bluuebunny/crossref_metadata_2025 huggingface dataset:
And then there were four: A study of UK audit market concentration ‐ causes, consequences and the scope for market adjustment
Authors: Beattie Vivien , Goodacre Alan , Fearnley Stella
Published: June 2007

While concentration measures are a good indicator of market structure, the link with competitiveness
is more complex than often assumed. In particular, the modern theory of industrial organisation makes no clear statement regarding the impact of concentration on competition ‐ the focus of this paper is concentration and no inferences are made about competitive aspects of the market. The extent and nature of concentration within the UK listed company audit market as at April, 2002 and, pro forma, after the collapse of Andersen is documented and analysed in detail (by firm, market segment and industry sector). The largest four firms held 90 per cent of the market (based on audit fees) in 2002, rising to 96 per cent with the demise of Andersen. A single firm, Pricewaterhouse‐Coopers, held 70 per cent or more of the share of six out of 38 industry sectors, with a share of 50 per cent up to 70 per cent in a further seven sectors. The provision of non‐audit services (NAS) by incumbent auditors is also considered. As at April 2002, the average ratio of non‐audit fees (paid to auditor) to audit fees was 208 per cent, and exceeded 300 per cent in seven sectors. It is likely, however, that disposals by firms of their management consultancy and outsource firms, combined with the impact of the Smith Report on audit committees will serve to reduce these ratios. Another finding is that audit firms with expertise in a particular sector appeared to earn significantly higher nonaudit fees from their audit clients in that sector. The paper thus provides a solid empirical basis for debate. The subsequent discussion considers the implications for companies and audit firms of the high level of concentration in the current regulatory climate, where no direct regulatory intervention is planned.
The impact of e‐commerce developments on consumer welfare ‐ Information disclosure regimes
Authors: Hamilton Jennifer , Gillies Lorna E.
Published: June 2007

Information disclosure requirements are a relatively common feature of consumer protection regimes generally. In the case of retail investment products such requirements have been in place since the late 1980s. Now the European Distance Marketing of Financial Services Directive will impose a similar disclosure regime wherever a contract is concluded at a distance. But, despite the popularity of disclosure regimes with policy makers, the available evidence suggests that such regimes may not be particularly effective. The purpose of this paper is to discuss first, the extent to which disclosure regimes are underpinned by a solid understanding of consumer decision‐making behaviour, and secondly, the implications the development of the internet as a delivery channel for retail investment products might have for their effectiveness. The paper concludes that, despite the indeterminacy of consumer decision‐making research such that it fails to provide a ready model on which to (re)design disclosure regimes, the development of the internet as a delivery channel both compounds the challenges for the regulator in devising an effective disclosure regime, but also provides the regulator with an opportunity to explore the potential to deliver interactive capabilities which would enhance the potential to better influence consumer decision making. As such, the paper should be of interest to regulators, the industry (which has expressed doubts about the cost‐effectiveness of such regimes) as well as academics interested in regulatory policy.
Basel II: Vintage 2003
Authors: Cornford Andrew
Published: June 2007

This paper is a commentary on the third in the series of consultative papers (CP3) on a New
Basel Capital Accord for banks, earlier papers being issued in 1999 and 2001. While CP3 retains the overall structure of its predecessor, it contains many revisions and a more complete set of rules. Greater coherence has not, however,
been accompanied by a reduction in complexity. This is partly an inevitable consequence of attempting to set global standards for banks at different levels of sophistication. But it also reflects financial innovation and the growing complexity of banking practice, which are a continuing source of problems for regulation. Many of the revisions in CP3 in comparison with 2001 are a response to representations from governments and the financial sector in areas such as greater flexibility regarding adoption of different elements of the internal ratingsbased approach, adjustment of the risk weights for lending to small and medium‐sized enterprises (SMEs) to avoid punitively high interest charges, and a less prescriptive approach to measuring operational risk under the most advanced option for handling the subject. The Basel Committee on Banking Supervision intends to address some continuing reservations concerning the shape of the New Accord before mid‐2004. Even these further changes, however, are unlikely to bring on board major countries which have declared that they will not apply the New Accord or limit its application to a minority of their banks.
Microfinance regulation influence on small firms’ financing in Tanzania
Authors: Satta Tadeo Andrew
Published: June 2007

Small firms in developing countries continue to experience difficulties in accessing finance from formal financial institutions. This paper argues that regulating microfinance operations and activities is likely to strengthen microfinance institutions’ (MFIs) financial sustainability. This in turn could provide an important source of finance to small firms. Using the case of the microfinance industry in Tanzania, the paper aims at moving the microfinance regulation debate forward by generating a number of relevant inputs towards the formulation of a regulatory framework. This contribution probably comes at an opportune moment when the Tanzanian government is in the process of formulating a framework to regulate and supervise microfinance institutions.
Unification in financial sector supervision: The trade‐off between central bank and single authority
Authors: Masciandaro Donato
Published: June 2007

