Impacts of psychological behaviors of managers on money laundering: evidence from Iran stock exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hadi Saeidi
Keyword(s):  
Money Laundering ◽  
Stock Exchange ◽  
Economic Crime ◽  
Statistical Population ◽  
Content Type ◽  
Manager Behavior ◽  
Performance Measurement Systems ◽  
Negative Impacts ◽  
Manager Performance ◽  
Managerial Overconfidence

Purpose This study aims to investigate the impacts of the psychological behaviors of managers, including entrenchment, myopia, narcissism and overconfidence, on money laundering at Iranian companies listed on the Tehran Stock Exchange. Design/methodology/approach The present study is descriptive-correlational in terms of methodology and applied research in terms of objectives. The statistical population consisted of all companies listed on the Tehran Stock Exchange during 2013–2019. A total of 150 companies were selected as samples via screening. Logistic regression was used to analyze the data and test the hypotheses in EViews v10. Findings The findings revealed that management entrenchment, managerial myopia, managerial narcissism and managerial overconfidence have significant impacts on money laundering. Originality/value This study pioneer investigating the impacts of psychological behaviors among managers on money laundering in Iran. As an economic crime, money laundering poses an adverse impact on economic growth in countries. The continuous monitoring of manager performance and the deployment of performance measurement systems could prevent the negative impacts of manager behavior on money laundering.

Investigating the impact of board characteristics on money laundering

2020 ◽  
Vol 23 (4) ◽  
pp. 751-767
Author(s):  
Shaban Mohammadi ◽  
Hadi Saeidi ◽  
Nader Naghshbandi
Keyword(s):  
Money Laundering ◽  
Financial Stability ◽  
Stock Exchange ◽  
Screening Method ◽  
Financial System ◽  
Chief Executive ◽  
Statistical Population ◽  
Content Type ◽  
Board Characteristics ◽  
The Impact

Purpose The purpose of this study is to examine the effect of board characteristics on money laundering in Iranian listed companies. Design/methodology/approach This was a descriptive-correlational study, and in terms of purpose, it was an applied research. The statistical population of this study was all companies listed in Tehran Stock Exchange during the years 2012-2018. A sample of 150 companies was selected by screening method. Data analysis and hypothesis testing were performed using logistic regression and Eviews 10. Findings The results indicated that the board bonus and CEO duality (chief executive officer duality) had a significant effect on money laundering. CEO gender also had a significant effect on money laundering. Originality/value Sound management of risks related to money laundering by the board of directors is associated with stability, soundness and overall health of a country's financial system, which enables the integrity of the international financial system by meeting the Basel Committee goals, including strengthening the regulations, monitoring and improving current procedures, promoting financial stability and maintaining and enhancing a good corporate reputation; however, banks and other financial institutions are exposed to more serious risks, especially the reputation risk, operational risk, etc., if management does not play an effective role in the fight against money laundering. If management considers efficient and risk-driven policies and procedures in the fight against money laundering, then many problems and losses as well as many costs, including failure to collect receivables and to bring legal proceedings, can be prevented.

The relationship between narcissism, managerial overconfidence and comparability of financial statements of listed companies

2021 ◽  
Vol 19 (5) ◽  
pp. 681-700
Author(s):  
Mohammad Almaleki ◽  
Mahdi Salehi ◽  
Mahdi Moradi
Keyword(s):  
Stock Exchange ◽  
Chief Executive ◽  
Financial Statements ◽  
Business Environment ◽  
Multiple Regression Model ◽  
Content Type ◽  
Institutional Settings ◽  
Managerial Overconfidence ◽  
The Impact ◽  
The Relationship

