

The purpose of this paper is to provide an analysis of the risk factors influencing non-compliance in UK organic farming.

Design/methodology/approach

The paper uses a formal econometric model of risk analysis to provide empirical evidence on the determinants of non-compliance in organic farming. A panel of data from the archives of the largest control body in the UK for 2007-2009 is used, and specific analyses are performed for two types of non-compliances. A zero inflated count data model is used for the estimation, taking into account the fact that the occurrences of non-compliance are very sparse.

Findings

Results show the existence of strong co-dependence of non-compliant behaviours (i.e. the occurrence of major and critical non-compliance increases the probability of occurrence of the minor one; similarly the probability of occurrence of major non-compliance increases when minor non-compliance occur). Besides, livestock production and farm size are relevant risk factors.

Research limitations/implications

Albeit highly representative, the findings are based on Soil Association data only and not on all UK organic farms.

Practical implications

The paper provides practical indications for control bodies, concerning aspects that could be strengthened for more efficient risk-based inspections. The paper advocates the use of financial information like turnover or capital stock, and of data concerning the characteristics of the farmers, that could substantially improve the probability of detecting the most severe non-compliances.

Social implications

Certification is essential for organic farming, and an improvement of inspection procedures through a risk-based approach could add efficiency and effectiveness to the whole organic food system, with obvious advantages for consumers and the society as a whole.

Originality/value

This paper provides for the first time empirical evidence concerning the implementation of the organic certification system in the UK.

Details

British Food Journal, vol. 116 no. 8
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 13 February 2017

Inho Hwang, Daejin Kim, Taeha Kim and Sanghyun Kim

The purpose of this paper is to empirically investigate the negative casual relationships between organizational security factors (security systems, security education…

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1662

Abstract

Purpose

The purpose of this paper is to empirically investigate the negative casual relationships between organizational security factors (security systems, security education, and security visibility) and individual non-compliance causes (work impediment, security system anxiety, and non-compliance behaviors of peers), which have negative influences on compliance intention.

Design/methodology/approach

Based on literature review, the authors propose a research model together with hypotheses. The survey questionnaires were developed to collect data, which then validated the measurement model. The authors collected 415 responses from employees at manufacturing and service firms that had already implemented security policies. The hypothesized relationships were tested using the structural equation model approach with AMOS 18.0.

Findings

Survey results validate that work impediment, security system anxiety, and non-compliance peer behaviors are the causes of employee non-compliance. In addition, the authors found that security systems, security education, and security visibility decrease instances of non-compliance.

Research limitations/implications

Organizations should establish a mixture of security investment in their systems, education, and visibility in order to effectively reduce employees’ non-compliance. In addition, organizations should recognize the importance of minimizing the particular causes of employees’ non-compliance to positively increase intentions to comply with information security.

Originality/value

An important issue in information security management is employee compliance. Understanding the reasons behind employees’ non-compliance is a critical issue. This paper investigates empirically why employees do not comply, and how organizations can induce employees to comply by a mixture of investments in security systems, education, and visibility.

Details

Online Information Review, vol. 41 no. 1
Type: Research Article
ISSN: 1468-4527

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Article
Publication date: 2 September 2014

Nor Azrina Mohd Yusof, Lai Ming Ling and Yap Bee Wah

The pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The negative impact of tax non-compliance on the economy and…

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3202

Abstract

Purpose

The pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The negative impact of tax non-compliance on the economy and the evolving nature of the Malaysian corporate tax system have motivated this study. The purpose of this paper is to examine the determinants of corporate tax non-compliance among small-and-medium-sized corporations (SMCs) in Malaysia.

Design/methodology/approach

This study used economic deterrence theory to analyze and test 375 tax-audited cases finalized by the Inland Revenue Board of Malaysia in 2011.

Findings

Multiple regression results revealed that marginal tax rate, company size and types of industry exerted significant effects on corporate tax non-compliance. The services and construction industries were noted to be the predominant industries engaged in tax non-compliance. The amount of concealed income unearthed during tax audit indicates clearly that there is widespread tax non-compliance in Malaysia and the quantum of tax lost through tax non-compliance is quite high.