The objective of this work is to analyse worldwide trends in financial supervision architectures. The focus is on the key issue in the debate – the single supervisor versus multiauthority model – in order to build up indexes of supervision unification, essential to perform studies on the causes and effects of various supervisory regimes. First, the paper introduces a Financial Authorities’ Concentration (FAC) Index. A comparative analysis of 69 countries confirmed that an increase in the degree of concentration of supervisory powers is evident in the developed countries, and particularly in the European Union. Secondly, the paper considers the nature of the institutions to which control responsibilities are entrusted. In particular, the role the central bank plays in the various national institutional settings is examined. An index of the central bank’s involvement in financial supervision is introduced, the Central Bank as Financial Authority (CBFA) Index. Each national institutional structure can be identified with the two above characteristics. Two models are the most frequent: (a) countries with a high level of unification of powers and weak central bank involvement (single financial authority regimes); and, (b) countries with a low level of unification of powers and strong central bank involvement (central bank dominated multiple supervisor regimes). A trade‐off therefore emerges between the degree of financial sector unification and the role of the central bank. Two possible explanations of this relationship emerged: the blurring hazard effect and the monopolistic bureau effect.
Seven points financial services institutions should know about IT spending for compliance
Authors: Garcia Virginia
Published: June 2007

If financial services institutions (FSIs) do not comply with a variety of new regulations they can face criminal charges. Despite budget pressures they must therefore continue to invest in technologies in support of their compliance mandate. This paper describes the major regulations applying to FSIs and discusses IT spending to comply with those regulations.
A risk‐based approach to AML
Authors: de Wit Jos
Published: June 2007

Purpose

The purpose of this paper is to present a risk‐based approach to anti‐money laundering (AML) systems.

Design/methodology/approach

The paper covers the areas of: customer due diligence, customer acceptance, risk management and implementation.

Findings

Regulators and financial institutions need to co‐operate so that AML standards can be set within a risk‐based approach, thus enabling a country to protect itself in the best possible and affordable way.

Originality/value

The paper outlines the controversy present between financial institutions and regulators in the approach to AML.
The discovery process in civil litigation and the restrictions on disclosure of Section 348 Financial Services and Markets Act 2000
Authors: Gray Joanna
Published: June 2007

Purpose

To report and comment on the case Real Estate Opportunities v. Aberdeen Asset Managers Jersey Ltd & Ors.

Design/methodology/approach

Outlines the facts and explains the decision reached.

Findings

The Court ruled that the rules relating to the attribution of knowledge to a company of the knowledge of its individual employees meant that knowledge acquired by an employee in the course and for the purpose of his employment is properly attributable to the employer.

Originality/value

The decision is significant insofar as it provides some insight into the practical effect of Section 348 beyond the immediate circumstances where it was designed to provide confidentiality protections, namely the conduct of regulatory investigations themselves.
Money laundering: has the Financial Action Task Force made a difference?
Authors: Johnson Jackie , Desmond Lim Y. C.
Published: June 2007

Examines the involvement of the banking sector in money laundering over the last two decades, in particular the relationship between banks and money laundering when governments’ attitudes vary and change. Describes the design of the research, which uses multiple regression, Chow and dummy variable correlation, and partial correlation to compare countries before and after membership of the Financial Action Task Force (FATF). Lists the countries covered in the analysis: nine are in the FATF and nine are outside it. Lists the countries of the FATF according to whether they have a strong or weak bank/money laundering relationship: Australia, Denmark, Japan, Netherlands, and the United Kingdom have a weaker relationship (with Australia giving the best result in terms of successful governmental enforcement of the law), while Germany, Italy, Singapore and the USA have a stronger relationship. Concludes that FATF does make a difference: most member countries have weaker bank/money laundering relationships in their post‐FATF period.
Money laundering and terrorist financing: the role of capital market regulators
Authors: Jayasuriya Dayanath
Published: June 2007