Purpose This study aims to investigate the impact of managerial narcissism and overconfidence on financial statements’ comparability. In other words, this paper seeks to answer the question of whether the personality characteristics of managers may affect the level of financial statements’ quality of commercial entities or not. Design/methodology/approach The research hypotheses are tested using a sample of 896 observations taken from the Tehran Stock Exchange and 245 observations from the Iraqi Stock Exchange during 2012 and 2018 using the multiple regression model based on the combined data technique. Findings The findings show that managerial narcissism is positively and significantly associated with Iran’s financial statement comparability. In contrast, Iraqi data articulate a negative association between these two variables. This paper finds that Chief Executive Officer overconfidence and financial statements’ comparability are negatively related in both countries. Following the market variation, the different findings suggest that institutional settings such as the general managerial style, adopting international accounting standards (now IFRS) leading to the extent of auditing market globally in Iraq and suffering from international sanctions in Iran, the governing business environment may play an allocative role in preparing financial statements. Originality/value The present research is the first research conducted in two emerging markets (Iran and Iraq) examining the relationship between managers’ narcissism and overconfidence and financial statements’ comparability. Therefore, the present research in this area can significantly contribute to the development of science and knowledge.

The essential role of the investigation in fighting economic crime in Italy

2016 ◽  
Vol 23 (2) ◽  
pp. 465-480 ◽  
Author(s):  
Domitilla Vanni
Keyword(s):  
Money Laundering ◽  
Comparative Method ◽  
Economic Crime ◽  
European Convention ◽  
Right To Privacy ◽  
Content Type ◽  
Community Law ◽  
The Law ◽  
Financing Of Terrorism ◽  
The Right

Purpose This paper aims to analyse the evolution of European anti-money laundering discipline passing from the First Money Laundering Directive 91/308/EEC, that was only referred to banks and financial intermediaries, that has been furthermore extended to some activities and professions outside the financial sector. The research examines the different steps done buy Italian Legislation in the field of economic crime: at first Law n. 14/2003 of 3 February 2003 (Community Law 2002), they transposed the 2001 Directive 2001/97/EC and then the Law n. 56/2004 of 20 February 2004, that has implemented Directive 2001/97/EC. Now it is urgent to implement Directive 2005/60/EC that has extended the scope of the legislation, including the fight against the financing of terrorism and modified anti-money laundering obligations. Design/methodology/approach This paper deals with the Legislations of some European States (in particular UK and Italy) interpreting them by a comparative method. Findings This paper has put in clear some differences and some analogies between national legislations of different countries. Research limitations/implications In Italy, at first Law n. 14/2003 of 3 February 2003 (Community Law 2002), has transposed the 2001 Directive 2001/97/EC and then the Law n. 56/2004 of 20 February 2004, has implemented Directive 2001/97/EC. In 2005, Directive 2005/60/EC has extended the scope of the legislation, including the fight against the financing of terrorism and modified anti-money laundering obligations. Practical implications In the context of economic crime, capital investigations represent one of the most effective tools to fight the activities of organized crime in the phase of managing wealth illicitly produced and its immission in the circuit of the legal economy. Social implications The need of fighting economic crime must always be harmonized with the protection of right to privacy that has been acknowledged by Article 8 of the European Convention of Human Rights of 1950 as a fundamental right. Originality/value This paper develops the need to balance the right to privacy of every European citizen (Article 8 CEDU) with investigative power exercised by Public or Private Authorities, considering the possibility to comprise the first – if necessary – to allow the regular exercise of the second.

Investigating the impact of audit features on money laundering

2020 ◽  
Vol 23 (4) ◽  
pp. 913-930
Author(s):  
Shaban Mohammadi ◽  
Nader Naghshbandi ◽  
Zahra Moridahmadibezdi
Keyword(s):  
Money Laundering ◽  
Audit Quality ◽  
Screening Method ◽  
Audit Fees ◽  
Statistical Population ◽  
Content Type ◽  
Quality Audit ◽  
Auditor Tenure ◽  
Audit Fee ◽  
The Impact

