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1 – 10 of 15The purpose of this study is to address the question that economic standards, norms and regulations can possess weak spots that might be exploitable for the embezzlement of an…
Abstract
Purpose
The purpose of this study is to address the question that economic standards, norms and regulations can possess weak spots that might be exploitable for the embezzlement of an organization’s assets with resultant material consequences in money laundering,tax evasion, fraud, corruption and other potential financial crimes.
Design/methodology/approach
The author’s methodological approach is to introduce and discuss a new logical-deductive test that the author names “embezzler test”. The author’s test investigates regulatory architectures from the perspective of someone attempting to divert assets from or to an organization. It appraises whether a potential embezzler could divert resources without being detected and sanctioned.
Findings
The embezzler test can be applied to a broad range of standards, norms and regulations.
Research limitations/implications
This new test can be improved and further calibrated in future research.
Practical implications
Researchers, regulators and law makers can use the new test to identify and eventually fix weak spots for embezzlement in norms, standards and regulations.
Originality/value
To the best of the author’s knowledge, such a test has never been formulated or applied before to identify weak spots for potential embezzlement in regulatory architectures.
Details
Keywords
Illicit financial flows are targeted by the United Nations’ (UN) sustainable development goals (SDGs). However, these illicit flows are not entirely understood. Furthermore, they…
Abstract
Purpose
Illicit financial flows are targeted by the United Nations’ (UN) sustainable development goals (SDGs). However, these illicit flows are not entirely understood. Furthermore, they can benefit from economic norms, laws and regulations that lack mechanisms to detect and penalize them. This paper aims to investigate whether a recent test, the embezzler test, can be used to identify regulatory architectures that facilitate illicit financial flows and related financial crimes.
Design/methodology/approach
This paper develops a more advanced version of the embezzler test in terms of definitions and practical implementation methodology.
Findings
In this test, the definition of embezzlement can be understood to be the occurrence of illicit financial flows crossing the boundaries of organizations and/or countries. This is a multistage test, which intentionally simulates illicit financial flows to observe how well equipped is the regulatory architecture to deal with other financial offences that are related with these flows, such as theft, money laundering, fraud, corruption, market manipulation and tax evasion.
Research limitations/implications
Future research can use the version of this test to stress test a large range of economic norms, laws and regulations.
Social implications
This test’s new version can assist achieve the UN SDGs’ illicit financial flow reduction target. Furthermore, it can be used to study both existing and proposed norms, laws and regulation.
Originality/value
To the best of the author’s knowledge, this is the first explicit test that has been presented to identify norms, laws and regulations that facilitate illicit financial flows and related financial crimes.
Details
Keywords