Outlines the special recommendations of the October 2001 meeting on terrorist financing, which complement the 40 Recommendations of the Financial Action Task Force (FATF), and the resulting FATF plan of action; they included ratification and implementation of UN instruments, criminalising the financing of terrorism and associated money laundering, freezing and confiscating terrorist assets, reporting suspicious transactions related to terrorism, international cooperation, alternative remittance systems, wire transfers, and non‐profit operations. Deals with the background problems: the vulnerability to money laundering in the securities and futures markets and businesses, concerns about anonymity and custodial accounts, the global anti‐money laundering guidelines for private banking issued in October 2000 by the ten major international private banks in Wolfsberg, and the responsibility of capital market regulators in the fight against money laundering and terrorism.
Understanding the company audit process in the UK, Canada and USA: panacea or nuisance?
Authors: Hemraj Mohammed B.
Published: June 2007

Explains the audit process: its purpose is to check that balance sheet and profit and loss accounts have been prepared properly and give a true view of the company’s affairs. Shows why this is needed, plus the statutory requirement, engaging an auditor, the contractual relationship between accountant‐auditor and client, the audit plan, materiality (ie what is important), and internal control (ie how the company is safeguarding its assets). Focuses next on the financial report, distinguishing between qualified and unqualified audit reports: a qualified report is issued when the auditor cannot form an opinion and the financial statements do not conform to the UK GAAP, and gives an example: the Butt Mining Company and auditing firm Ernst and Young. Ends with the Polly Peck International case, where the limitations of the annual audit process were illuminated.
Implications for financial intermediaries in attacking money laundering prevention through enhancing tax law enforcement
Authors: Neville Peter
Published: June 2007

Focuses on Guernsey’s financial services industry as an example of a financial intermediary: this includes banks, fund managers, investment advisers, insurance brokers, companies and managers, and fiduciaries like company directors, company service providers and trustees. Describes the Guernsey Financial Services Commission efforts to regulate fiduciaries, which now have to be licensed by it; to educate the industry, especially fiduciaries, about money laundering and tax evasion, by means of workshops; and the strong policy it has adopted against tax evasion and money laundering and the secrecy which allows them, so that, for instance, it does not require mutual legal assistance treaties to be in place before information is passed to law enforcement agencies abroad.
Compliance and anti‐money laundering regulation in France
Authors: Bardin Geneviéve
Published: June 2007

Describes briefly how France has recently adopted stricter rules for compliance in the fight against money laundering, and the role played by regulatory authorities in improving compliance; France was the first country to implement the FATF Recommendations in 2001, it has widened the scope of sanctions against financial institutions that do not comply with their reporting obligations, and it has strengthened the position of TRACFIN (Traitement du renseignement et action contre les circuits financiers clandestins) as the agency to which suspicious transactions must be reported. Outlines the role of the compliance officer within financial institutions and their clients in ensuring that they comply with the laws and regulations.
Evolution of methods of money laundering in Latin America
Authors: Alba Ricardo M.
Published: June 2007

Introduces the measures taken in South America’s Spanish, Portuguese and French speaking countries, and in the Spanish‐speaking Caribbean, to create a framework for combating money laundering; despite this, the outcome has been poor in terms of money laundering cases prosecuted, and the black economy in the four main drug producing countries is estimated as worth around US$13 billion a year. Gives a table of 39 money laundering schemes, indicating the effectiveness of each, and outlines trends in avoidance: avoiding the use of cash, development in methods of risk and control, and techniques based on penetration or control, like the “black market peso exchange” between the USA and Colombia. Moves on to improvements made by financial institutions and authorities against money laundering, based on three elements: expanding the application of “know your customer”, analysing use of services by customers, and establishing a reliable monitoring system for suspicious transactions.
The liability of accountants and auditors under the Federal Securities Acts and the Racketeer Influenced and Corrupt Organizations Act in the USA
Authors: Hemraj Mohammed B.
Published: June 2007

Shows how the Securities and Exchange Act and the Racketeer Influenced and Corrupt Organizations Act 1970 (RICO) in the USA impose additional burdens on auditors in the detection of accounting errors, irregularities and fraud, compared with other countries like the UK; this is in addition to the generally high levels of US litigation against professional people because of factors like contingency based legal fees, class actions, and jury trials. Outlines the history of protection of investors by law since the stock market crash of 1929, the Acts’ provisions, and cases arising from them: the Securities Act is concerned with disclosure, and the Exchange Act with trading in securities. Moves on to the provisions of the RICO, which makes accountants criminally liable for mail and securities fraud and for knowingly issuing negligent audit reports, arguing that the original intentions of the Act have widened so far that accountants have become insurers of business failures at triple the losses suffered by the businesses.
Corporate flight: moving “offshore” to avoid US taxes
Authors: Johnson Jackie , Holub Mark
Published: June 2007