Purpose The purpose of the present study is to investigate the impact of audit features, including audit quality, audit fees and auditor tenure on money laundering in Iranian stock companies. Design/methodology/approach This research is descriptive-correlational and applied in terms of purpose. To evaluate the audit features, variables including audit quality, audit fee and auditor tenure were used. The statistical population of this study includes all companies listed in Tehran Stock Exchange and the research period from 2012 to 2018. A sample of 150 companies was selected by the screening method. In this study, logistic regression and Eviews 10 software were used for data analysis and hypothesis testing. Findings The results showed that variables including audit quality, normal audit fee and auditor tenure have a significant effect on money laundering. Originality/value Observing money laundering rules and regulations for businesses involves is a critical issue. In auditing the financial statements of the business units subject to these laws, the auditor reviews their actions to obtain reasonable assurance of guaranteeing the money laundering laws, evaluates their effectiveness and gains approval of managers regarding observing laundering regulations. In this regard, the auditor is required to report definitive or suspected money-laundering cases or its certain or suspected evidence to the relevant authorities. Although the law prohibits the auditor from disclosing such matters to the client, it is not necessary. It seems that even if the auditors perform non-audit functions, they should report money laundering or suspicious operations and transactions.

Auditors’ response to readability of financial statement notes

2020 ◽  
Vol 28 (3) ◽  
pp. 463-480
Author(s):  
Mahdi Salehi ◽  
Mahmoud Lari Dasht Bayaz ◽  
Shaban Mohammadi ◽  
Mohammad Seddigh Adibian ◽  
Seyed Hamed Fahimifard
Keyword(s):  
Stock Exchange ◽  
Financial Statements ◽  
Audit Fees ◽  
Financial Statement ◽  
Audit Report ◽  
Financial Reports ◽  
Statistical Population ◽  
Content Type ◽  
Listed Firms ◽  
Going Concern Opinion

PurposeThe main objective of the present study is to assess the potential impact of readability of financial statement notes on the auditor's report lag, audit fees and going concern opinion (GCO).Design/methodology/approachThe statistical population of this study includes all listed firms on the Tehran Stock Exchange (TSE) for the period of 2012–2017. The systematic elimination method is used for sampling and multiple regression and EViews software are used for testing the hypothesis models.FindingsThe obtained results show that there is a significant and positive relationship between audit report lags and readability of financial statements. Moreover, it is also revealed that readability of financial statements is positively associated with audit fees. Furthermore, the findings suggest a negative correlation between readability indexes and issuing GCOs, denoting hard-to-read statements is considered as a risk factor by auditors. Finally, the observations of our robustness tests suggest that the association between audit report lag and readability of financial statements is robust.Originality/valueThis is the first conducted investigation concerning auditor's response to the readability of financial statement notes in TSE. The outcome of current paper may pave the way for revising and developing Iranian accounting standards in order to give a fairer and clearer picture of financial reports.

Accounting conservatism and money laundering risk

2020 ◽  
Vol 33 (2) ◽  
pp. 343-361
Author(s):  
Meysam Bolgorian ◽  
Ali Mayeli
Keyword(s):  
Money Laundering ◽  
Stock Exchange ◽  
Risk Measure ◽  
Negative Relationship ◽  
Accounting Conservatism ◽  
Firm Characteristics ◽  
Firm Level ◽  
Content Type ◽  
Listed Firms ◽  
Specific Effects

Purpose This paper aims to investigate the relationship between accounting conservatism and money laundering risk. For this goal, the authors construct an index for measuring money laundering risk at the firm level for Iranian listed firms in the Tehran Stock Exchange. Design/methodology/approach In this study, the authors use a sample of 924 firm-year observation of Iranian listed firms for the period of 2012-2017. The authors use three approaches for testing our prediction that more conservative firms are less likely to be involved in money laundering activities. A balanced panel regression model has been used for testing the prediction. Findings The paper results suggest that there is a negative relationship between conditional conservatism and money laundering risk. Furthermore, the authors have shown that the result is robust to controlling for different firm characteristics variables and also industry specific effects. Research limitations/implications Further research in other financial markets is needed to confirm the results generally. Practical implications The evidence in this paper indicates that the degree of accounting conservatism contains important information which can be used by the investors and regulators for managing and controlling the risk of money laundering in the firms. Originality/value By constructing a money laundering risk measure at the firm level for the first time, the authors provide evidence on relationship between conservatism and money laundering risk in Iran.