Research limitations/implications

This study only sampled SMCs audited in 2011, hence, care has been exercised in generalizing the findings.

Practical implications

This study affirms that marginal tax rate, company size and types of industry are the main factors influencing compliance behavior of SMCs. The findings provide important insights not only to the Malaysian tax authority, but also to tax authorities and tax researchers in other parts of the world given that tax non-compliance of SMCs is a prevalent and universal problem. For example, with regard to the finding that marginal tax rate and company size are linked to non-compliance, it can be surmised that tax authorities ought to divert resources to firms with such characteristics when conducting audits.

Originality/value

Most tax research tax examining corporate tax non-compliance used financial data from annual reports to predict tax non-compliance, which are not very accurate. This study used actual tax audit cases obtained from the tax authority which are reflective of the actual situation. This study complements the scant existing literature by empirically evaluating the factors that influenced corporate tax non-compliance in a developing country like Malaysia.

Details

Journal of Applied Accounting Research, vol. 15 no. 2
Type: Research Article
ISSN: 0967-5426

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Book part
Publication date: 17 July 2014

Norasmila Awang and Azlan Amran

Tax compliance involves complying with the tax rules and regulation, which encompasses the filing, reporting and payment of tax. The two aspects of tax non-compliance are…

Abstract

Purpose

Tax compliance involves complying with the tax rules and regulation, which encompasses the filing, reporting and payment of tax. The two aspects of tax non-compliance are tax evasion and tax avoidance. While the ethicality of tax evasion as an illegal act of reducing tax is clear, the consensus regarding the morality of tax avoidance as a legal act of minimizing tax is mixed. This chapter will discuss the ethical perspective of tax (non)compliance.

Design/methodology/approach

We approach this topic by discussing the two important terms of tax non-compliance namely tax evasion and tax avoidance from the ethical point of view. The tax evasion and tax avoidance were critically evaluated to justify whether it is ethical or not. The tax non-compliance is also associated to the corporate governance which if do effectively help to protect the interest of larger stakeholder.

Findings

In a nutshell, tax non-compliance such as tax avoidance and tax evasion is unethical act and these acts of non-compliance go against the spirit of contemporary corporate governance which sought to protect the interest of the stakeholders.

Research limitations/implications

Tax non-compliance could enhance shareholders wealth (in terms of reduced tax); it affects the distribution of wealth (public benefits financed by tax revenues) among the society at large as another stakeholder affected by such act. Future research may be conduct to investigate this to the larger sample.

Social implications

Firms should avoid engaging in non-compliance activities such as engaging in tax evasion and aggressive tax avoidance as part of its social obligation to the society in line with the spirit espoused in the contemporary corporate governance.

Originality/value

This paper argues that tax non-compliance is unethical and highlights the importance of having efficient corporate governance for larger stakeholder’s interest.

Details

Ethics, Governance and Corporate Crime: Challenges and Consequences
Type: Book
ISBN: 978-1-78350-674-3

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Article
Publication date: 27 May 2014

Hung-Yuan (Richard) Lu and Vivek Mande

This study aims to examine whether banks are compliant with the Financial Accounting Standards Board’s standard Accounting Standards Update (ASU) 2010-06 requiring…

Abstract

Purpose

This study aims to examine whether banks are compliant with the Financial Accounting Standards Board’s standard Accounting Standards Update (ASU) 2010-06 requiring disaggregated fair value hierarchy information. It also identifies institutional and firm-specific factors that are associated with compliance or non-compliance.

Design/methodology/approach

Using quarterly reports of banks for the first quarters of 2009 (pre- ASU 2010-06) and 2010 (post- ASU 2010-06), we hand-collect information on disclosures about fair values from the footnotes. Using a logistic regression with compliance/non-compliance as the dependent variable, we examine factors associated with compliance/non-compliance.