Shows how many US companies, which are increasingly multinational, are using offshore subsidiaries to reduce their tax liability; some are even moving their head offices abroad or “offshore”. Discusses what offshore financial centres are; key characteristics are low taxation, little supervision of depositors, and secrecy of accounts. Points out that the term offshore is confusing, since large countries can be attractive to non‐resident businesses, and so they are not a homogeneous group; within the USA itself, Delaware is a state with low taxes and so has long been used by companies which are actually based in another state. Describes how reincorporating offshore works and the problem it poses for US tax revenues; the issue is contentious, especially after September 11, but the Bush administration’s attitude remains relaxed.
Mortal dangers, moral hazard and mortgage lending by solicitors: an international perspective
Authors: Middleton David J.
Published: June 2007

Reviews the regulation of solicitors; in the UK this is self‐regulation by the Law Society. Discusses the widespread provision of financial services to clients by their solicitors, and legal cases in the UK and Australia that exemplify the mortal dangers involved in mortgage fraud and involve the Solicitors Disciplinary Tribunal; these involved misappropriation and secret profits, excessive loans, failure to keep clients informed, and close association between solicitor and borrower. Mentions the Hodgson Report in Australia, which in 2002 commented on such problems. Moves on to the S&L insolvency scandal in the USA after deregulation in 1982, and finds parallels with the UK solicitor mortgage investment schemes, even though the US schemes were run by financial institutions with their own regulators. Concludes that mortgage investment schemes must be closely regulated so that investors know the true cost of loans and any profits taken by the lawyer.
An appraisal of the Nigerian Corrupt Practices and Other Related Offences Act 2000 as an instrument against financial crimes
Authors: Chukwuemerie Andrew I.
Published: June 2007

Introduces the Corrupt Practices and Other Related Offences Act 2000 as a monumental attempt at social engineering in a country labelled as the most corrupt in the world. Examines the Act’s structure, including the detailed nature of the Commission it set up, focusing on the measures to ensure its independence and authority. Outlines the main offences under the Act, pointing that conspiracy or attempt to commit corruption is now as culpable as the offence itself. Assesses how workable the Act is; one of the main problems that could affect its effectiveness is the draftsmanship, so the courts need to adopt a liberal rather than literal interpretive approach to it, and notes that, fortunately, Nigerian courts in general are moving in this direction.
The emergence of solicitors’ tortious liability and the award of damages
Authors: Hemraj Mohammed B.
Published: June 2007

Analyses the emergence of tortious liability on solicitors and the damages awarded against them for negligence in preparing wills, ie testamentary disposition, when this causes losses to beneficiaries recognisable in law; it is no longer the case that actions by clients against solicitors are always for breach of contract. Traces how negligence has been established as an independent tort, and shows how absence of privity does not debar a claim. Discusses the landmark case of Ross v Caunters, which showed that liability could be to a third party, ie the beneficiary of a will that was made void by solicitor negligence; discusses how the duty of care was ascertained in this and other cases. Outlines the control mechanisms that a third party has to prove before a court decides that a solicitor is liable: reliance on the solicitor, whether there is a causal link between negligence and loss, proximity and foreseeability; there is also the concept of fair, just and reasonable. Covers lastly the issues of unjust enrichment of unintended beneficiaries, professional indemnity insurance, social policy objectives for awarding damages, and the bounds of liability.
Putting the crooks out of business! The financial war on organised crime and terror
Authors: Wright CB Rosalind
Published: June 2007

Focuses on the work of the Serious Fraud Office (SFO) over the last 15 years in investigating and prosecuting major fraud; the author is its Director, and the SFO supports the Financial Services Authority in enforcing the Money Laundering Regulations 1993. Shows how prevention of money laundering depends firstly on banks and financial institutions, and increasingly also on lawyers and accountants, plus those dealing with high value goods like bonds, art and antiques; banking secrecy is outdated. Outlines legislation, notably the Proceeds of Crime Act 2002 and its new provisions relating to money laundering and suspicious activity reporting, plus the SFO’s perspective on these. Moves on to the Financial Action Task Force, the new Asset Recovery Agency, legal developments, problems of enforcement in the age of the Internet, and the need for more international cooperation.
Proactive terrorist investigations and the use of intelligence
Authors: Swallow Paul
Published: June 2007

Outlines how intelligence applies in the field of terrorism, the mechanisms involved, and how they might be improved. Defines intelligence as information relating to a crime that, for whatever reason, cannot be used in court. Describes the two main organisations involved in UK terrorist intelligence, the Security Service and Special Branch, and the relationship between them: this is roughly that the Special Branches in each of the 52 police forces support the Security Service in gathering and analysing intelligence about terrorism. Concludes, however, that it is not clear which one is ultimately responsible for protecting the UK from terrorism. Discusses external bodies like Europol, and two further UK bodies, the new National Terrorist Financial Intelligence Unit and the National Criminal Intelligence Service; their interactions also appear cumbersome. Suggests that there should be a National Special Branch, and possibly a National Counter‐Terrorist Agency.
Evaluation of Canadian securities regulation: should Canada adopt the Australian ’one‐stop’ regulatory approach?
Authors: Mitchell David
Published: June 2007

