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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

Keywords

Article
Publication date: 16 August 2022

Abhishek Ranga and Rajesh Pathak

The authors investigate the effect of audit quality and analysts' coverage on firms' compliance concerning goodwill impairment testing and disclosure requirements with the…

Abstract

Purpose

The authors investigate the effect of audit quality and analysts' coverage on firms' compliance concerning goodwill impairment testing and disclosure requirements with the Indian Accounting Standard (Ind AS) over the period of 2017–2020.

Design/methodology/approach

The authors conduct univariate analysis and employ pooled ordinary least square (POLS) and Fama–MacBeth (FMB) regression techniques for empirical testing.

Findings

The authors report a substantially higher disclosure score (DS) for firms with superior audit quality and for firms with incidence of analysts' coverage. Moreover, the authors show a positive impact of audit quality on the firm's degree of disclosure. This signifies better compliance by the clients of Big-4 audit firms in the enforcement of standard's mandates. Besides, the results on analysts' coverage indicate that the increasing number of analysts discipline managers in terms of appropriate compliance with disclosure requirements, hence favours the monitoring effect hypothesis for Indian firms. The results are robust to the alternate measures of key regressors, set of firm controls and alternate estimation technique.

Originality/value

The study adds to the knowledge concerning the economic consequences of mandatory disclosures and is possibly the first to investigate compliance related to goodwill impairment disclosure regime under the new Ind AS.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

Keywords

Open Access
Article
Publication date: 3 August 2022

Ismail Abdi Changalima, Ismail Juma Ismail and Shadrack Samwel Mwaiseje

While empirical studies establish the importance of procurement planning in achieving value for money (VfM) in procurement, there is scant evidence demonstrating a link…

Abstract

Purpose

While empirical studies establish the importance of procurement planning in achieving value for money (VfM) in procurement, there is scant evidence demonstrating a link between procurement planning and procurement regulatory compliance, and thus VfM. As a result, this study examined how procurement regulatory compliance can be applied when procurement practitioners in Tanzania seek to maximize VfM through procurement planning.

Design/methodology/approach

A cross-sectional research design was adopted from which data were collected once through a structured questionnaire. The structural equation modeling (SEM) and Hayes' PROCESS macro test for mediation analysis were used to analyze the collected data.

Findings

Procurement planning has a significant and positive relationship with procurement regulatory compliance (ß = 0.491, p < 0.001). Procurement regulatory compliance has a significant and positive relationship with VfM in procurement (ß = 0.586, p < 0.001). Results also show that procurement planning is a significant positive predictor of VfM (ß = 0.257, p = 0.005). Furthermore, the bootstrapping confidence intervals revealed that procurement regulatory compliance significantly mediates the relationship between procurement planning and VfM in procurement.

Research limitations/implications

Although the study was able to accomplish its overall objective, it is limited in terms of the geographical setting under which the study was conducted. Hence, the generalization of research results should be made with caution as each country has specific public procurement laws and regulations governing the conduct of procurement activities in the public sector.

Originality/value

The study contributes to the growing debate on achieving VfM in procurement activities. The study adds to the literature on public procurement by establishing the mediation effect of procurement regulatory compliance on the quest toward achieving VfM in public procurement.

Details

Journal of Money and Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2634-2596

Keywords

Article
Publication date: 8 May 2018

Scott R. Anderson, James Audette and Kate S. Poorbaugh

To summarize the Municipal Securities Rulemaking Board’s 2017 Compliance Advisory for brokers, dealers and municipal securities dealers.

Abstract

Purpose

To summarize the Municipal Securities Rulemaking Board’s 2017 Compliance Advisory for brokers, dealers and municipal securities dealers.

Design/methodology/approach

Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls.

Findings

By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs.

Practical implications

Dealers should consider reviewing their firm’s existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory.

Originality/value

Practical guidance from experienced securities and financial services regulatory lawyers.

Article
Publication date: 4 January 2008

Jackie Johnson

To gauge the extent to which the global financial system is anti‐money laundering (AML)/countering the financing of terrorism (CFT) prepared by analysing and comparing the…

1731

Abstract

Purpose

To gauge the extent to which the global financial system is anti‐money laundering (AML)/countering the financing of terrorism (CFT) prepared by analysing and comparing the AML/CFT systems of Financial Action Task Force (FATF) members with countries belonging to regional AML organisations.

Design/methodology/approach

Mutual evaluation data of 16 FATF members and 21 non‐FATF countries is analysed and compared using Kruskal‐Wallis and paired‐t tests to determine similarities and differences across the two groups of countries.

Findings

AML/CFT systems of FATF members and non‐FATF countries are poor. The lack of compliance with global AML/CFT standards leaves so many holes in these countries' regulatory, financial, and legal systems that money laundering with or without any relationship to the financing of terrorism, would be relatively easy to achieve.

Research limitations/implications

In using an analytical approach it has been necessary to put numerical values on compliance levels used by the FATF. Given that these are very broad, substituting a single value for each compliance level will provide only a crude measure of compliance for comparisons to be made. The results should therefore be used as a guide to the ranking and compliance of countries rather than some exact measurement of compliance.

Practical implications

There will need to be follow‐up visits to this round of mutual evaluations to evaluate country responses to their poor assessments.

Originality/value

Publication of mutual evaluations by the FATF and a number of regional bodies has enabled a comparison of AML/CFT systems from countries around the world. Lack of data has not enabled this to be done before.

Details

Journal of Financial Crime, vol. 15 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 5 September 2016

Scott R. Anderson and Kate S. Poorbaugh

To summarize the Municipal Securities Rulemaking Board’s 2016 Compliance Advisory for brokers, dealers and municipal securities dealers.

