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This study aims to, firstly, develop a red flag checklist for cryptocurrency Ponzi schemes and, secondly, to test this red flag checklist against publicly available marketing material for Mirror Trading International (MTI). The red flag checklist test seeks to establish if MTI’s marketing material posted on YouTube^® (in the form of a live video presentation) exhibits any of the red flags from the checklist.

The study uses a structured literature review and qualitative analysis of red flags for Ponzi and cryptocurrency Ponzi schemes.

A research lacuna was discovered with regard to cryptocurrency Ponzi scheme red flags. By means of a structured literature review, journal papers were identified that listed and discussed Ponzi scheme red flags. The red flags from the identified journal papers were subsequently used in a qualitative analysis. The analyses and syntheses resulted in the development of a red flag checklist for cryptocurrency Ponzi schemes, with five red flag categories, containing 18 associated red flags. The red flag checklist was then tested against MTI’s marketing material (a transcription of a live YouTube presentation). The test resulted in MTI’s marketing material exhibiting 88% of the red flags contained within the checklist.

The inherent limitations in the design of using a structured literature review and the lack of research regarding the cryptocurrency Ponzi scheme red flags.

The study provides a red flag checklist for cryptocurrency Ponzi schemes. The red flag checklist can be applied to a cryptocurrency investment scheme’s marketing material to establish if it exhibits any of these red flags.

The red flag checklist can be applied to a cryptocurrency investment scheme’s marketing material to establish if it exhibits any of these red flags.

The study provides a red flag checklist for cryptocurrency Ponzi schemes.

In 2009, the research team of Unger and Nelen was requested to study the scale of entwinement between money laundering activities and the Dutch real estate sector. For this, the team developed a data mining framework to detect real estate property at risk of being part of a money laundering scheme. Part of this study involved a criminological testing of the developed framework which resulted in the statement that improvements and alterations are necessary to increase the framework's validity and reliability. This paper aims to review this framework and generate refinements.

This paper is concerned with a review – on the basis of data mining theory – with respect to the original framework in order to generate refinements for a future model.

In general, three major shortcomings were identified, being: the use of unspecified detection clusters; the theoretical nature of some of the risk indicators in combination with data integrity issues; and the use of speculative/arbitrary risk indicators.

Addressing these shortcomings in a future data mining framework will very likely increase its effectiveness and so, increase the ability of law enforcement agencies to counter money laundering activities more effectively and efficiently.

The Supreme Court’s decision in Federal Trade Commission v. Actavis, Inc. is a challenge to conventional antitrust analysis. Conventional civil antitrust cases are decided by a preponderance of the evidence. This means that conduct challenged under the rule of reason is only condemned if the conduct resulted in more competitive harm in the actual world than a world without the alleged violation. Under conventional analysis, the intent of the parties also plays only a supporting role in determining whether the conduct was anticompetitive. A holder of a valid patent has a right to exclude others practicing the patented technology. And, the patent holder is not assumed to have market power because it expended resources in maintaining exclusionary rights. Actavis creates doubts about these propositions in circumstances beyond the “reverse” payment settlement of a patent suit that may have delayed an alleged infringer market entry. This chapter explores whether applying Actavis logic to antitrust litigation can result in condemnation of practices where there is little chance of an anticompetitive effect, where the patent holder likely has a valid and infringed patent, where there is little reason to believe that the patent holder has market power, and where only one party, or no parties, to an agreement have an anticompetitive intent. This chapter also investigates whether Actavis creates new problems with standing analysis, damages calculations, and the balancing of efficiencies against anticompetitive effects. Nevertheless, the lower courts have begun to extend the logic of Actavis. This is apparent in the condemnation of no-Authorized-generic settlements.

This paper aims to inform the readers about the existing financial intelligence tools that are being used by financial intelligence units. It tries to demonstrate, with the help of a literature review, what the limitations of these tools are and how these limitations hinder the potential of the financial intelligence tools for early detection of terrorist financing activities.

The literature review method was adopted to discuss the financial intelligence tools, their limitations and the implications of the limitations for early detection of terrorist financing activities.

It was found that although the financial intelligence tools were introduced with a view to detect terrorist financing activities early, there are some inherent limitations of the tools relating to technical design features and operational procedures that hinder early detection of terrorist financing activities.

The existing financial intelligence tools need to be repaired by removing the inherent limitations of the tools.

The financial intelligence units should take into cognizance the importance of early detection of terrorist financing activities for preventing terrorist attacks and need to redesign the existing tools in such a way that make these tools effective for early detection of terrorist financing activities.

Peace will be established in society by preventing terrorist attacks through early detection of terrorist financing activities.

The originality of the paper lies in identifying the limitations of the existing financial intelligence tools for the early detection of terrorist financing activities.

This study aims to enlist the red flag behaviors exhibited in financial services frauds.

A pluralistic mixed methodology was adopted in this study. Data collected via semi-structured interviews were coded, quantified and subjected to descriptive analysis to identify the most frequently exhibited red flag behaviors in financial services frauds. The relative risk of exhibition of the identified red flag behaviors was assessed by intuitively comparing the red flag behaviors identified in financial services frauds (experimental group, n = 24) with the red flag behaviors identified in a heterogeneous control sample of non-financial services frauds (control group, n = 28).