Argues that Canada should follow Australia in forming a one‐stop national securities regulation system. Examines the present system, which is complex, since each province has its own securities commission, with resulting problems for ensuring compliance, attracting foreign issuers etc; it also prevents Canada meeting the aims of the International Organization of Securities Commission (IOSCO) despite the existence of the Canadian Securities Administrators. Presents an alternative proposal to the national system; this is improvement of the existing system by fortifying the CSA, and avoids the risks of establishing a new national system. Explains why this solution is not as good as a national system: there will still be 13 separate commissions, and smaller provinces may not conform to CSA decisions.
Provisions of the USA PATRIOT Act relating to asset forfeiture in transnational cases
Authors: Cassella Stefan D.
Published: June 2007

Describes how asset forfeiture works in the USA; both civil and criminal forfeiture of property are used to recover property involved in crime that crosses national borders, and each has its advantages. Shows how the Civil Asset Forfeiture Reform Act 2000 (CAFRA) and the PATRIOT Act 2001 deal with transnational crime and recovery, applying them to various possible cases: the criminal proceeds are in the USA but the defendant is abroad, the money is in the USA but the crime was committed abroad, the criminal is in the USA but the property is abroad, the crime was committed in the USA but the criminal and/or the money is abroad, and the USA needs foreign government assistance to restrain property and obtain bank records. Deals with particular issues in the last case, such as bank records, attorneys’ fees, and challenges abroad to the restraint on the merits; lastly, mentions how forfeiture of terrorist assets is now covered. Concludes that the PATRIOT Act and its predecessor, CAFRA, have given US law enforcement new powers to seize and confiscate assets involved in international crime; terrorism is the immediate focus, but all criminal activity crossing frontiers can be combated effectively.
Reflections on Roskill
Authors: Raphael Monty
Published: June 2007

Recounts how the Frauds Trials Committee, under the chairmanship of Lord Roskill, was established almost 20 years ago to deal with perceived defects in investigation, prosecution and trial of serious and complex fraud, and how different financial services and fraud investigation were then compared with today. Describes how fraudsters have become more resourceful, mobile and international. Outlines the recommendations of the Committee, for instance that a unified fraud office should be set up and that jury trials for fraud be abolished. Reports that neither of these reforms has taken place, although the Serious Fraud Office resulted from the Report. Criticises both the suggestion to abolish jury trials and the lack of resources that governments have made available for tackling the huge amount of fraud that has taken place since Roskill.
The tribunal for serious fraud ‐ the continental European experience
Authors: Huber Barbara
Published: June 2007

Outlines the extent and nature of white‐collar crime in Germany, and examines the attitudes towards sanctions against this type of offence in the work of the special tribunals in Germany and other countries. Describes how specialisation works on both prosecution and judicial levels, including the position of the court, its substantive jurisdiction, the composition of the court, special training for judges, court caseloads, sentencing practice, guilty pleas and the practice of deals. Includes shorter descriptions of the systems in other European countries: France, Austria, Italy and Spain.
The Roskill Fraud Commission revisited: an assessment
Authors: Levi Michael
Published: June 2007

Assesses the arguments for and against the establishment of an Economic Crime (or Fraud) Commission and relates these to the Roskill Committee Report’s recommendation for an independent body to monitor the effectiveness of how fraud case were conducted. Surveys the changes in the fraud scene in the fifteen years since Roskill: for instance, England and Wales have the Serious Fraud Office, a Fraud Czar was appointed for the health service, and high‐volume fraud and money laundering control have both developed. Contends that the arguments for a Fraud Commission are less clear than in 1986, partly because there is more auditing and reporting on fraud investigations, prosecutions and prevention, although there is no one body covering the whole picture.
Combating financial crime: regulatory versus crime control approaches
Authors: Croall Hazel
Published: June 2007

Identifies the key concepts in evaluating the relative merits of regulation and crime control: regulation emphasises persuasion and cooperation rather than policing, prosecution and punishment, which are associated with crime control. Relates them to the special characteristics of financial crime such as the difficulties of measuring it and morally assessing it: offences involving market regulation are sometimes regarded as “technical”. Asks how far the two approaches are mutually exclusive rather than complementary, and refers to Braithwaite’s model of an enforcement pyramid. Sets out the conditions in which regulation, including self‐regulation, is likely to work, whether criminal deterrence works, and the moral and symbolic role of criminal law. Concludes that effective regulation requires a wide range of strategies and sanctions with a balance of moral and instrumental dimensions.
Whither or wither the European Union Savings Tax Directive? A case study in the political economy of taxation
Authors: Gilligan George Peter
Published: June 2007