Abstract

Purpose

To summarize the Municipal Securities Rulemaking Board’s 2016 Compliance Advisory for brokers, dealers and municipal securities dealers.

Design/methodology/approach

Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls.

Findings

By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs.

Practical implications

Dealers should consider reviewing their firms’ existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory.

Originality/value

Practical guidance from experienced securities and financial services regulatory lawyers.

Article
Publication date: 1 January 1997

Isaac Alfon

The increasing use of cost‐benefit analysis (CBA) in financial regulation is bringing a sharper focus on the benefits conferred by regulation. This paper addresses the…

Abstract

The increasing use of cost‐benefit analysis (CBA) in financial regulation is bringing a sharper focus on the benefits conferred by regulation. This paper addresses the impact of that sharper focus on the compliance culture of regulated firms. Why focus on the benefits of regulation? What does CBA have to offer to the compliance culture of authorised firms? How does the introduction of CBA fit in with other developments in the regulatory arena? This paper offers some tentative answers to these questions.

Details

Journal of Financial Regulation and Compliance, vol. 5 no. 1
Type: Research Article
ISSN: 1358-1988

Article
Publication date: 1 September 2004

Jonathan Edwards and Simon Wolfe

The Basel Committee on Banking Supervision under the auspices of the Bank for International Settlements (BIS) published a consultation paper in late 2003 on the compliance

1496

Abstract

The Basel Committee on Banking Supervision under the auspices of the Bank for International Settlements (BIS) published a consultation paper in late 2003 on the compliance function in banks. The aim of the consultation paper is to set out the views of banking supervisors and provide basic guidance for banks. Whereas there is no attempt to prescribe a uniform approach, a clear set of general principles is laid down for the role of the compliance function within banking organisations. Furthermore, recognition is given to the fact that diversity exists between banks with respect to their internal organisation of the compliance function and also to diversity in the legal and regulatory environment affecting the compliance function across jurisdictions. The core objectives of this paper are to examine the BIS approach to the compliance function and look at how this is likely to evolve. The authors draw on experience from the UK life assurance industry where substantial inroads have been made to embed a compliance competent culture within such types of financial institutions. A partnership approach is highlighted as essential to achieving a viable and meaningful compliance function. Finally, an ethical approach is explored as the possible future direction for banks. The first section reviews the new principles for the compliance function; the second section describes issues that arise; the third section analyses a partnership approach and explores an ethical approach; and the final section provides a summary and conclusion.

Details

Journal of Financial Regulation and Compliance, vol. 12 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 1 April 2006

Jonathan Edwards and Simon Wolfe

Compliance competence is key to the operation and reputation of the financial services sector and is now completely embedded in the way financial services organisations…

1059

Abstract

Purpose

Compliance competence is key to the operation and reputation of the financial services sector and is now completely embedded in the way financial services organisations carry on investment business. It is also fundamental to the Financial Services Authority (FSA) in seeking to achieve its regulatory objectives as set out in sections 3‐6 of the Financial Services and Markets Act 2000. A great deal has been written on the topic of compliance and competence and the core objective of this paper is to offer a compliance competence model for financial institutions that recognises and highlights the importance of the regulator and the regulated working together as partners.

Design/methodology/approach

A unique compliance competence partnership approach model, arising from case study research, is proposed and consists of three key elements: good compliance practice, good ethical practice and a positive FSA relationship. The three elements are represented as a tripod with three mainstays that are intrinsically linked. The mainstays are supported by cross‐members that consist of underlying and intrinsic issues of compliance competence.

Findings

The regulator and regulated need to work together in a proactive partnership. Organisation need to formulate a clear ethical policy involving employees from every aspect.

Originality/value

The partnership approach model, advocated here, would create a real partnership between the FSA and its regulated organisations.

Details

Journal of Financial Regulation and Compliance, vol. 14 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 1 October 2006

Michael R. Rosella and Domenick Pugliese

This paper sets out to assess the role of the chief compliance officer (“CCO”), how the CCO performs his/her duties, and how the CCO interacts with the fund's board three…

455

Abstract

Purpose

This paper sets out to assess the role of the chief compliance officer (“CCO”), how the CCO performs his/her duties, and how the CCO interacts with the fund's board three years after the adoption of Rule 38a‐1 under the Investment Company Act of 1940.

Design/methodology/approach

Reviews the CCO's responsibilities under Rule 38a‐1, discusses how the CCO role has evolved since the rule was promulgated, and focuses on key issues such as oversight versus supervision, the annual review process, risk assessement, testing methodologies, and the annual report to the fund board on the adequacy and operation of the fund's compliance program.

Findings

Properly conducted compliance requires the support of a wide range of the advisory/administrative team with the CCO playing the role of conductor of the orchestra. More and more CCOs seek to distance themselves from approving the day‐to‐day actions of other employees, so they cannot be considered to have assumed supervisory responsibility for those employees. Although a fund is required to perform an annual review of the adequacy of its compliance programs and its Primary Service Providers' compliance programs, most CCOs have found the review process is ongoing and occurs continuously throughout the year. Now that these compliance programs have been in place for two years, more CCOs are devoting time and resources to identify high‐risk areas and to implement transactional, periodic, and forensic testing programs. The CCO annual report has taken many different shapes and sizes, but generally summarizes material changes to the fund's compliance policies and procedures that have already been reported to the board.

Originality/value

A current, practical assessment of the CCO role by expert lawyers who advise funds on their compliance programs.

Details

Journal of Investment Compliance, vol. 7 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

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