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1 – 2 of 2Vandana Pramod, Jinghua Li and Ping Gao
The purpose of this paper is to form a new framework for preventing money laundering by mapping COBIT (Control for Information and Related Technology) processes to COSO (Committee…
Abstract
Purpose
The purpose of this paper is to form a new framework for preventing money laundering by mapping COBIT (Control for Information and Related Technology) processes to COSO (Committee of Sponsoring Organisation) components.
Design/methodology/approach
First, a new framework for preventing money laundering in banks is formed by mapping COBIT to COSO. Further, the potential of the mapped framework to comply with the Bank Secrecy Act requirements is analysed.
Findings
The mapped framework effectively supports all the activities of financial sectors through defining efficient information technology‐based processes and control methods. Information systems play a key role for financial sectors in producing financial statements, managing customer databases, detecting frauds, etc.
Research limitations/implications
Case studies of banks of different sizes, and in different countries are needed. It is necessary to improve the mapped framework by considering Basel III regulations.
Practical implications
COBIT‐mapped‐COSO framework is useful for banks to fight money laundering. While adopting the new framework, an organisation should apply the best practices that suit its operations rather than all the control objectives.
Social implications
The new framework can help banks fight money laundering.
Originality/value
For preventing money laundering through banks, a number of policies and intelligence systems are in place. However, there is no efficient framework that could guide banks to follow these policies and use information technologies. This paper proposes a new framework to target these gaps.
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Vandana Bhama, Pramod Kumar Jain and Surendra Singh Yadav
– The purpose of this paper is to test whether Indian firms follow the pecking order theory under situations of deficiency as well as surplus.
Abstract
Purpose
The purpose of this paper is to test whether Indian firms follow the pecking order theory under situations of deficiency as well as surplus.
Design/methodology/approach
The study examines Indian firms included in the Bombay Stock Exchange (BSE) 500 index, covering a time span of ten years (2003-2012). An extended model of pecking order theory is tested for deficit and surplus firms separately. The authors use ordinary least square regressions to test the results.
Findings
The findings indicate that the pecking order theory is an excellent descriptor for deficit firms, but a poor one for surplus firms. Deficit firms frequently issue debt to fill up deficiency requirements but keep their debt ratios in limit. In marked contrast, surplus firms have low debt to equity ratios and only occasionally redeem debt. They tend to retain funds for future expansion and other operational needs.
Research limitations/implications
The study is limited to firms included in the BSE 500 index, but could be extended to others. Future research work could also focus on debt sub-components.
Practical implications
The present study is useful for firms that are considering capital structure decisions and supports finding that deficit and surplus firms behave differently.
Originality/value
This is the first study separately testing the pecking order between deficit and surplus firms in an emerging market.
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