Describes the European Union Savings Tax Directive (EUSTD), the latest initiative in a series since the issue of global taxation within the EU emerged in 1996. Traces the EUSTD’s genesis and the reason for its inception: this was to minimise the loss of tax revenues in some member countries by slippage, as taxpayers look to ways to avoid paying tax by moving funds between tax jurisdictions. Focuses on the disagreements that have plagued the various initiatives since 1996 concerning the proposed EUSTD; these represent a struggle between fiscal sovereignty and market power, with some member states being unwilling initially to consider any more towards coordination. Discusses the effects on the EUSTD of external organisations, eg the Organisation for Economic Cooperation and Development and the Financial Action Task Force.
Part 7 of the Proceeds of Crime Act 2002: double criminality, legal certainty, proportionality and trouble ahead
Authors: Marshall Paul
Published: June 2007

Introduces the very wideranging and draconian Proceeds of Crime Act 2002 (PoCA) and its provisions under section 7 for denying the commercial and banking system to would‐be money launderers: they are intended to turn bankers, accountants and lawyers into the unofficial policemen of financial transactions, with criminal penalties for non‐compliance. Criticises the way in which the Act characterises underlying “predicate” conduct as an essential element of criminality. Gives the background to the Act, noting the novelty for English law that the Act is concerned about crimes committed abroad as well in the UK, and construes some acts as offences because they would be against the law if committed in the UK. Deals also with the concepts of single and double criminality with regard to the Criminal Justice Act 1988 S. 93A(7).
Corporate governance: directors, shareholders and the Audit Committee
Authors: Hemraj Mohammed B.
Published: June 2007

Discusses the different roles played by directors, shareholders and auditors in ensuring the success of a company. Outlines the responsibilities of the directors, pointing out the risks that directors may bully auditors; also that a persistently questioning director, especially a non‐executive director, will be labelled as a trouble maker and not be listened to. Argues that shareholders and auditors cannot be linked in a way that would effectively supervise the conduct of directors. Concludes that directors need to be properly monitored: shareholders have failed to do this, so the audit committee needs to ensure that directors do their duties. Shows how an effective audit committee can be set up.
Acts of terror, illicit drugs and money laundering
Authors: Jurith Ed
Published: June 2007

Highlights the connexions between terrorism, illicit drugs and money laundering; the author is General Counsel for the Executive Office of the President, Office of National Drug Control Policy in the USA. Describes how money laundering is intimately linked to terrorism and drug trafficking in Colombia, using the example of the Black Market Peso Exchange, a complex underground financial system to evade reporting and record‐keeping requirements of the Bank Secrecy Act. Indicates the efforts that the USA is making to deprive terrorists of the money they need to finance their activities, including Executive Order 13223 and the PATRIOT Act, and progress in international cooperation to the same end.
Reacting to cyber‐intrusions: the technical, legal and ethical dilemmas
Authors: Overill Richard E.
Published: June 2007

Introduces the subject with the classical three‐layer security paradigm for information assurance of “protect, detect, react”, noting that it leaves open the question of who or what should react, and how. Lists 15 technical possibilities for a reactive defence to a presumed intrusion which vary greatly in their degree of aggression, mentions the problem of false positives in cases of active defence strategies, and relates the strategies to relevant legal and ethical considerations. Concludes that verification of a genuine intrusion incident is often very difficult, but the cost of failure will also be high; this is linked to the asymmetric nature of information warfare, where the cost of defence is much higher than the cost of attack.
The constitutional rights of children and the Prevention of Organised Crime Act 121 of 1998
Authors: Nel Jeanne K.
Published: June 2007

Considers how the rights of children, protected under the Constitution of the Republic of South Africa and its Bill of Rights, can be reconciled with the effects of heavy fines, asset forfeiture and confiscation orders on economic offenders. Clarifies the concepts of forfeiture and confiscation. Outlines the 1998 Prevention of Organised Crime Act (POCA) and considers its provisions in relation to the position of children and young people as innocent third parties in cases of civil and criminal asset forfeiture. Includes a short discussion of corresponding provisions in US law. Suggests that, as legislation currently does not specifically provide for children, the POCA should be amended by incorporating, mutatis mutandis, provisions from the Mediation in Certain Divorce Matters Act.
US Government agencies confirm that low‐tax jurisdictions are not money‐laundering havens
Authors: Mitchell Daniel J.
Published: June 2007