This study identifies six red flag behaviors likely to be more frequently exhibited in financial services frauds than in non-financial services frauds.

Results of this study can be used to develop a typical behavioral profile of a financial services fraud perpetrator. Active communication of this profile in fraud awareness training can help make fraud conspicuous in the financial services industry.

This study is unique because human behavior as a possible fraud indicator is an under-researched area. Further, this study examines first level of evidence and attempts an ex-post analysis of actual red flag behaviors exhibited in acknowledged fraud cases in which the perpetrator/perpetrators has/have been clearly identified.

This study aims to attempt a gender-based ex post examination of behavioral red flags of fraud exhibited by fraud perpetrators.

Qualitative data collected from semi-structured interviews were triangulated, quantified and subjected to statistical analysis to calculate the relative risk of exhibition of a behavioral red flag of fraud by a male/female fraud perpetrator.

This study reports the percentage of fraud cases in which male and female fraud perpetrators display particular behavioral red flags. The study also enlists the behavioral red flags likely to be more frequently exhibited by female fraud perpetrators relative to male fraud perpetrators and vice-versa.

Use of the results of this study in anti-fraud training is likely to make organizational fraud more susceptible to observation.

This study is unique because it is one of the very few studies that examine employee behavior as a potential fraud signal, establish gender distinction in behavioral red flags of fraud, and assess this phenomenon in a country other than a Western country.

Statement on Auditing Standards (SAS) No. 53 requires that the audit be designed to provide a reasonable assurance of detecting management fraud. Traditionally auditors have utilized personal, business, and economic red flags in risk analysis and audit planning. Touche Ross (1974), Coopers and Lybrand (1977), Price Waterhouse (1985), and SAS Nos. 6, 16, 17, and 53 discuss various red flags associated with management fraud. However, the authoritative literature does not provide any guidance on how to measure and combine red flags. The extant literature primarily measures red flags as “yes” or “no” type binary variables. However, red flags are fuzzy in nature and fuzzy set approach can be used to measure and combine red flags. The purpose of this paper is to provide a framework for the application of the theory of fuzzy sets to the problem of assessing the risk of management fraud using red flags. This approach can be used to capture the beliefs of one or several auditors concerning red flags and combine these beliefs to estimate the risk of management fraud. This approach can be extended to build fuzzy reasoning systems that assess the risk of management fraud.

In 1988, the US standard form audit report experienced its first major modification in 39 years. Among the objectives of the “new” report were better auditor/user communications leading to, among other things, an abridgement of auditor liability. Nearly a decade later, this issue has yet to be addressed empirically and with rigour. The empirical research reported examines the ability of the “new” audit report to reduce perceptions of auditor responsibility/liability across two instances of alleged audit failure. It is argued that a jurist’s advantage of “perfect hindsight” may mitigate the effectiveness of revised communications contained in the audit report, in instances where audit risk at the time of the audit appears high. Accordingly, consideration of environments of both high and low perceived risk were provided in a behavioural experiment conducted with 81 investors serving as subjects. Findings reveal that the revised audit report language may provide relief for auditor liability, but the presence of red‐flags, or red‐flag related environmental conditions, may exacerbate negative perceptions.

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

This study uses criminology theories to analyze corruption and its prevention.

The global cost of bribery alone is estimated at US$1tn annually, not including costs resulting from non-completion and deficient completion of development projects (World Bank Institute, 2004). This paper shows that an effective prevention model should include a positive work environment and ethical governance; the implementation of a compliance risk management program with fraud risk assessments; an accessible psychological assistance program for employees; regular employee anti-fraud training; the implementation of targeted internal controls such as proper segregation of organizational duties; the adoption of fair compensation levels and realistic individual performance goals; a user-friendly and anonymous reporting mechanism; and independent and regular analyses of abnormal patterns (red flags).

This paper extends previous research by tying together disparate factors into a cohesive model for the prevention of corruption.

The prevention model developed in this paper assists in deterring corruption, improving internal controls, improving the likelihood of detection and reducing opportunities to perpetrate corruption. By reducing the risk of corruption, this model also helps organizations and governments reduce project costs (public spending) and improve project quality, thus promoting economic competitiveness.

A comprehensive prevention model is developed to help curtail corruption and its devastating effects.

Jost et al. (2003) theorizes and finds that business students, on an average, hold a positive fair market ideology (FMI), which suggests that they believe in the power of market forces to reward ethical corporate behavior and punish unethical behavior; accordingly, they tend to make an implicit association between a company's financial performance relative to the stock market and the company's ethics. We suggest that audit education in professional skepticism and ‘red flag’ analysis will mitigate this implicit bias when a company's relative market performance is unusually distant from a referent benchmark, such as an industry average. In a between-participants experiment involving 94 non-audit and 94 audit business students, we measure their FMI, and examine how they perceive the ethicality of a company's management based on the referent direction (above or below the industry average) and referent magnitude (relatively close to or distant from the industry average) of the company's relative market performance. The results suggest that both non-audit and audit students indeed hold a positive FMI, and they ascribe favorable ethical perceptions to company performance that is relatively close to the industry average, irrespective of referent direction. When company performance is relatively distant from the industry average, neither group of students makes the implicit link. Overall, the findings do not indicate that audit education differentially affects business students’ perceptions of corporate ethics when a company's relative stock market performance deviates considerably from a referent benchmark.