Emerald | Journal of Financial Crime | Table of Contents http://www.emeraldinsight.com/1359-0790.htm Table of contents from the most recently published issue of Journal of Financial Crime Journal en-gb Tue, 01 Jul 2014 00:00:00 +0100 2013 Emerald Group Publishing Limited editorial@emeraldinsight.com support@emeraldinsight.com 60 Emerald | Journal of Financial Crime | Table of Contents http://www.emeraldinsight.com/common_assets/img/covers_journal/jfccover.gif http://www.emeraldinsight.com/1359-0790.htm 120 157 Are governments doing business with criminals and terrorist financiers? http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112652&show=abstract <strong>Abstract</strong><br /><br />Not available. Article literatinetwork@emeraldinsight.com (Louis de Koker) Tue, 01 Jul 2014 00:00:00 +0100 Cryptocurrencies: an unconventional challenge to the AML/CFT regulators? http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112640&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - Purpose of the article is to look closely at the phenomenon of the cryptocurrencies such as Digicash and Bitcoin to identify their potential vulnerabilities to money laundering and financing of terrorism. It also explores their specific characteristics relevant to ML/FT risks.<B>Design/methodology/approach</B> - Using Digicash and Bitcoin protocols as primary cases for centralized and decentralized cryptocurrencies we analyse their characteristics against cash and cashless payments. We also draw upon ‘bundle of attributes’ that may define their attractiveness for common public or criminals.<B>Findings</B> - Our research shows that characteristics of the cryptocurrencies are unlikely to make them popular among the consumers as demand for anonymity seems to be overrated. Cryptocurrencies can also be classified as payment instrument rather than private currencies: therefore, their embededdness in the financial system minimizes the ML/FT risks.<B>Research limitations/implications</B> - Some decentralized cryptocurrencies operate within informal communities. Therefore, relations within these communities are constantly evolving and need to be monitored further.<B>Practical implications</B> - The paper provides an insight into the mechanics and classification of cryptocurrencies as payment instruments. Place of cryptocurrencies within the broader payment ecosystem defines their potential vulnerabilities to being abused by the criminals. <B>Originality/value</B> - The paper fills the gap in research on cryptocurrencies as payment instruments rather than private currencies and also provides overview of their relevance for the AML/CFT regime. Article literatinetwork@emeraldinsight.com (Victor Dostov, Pavel Shust) Tue, 01 Jul 2014 00:00:00 +0100 The 2012 Italian anti-corruption law in light of international best practices http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112642&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - 2012 has marked a turning point in Italian anti-corruption policy. In response to the low ranking that Italy has in all international anti-corruption indices, the critiques expressed in international reports on its anti-corruption regime, and the increasing pressure of public opinion, the Italian parliament approved a new anti-corruption law in November 2012.<B>Design/methodology/approach</B> - The Law was preceded by critiques in the mass media and has been labelled a token act. To evaluate the effectiveness of the steps undertaken by the Italian parliament, this paper compares the new law with Italian treaty obligations, the international evaluation reports on the Italian anti-corruption regime elaborated by the OECD and the Council of Europe, the best practice guidelines, and other European models (i.e. the UK Bribery Act). <B>Findings</B> - This comparison gives the author the opportunity not only to identify the strengths and weaknesses of the law, but also to suggest efficient solutions that the Italian legislator could have adopted. <B>Originality/value</B> - So far, this is the only analysis in English of the changes introduced in the Italian anti-corruption regime in 2012. Several international colleagues and practitioners have asked me about the new regime and I therefore deemed it appropriate to address the issue in an academic article. Article literatinetwork@emeraldinsight.com (Daniele Canestri) Fri, 13 Jun 2014 00:00:00 +0100 Culpable insiders – the enemy within, the victim without http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112655&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - This paper explores the role of the culpable insider and the predatory criminal in fraud and deception. <B>Design/methodology/approach</B> - Two groupings of fraud are considered in this paper. Insider fraud consists of a person within an organization misusing their position for corrupt self-dealing, asset misappropriation and financial statement fraud. Case studies are discussed, offering differing perspectives on the role of insiders. Fraudsters use technology, like malware, to take on the mantle of an insider to facilitate their larceny. This paper also looks at the role of the insider with predatory frauds. <B>Findings</B> - Most enterprises, be they public entities or private firms, are at risk of internal fraud. Internal financial controls are the first line of defence. In tougher economic times, when enterprises run on the tightest of margins, control mechanisms are at risk of being weakened at the altar of efficiency. Firms can also adopt cultures that deter frauds, either through policies on whistle-blowers or through simple employee screening procedures. For predatory frauds, the basic warning flag can be summed up with the cliché: if something