Refers to the conclusion by the US Central Intelligence Agency (CIA) and State Department that low‐tax jurisdictions do not attract a disproportionate share of dirty money; the Financial Action Task Force agrees, even though it is part of the Organisation for Economic Cooperation and Development (OECD), notorious for its anti‐tax haven initiative. Points out that in fact so‐called tax havens are not money laundering centres, and that most money in tax havens is institutional investment; all rating systems of money laundering find that non‐tax havens outnumber tax havens. Argues that high‐tax nations’ laws against money laundering are not very successful, as the US Treasury estimates that 99.9% of the criminal money in the USA is laundered successfully; the laws tend to focus on process rather than results. Makes suggestions for improving international cooperation against money laundering.
The seizure, detention and forfeiture of cash in the UK
Authors: Bell R. E.
Published: June 2007

Stresses that the criminal economy is much more cash‐intensive than the legitimate economy, and explains why. Indicates the scope of the problem for crime control: that carrying illegal proceeds as cash across national border remains an important method of money laundering. Outlines the provisions of the Proceeds of Crime Act 2002 concerning powers to allow searches for cash, and the standard of proof required. Discusses the different types of evidence allowed: avoidance of the usual banking channels, previous convictions and acquittals, lack of business records, lack of an audit trail, credibility, presence of items indicating crime, criminal associates, lying and inconsistent statements, contamination of the cash by drugs, suspicious denomination of banknotes, attempts at concealment, travel destinations and arrangements, financial background, failure to cooperate, and confidential informants. Goes on to cash seizures under terrorist legislation, possible challenges to seizures as contrary to the European Convention on Human Rights, the choice between civil and criminal forfeiture, and how the investigation proceeds.
International controls of corruption: recent responses from the USA and the UK
Authors: Johnstone Peter , Brown George
Published: June 2007

Describes how the USA and UK have established many and varied tough new provisions in the fight against crime, and corruption in particular. Traces the long history of corruption and attempts to suppress it, and defines the terms bribery and corruption. Looks at the US legislation against corruption, focusing on the Racketeer Influenced and Corrupt Organizations Act (RICO) 1970 and the Foreign Corrupt Practices Act (FCPA) 1977, also the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) 1989 and most recently the PATRIOT Act 2001, which covers corruption as part of a wider response to the terrorist attacks on the USA. Moves onto UK legislation since 1889, including the OECD Convention, the Anti‐Terrorism, Crime and Security Act 2001, the draft Corruption Bill, and legislation enacted against money laundering and to seize the proceeds of crime.
Exotic embezzling: investigating off‐book fraud schemes
Authors: Buckhoff Thomas , Clifton James
Published: June 2007

Defines on‐book and off‐book fraud: the former occurs when theft takes place after the recording of money on the victim company’s books, the latter when it occurs after recording, and types of such fraud can involve billing, payroll, expenses, cheque tampering, and register disbursement. Describes methods of investigating off‐book fraud: financial statement analysis, undercover surveillance, invigilation, and admission‐seeking interviews. Gives a case study concerning the Northern Exposure club, where so much skimming occurred that only 10% profits were being made after tax instead of the 30% expected; details how the fraud investigators proceeded by generating fraud theories based on the controls, or lack of, for monitoring cash flows, then collecting and evaluating evidence, estimating the losses incurred, and so on.
Education as a new approach to fighting financial crime in the USA
Authors: Peterson Bonita K.
Published: June 2007

Describes recent attempts to help auditors fight financial crime in the USA, focusing on the new Statement on Auditing Standard (SAS). Indicates however auditors may lack sufficient training to recognise or understand fraud, and that accounting students at universities should have anti‐fraud education. Outlines the provision of the new SAS 99, which requires the audit team to brainstorm in order to detect misstatements in client accounts and maintain professional scepticism; auditors also have to question more directly in their investigations of fraud risk, and the SAS introduces the “fraud triangle” and guidelines to help assess risk factors; finally, auditors must respond to the assessments. Reports two recent fraud surveys: the Association of Certified Fraud Examiners (ACFE) found 663 fraud cases for 2002, most of them involving asset misappropriation, and the Pricewaterhouse‐Coopers 2003 survey found similarly. Concludes with a look at ACFE’s higher education programme for fraud, and that of the American Institute of Certified Public Accountants; the trend in the USA is to provide specific courses on fraud.
Preventing corporate scandals
Authors: Hemraj Mohammed B.
Published: June 2007