Findings

Results show that 23 per cent of banks do not comply with ASU 2010-06 and that the non-compliant banks tend to be small, lack effective internal controls and are more likely to be audited by non-specialist auditors.

Research limitations/implications

This study only considers one type of non-compliance with ASU 2010-06, i.e. whether or not firms provide disaggregated fair value hierarchy information. There may be other forms of non-compliance that the authors do not examine because of the difficulties involved in objectively defining non-compliance.

Practical implications

The findings suggest firms may need to increase training for internal personnel and hire high-quality auditors for ensuring compliance with fair value accounting rules. The authors also suggest that smaller firms may find compliance to be onerous and recommend additional research to examine whether smaller firms should be exempted from some or all of the fair value rules.

Originality/value

This study provides some of the first evidence on the level of compliance with mandated fair value disclosures.

Details

Managerial Auditing Journal, vol. 29 no. 6
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 7 October 2013

Karin Hedström, Fredrik Karlsson and Ella Kolkowska

Employees' compliance with information security policies is considered an essential component of information security management. The research aims to illustrate the…

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1157

Abstract

Purpose

Employees' compliance with information security policies is considered an essential component of information security management. The research aims to illustrate the usefulness of social action theory (SAT) for management of information security.

Design/methodology/approach

This research was carried out as a longitudinal case study at a Swedish hospital. Data were collected using a combination of interviews, information security documents, and observations. Data were analysed using a combination of a value-based compliance model and the taxonomy laid out in SAT to determine user rationality.

Findings

The paper argues that management of information security and design of countermeasures should be based on an understanding of users' rationale covering both intentional and unintentional non-compliance. The findings are presented in propositions with practical and theoretical implications: P1. Employees' non-compliance is predominantly based on means-end calculations and based on a practical rationality, P2. An information security investigation of employees' rationality should not be based on an a priori assumption about user intent, P3. Information security management and choice of countermeasures should be based on an understanding of the use rationale, and P4. Countermeasures should target intentional as well as unintentional non-compliance.

Originality/value

This work is an extension of Hedström et al. arguing for the importance of addressing user rationale for successful management of information security. The presented propositions can form a basis for information security management, making the objectives underlying the study presented in Hedström et al. more clear.

Details

Information Management & Computer Security, vol. 21 no. 4
Type: Research Article
ISSN: 0968-5227

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Article
Publication date: 1 August 2019

Soo Kyung Park, Kyu Tae Kwak and Bong Gyou Lee

In a sharing economy, economically inactive members can serve as providers owing to the low start-up costs. However, such providers may operate without sufficient…

Abstract

Purpose

In a sharing economy, economically inactive members can serve as providers owing to the low start-up costs. However, such providers may operate without sufficient knowledge of the market and policies, causing significant problems. To prevent illegal sharing, governments encourage providers to register their businesses after meeting certain requirements, but most providers still operate unregistered businesses. The purpose of this paper is to explore the causes of policy non-compliance and suggest measures that can induce compliance.

Design/methodology/approach

Based on the rational choice and deterrence theories, this study combines qualitative and quantitative research. The former is used to investigate the antecedent factors affecting compliance. Using the latter, this study assumes that the existence of platform operators can resolve information asymmetries. The qualitative findings provide the variables that can lead to policy compliance, while the quantitative research verifies the causal relationships.

Findings

Business registration by providers in the sharing economy arises from their subjective cost-benefit calculations of policy compliance. According to the qualitative research, they believe there is a low risk of detection of policy non-compliance by the government. The quantitative research suggests that interventions by platform operators could resolve information asymmetries between the government and providers.

Originality/value

This study designed a mechanism to guide providers toward policy compliance. To reduce friction with the existing market and ensure efficient growth, it is necessary to cooperate with sharing economy participants. The results suggest that the role of platform operators and the government is important.

Details

Internet Research, vol. 29 no. 5
Type: Research Article
ISSN: 1066-2243

Keywords

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