seems too good to be true, it probably is. <B>Originality/value</B> - This paper synthesizes research on fraud and the role that an insider can play as well as the role of a predatory fraudster. Article literatinetwork@emeraldinsight.com (Jeffrey Simser) Tue, 01 Jul 2014 00:00:00 +0100 Understanding the roles of loss-premium comparisons and insurance coverage in customer acceptance of insurance claim frauds http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112686&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - Customer perceptions of insurance frauds have been studied in recent years. Based on Adams’ equity theory, this research further examines the impacts of loss-premium comparisons (loss-premium comparison refers to the amount of an actual loss compared to the premium level) and insurance coverage on customer acceptance of insurance claim frauds. <B>Design/methodology/approach</B> - A questionnaire was used as an instrument in the research. The hypotheses were tested using a 3 loss-premium comparisons (the actual loss amount was lower than, or equal to, or higher than the annual premium) x 2 insurance coverage (the loss is covered or not covered by the insurance policy) experimental design in a claim application context. <B>Findings</B> - The results showed that loss-premium comparisons and insurance coverage significantly affect the final claim amounts. According to the results, age and education may relate to customer acceptance of insurance claim frauds. <B>Originality/value</B> - This study proposed a first empirical investigation into the relationship between loss-premium comparisons and customer ethical decision making in the customer frauds. Insurance coverage is also specifically considered in the study. Article literatinetwork@emeraldinsight.com (Lu-Ming Tseng, Yue-Min Kang, Chi-Erh Chung) Tue, 01 Jul 2014 00:00:00 +0100 Financial malpractices and stock market development in Nigeria: An exploratory study http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112827&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - To investigate if the prevalence of corruption and other unwholesome financial practices in Nigeria contributed substantially to the stunted growth of the capital market in general and the stock market in particular.<B>Design/methodology/approach</B> - The paper employed Gregory-Hansen cointegration approach to test the long-run equilibrium relationship between the occurrence of predatory banking practices and stock market capitalization in Nigeria.<B>Findings</B> - There exists a long-run equilibrium relationship between bank fraud and stock market capitalization but with a structural break in 2005.<B>Practical implications</B> - There is an urgent need to overhaul and re-assess from time to time the existing systems of internal checks and controls in banks, as well as other financial institutions in Nigeria.<B>Originality/value</B> - This paper is the first to empirically test the long-run equilibrium relationship between bank fraud and stock market capitalization in Nigeria. Article literatinetwork@emeraldinsight.com (Ade Thompson Ojo, Olusegun Felix Ayadi) Tue, 01 Jul 2014 00:00:00 +0100 The quality of reported numbers by the management: A case testing of earnings management of corporate India http://www.emeraldinsight.com/journals.htm?issn=1359-0790&volume=21&issue=3&articleid=17112639&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - Quality of reported numbers by the management has always been a concern for a common shareholder on account of underlying proposition of earnings management. There are numerous models available to test the quality of these numbers, i.e. presence of earnings management. Most of these models are accrual based which have been subject to significant criticism due to estimate based approach. An alternative to the accruals approach is to use beneish profit model where it combines accruals and financial ratios and/or indexes. The present article tests fairness of these numbers and examines the magnitude of earnings management in Indian corporate enterprises by testing the beneish profit model. This paper contributes by further verifying the results of Beneish model by applying the concept of ‘quality of earnings and revenue’ to the sample units.<B>Design/methodology/approach</B> - A ‘case based’ research approach has been followed here for analyzing Indian corporate enterprises on select basis. Beneish profit model, developed specifically for testing earnings quality and detecting earnings management, has been used in the present study. The data analysis has been well supported by ‘quality measurement tools.’<B>Findings</B> - An examination of the units shows the need for improvement in the quality of earnings in the sample units there is a presence of earnings management in them. <B>Research limitations/implications</B> - The present study could be confined to only top twelve profit-making corporate enterprises in the private sector in India, leaving all other enterprises due to data non-availability. Out of 25 enterprises, there were PSUs too which had to be excluded. <B>Practical implications</B> - The present study was confined to only twelve profit-making corporate enterprises in the private sector due to sampling requirements, the scope of the units can be extended to other units in diverse sectors with different size and scale of operations. It would further verify the present discussion and also provide future enlightenment on the issue of earnings management.<B>Originality/value</B> - It is an original article which explores creative accounting practices for better shareholders’ interest. Article literatinetwork@emeraldinsight.com (Sandeep Goel) Tue, 01 Jul 2014 00:00:00 +0100