Defines fraud as deliberate deception to obtain illicit material gain, and includes embezzlement and asset misappropriation in the definition. Assesses what constitutes auditors’ breach of duty to clients, and who is responsible for fraud monitoring and reporting, and refers to the UK Auditing Practices Committee guidelines. Analyses some causes of failure to prevent fraud; these include lack of clear responsibility for preventing it, and regarding security as too expensive. Argues that it is the responsibility of company management to prevent fraud by maintaining proper accounting records, rather than relying on auditors to detect it, although in the UK auditors are responsible for detecting material fraud. Considers auditing an art rather than a science, and opposes suggestions that auditors should assess the financial viability of a company; auditors’ responsibilities already tend to exceed their powers as whistleblowers.
Transparency and accountability reconsidered
Authors: Osborne Denis
Published: June 2007

Explores the concepts of transparency and accountability and assesses how they can be increased, relating this to the control of corruption and to effective democracy, and recognising that the cost of transparency is diminished confidentiality and privacy. Applies this to the retrieval of the proceeds of corruption, using a case study in Italy to show how a wife’s complaint about divorce compensation led to the uncovering of corruption involving many politicians. Discusses how codes of conduct and ethics often incorporate attempts to improve transparency and accountability.
The protection of privacy and the prevention of financial crime
Authors: Frei William
Published: June 2007

Describes how important the financial sector is in Switzerland, contributing 14% to GDP, while Swiss banks have around 33% of the international asset management market; this makes the country highly exposed to instabilities and to misuse of financial institutions by terrorists. Outlines the nature of the banking secrecy that is central to Swiss banking, and its relationship to money laundering control. Shows how Switzerland is contributing to the international effort against tax fraud; it advocates a system of moderate taxation that is efficiently operated and includes severe penalties for fiscal crime, plus a withholding tax on capital income, but it does not support state supervision of all financial transactions. Indicates how the country is negotiating with the Organisation for Economic Development and the European Union over access to bank information and other tax issues.
Collaborative supply chain practices and evolving technological approaches
Authors: Pramatari Katerina
Published: June 2007

Purpose

This paper aims to give an overview of supply chain collaboration practices and the way the underlying enabling technologies have evolved, from the classical EDI approach, to web‐based and RFID‐enabled collaboration.

Design/methodology/approach

The paper discusses alternative technological approaches and the role they play in supporting collaboration. The research presented in this paper is empirical in nature, based on three different case studies from the grocery retail sector depicting different aspects of implementing supply chain collaboration practices.

Findings

From the examination of these cases, interesting lessons are derived regarding the suitability and criticality of the technological approach used to support collaboration, especially regarding the use of a centralized web‐platform as compared to the classical EDI approach and to a decentralized solution based on web services.

Research limitations/implications

Research is limited to the specific case studies and further validation of the research findings through qualitative and quantitative methods would be appropriate.

Practical implications

The paper provides support to practitioner regarding the selection of the appropriate technological approach to support collaboration. Furthermore, it gives insight regarding the maturity of current technologies in relation to collaboration requirements and to what extent can the technology be an enabler or a barrier in a collaboration initiative.

Originality/value

The paper links the technological and the supply‐chain collaboration perspective in order to derive interesting conclusions relevant to both academics and practitioners. The cases presented are quite unique and have not been widely studied, representing interesting and novel approaches to the way that technology has been employed to support collaboration practices.
Integration of web‐based and RFID technology in visualizing logistics operations – a case study
Authors: Chow Harry K.H. , Choy K.L. , Lee W.B. , Chan Felix T.S.
Published: June 2007

Purpose

To provide a new generic model equipped with a “process visualizing” feature by capturing RFID logistics data to represent different logistics processes' status, and sharing them through web‐based technology to supply chain parties.

Design/methodology/approach

In order to provide logistics service companies an effective way to manage their logistics processes and help both the up and down stream supply chain parties maximize their activities linkage within the value chain, the proposed system integrates radio frequency identification (RFID) and IT applications to optimize information flow in a supply chain. In doing so, the objective of visualizing logistics process is achieved.

Findings

It is found that the proposed model enhanced the performance of third party logistics providers and their supply chain partners in three main areas. They include a significant reduction in inventory level, a substantial drop in the chance of out‐of‐stock and, a significant improvement in the efficiency of delivery. They are among the most critical problems that often exist in a supply chain.

Research limitations/implications

The proposed model requires supply chain participants to share their process data on the web environment so as to achieve the target of collaboration. This demands the need of tight security control over the public internet.

Practical implications

This paper provides useful information and practical guidance for supply chain participants to formulate a “process visualizing featured” information system.

Originality/value

This paper provides a solution to solve common supply chain management problems and offers practical helps to supply chain participants effectively.