Identifying export risks of non-oil products related to money laundering and related strategies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maryam Tanabandeh
Keyword(s):  
Risk Management ◽  
Money Laundering ◽  
Qualitative Data ◽  
Qualitative Interviews ◽  
Oil Products ◽  
Statistical Population ◽  
Content Type ◽  
Islamic Republic Of Iran ◽  
Customs Administration ◽  
Theoretical Saturation

Purpose The purpose of this study is to identify the risks associated with money laundering in the scope of non-oil products export and related strategies to manage them. Design/methodology/approach The statistical population of the research was the managers and experts of the Islamic Republic of Iran Customs Administration in Tehran. The sample needed for qualitative interviews was collected to the extent of theoretical saturation through a targeted judgment sampling. The qualitative data was analyzed by thematic analysis. In sum, 20 interviews were conducted. Findings Out of 181 subcategories extracted from verbal propositions, 41 core categories were extracted. In this way, 23 subcategories constructed final codes, 6 codes were export risks and 70 codes were final and 12 codes constructed strategy of export risk management. Originality/value This qualitative study provides the first exploration of the state-of-art on export risk management and money laundering.

Follow the money to achieve success: achievable or aspirational

2017 ◽  
Vol 24 (3) ◽  
pp. 425-436 ◽  
Author(s):  
Nicholas Alan McTaggart
Keyword(s):  
Law Enforcement ◽  
Literature Review ◽  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Organised Crime ◽  
Economic Crime ◽  
Content Type ◽  
Terrorist Financing ◽  
The Subject

Purpose The purpose of this paper is to highlight the extent to which organised crime and the environment have altered in relation to money laundering and terrorist financing and to explore whether strategies to “follow the money” have been successful. Design/methodology/approach This paper is based on personal analysis and involvement as a practitioner in law enforcement and includes a broad literature review on the subject of terrorist financing and money laundering. Findings Money laundering, terrorist financing and economic crime activity are being disguised in the “noise” of business by specialists that have become very adept at their craft. Financial institutions and lawmakers have invested heavily in countering money laundering and terrorist financing. However, its real effectiveness is somewhat doubtful. Originality/value This paper serves to stimulate further discussion and research on how all actors can increase collaboration and co-operation to increase the effectiveness of disruption strategies associated with these classes of crime.

Interactive performance measurement systems, self-profiling, job challenge and individual performance

2019 ◽  
Vol 36 (1) ◽  
pp. 87-97
Author(s):  
Muhammad Dahlan ◽  
Yuliansyah Yuliansyah ◽  
Arief Fadhilah ◽  
Muafi Muafi ◽  
Abdulrahman I. Al Shikhy ◽  
...  
Keyword(s):  
Performance Measurement ◽  
Service Sector ◽  
Stock Exchange ◽  
Individual Performance ◽  
Open Communication ◽  
Content Type ◽  
Interactive Performance ◽  
Measurement Systems ◽  
Data Points ◽  
Performance Measurement Systems

Purpose This study aims to investigate the extent to which interactive performance measurement systems (IPMS), self-profiling and job challenge can improve individual performance. Design/methodology/approach The authors study the service sector in companies listed on the Indonesian Stock Exchange. From 200 distributed questionnaires, they obtain 89 usable data points, which they analyse using SmartPLS. Findings The authors find that IPMS improves both self-profiling and job challenge. Both variables significantly boost individual performance. Research limitations/implications This study implies that managers can open communication channels to a subordinate to increase individual self-profiling that leads to the improvement of job challenge to generate excellent performance. Originality/value This study investigates the importance of self-profiling and job challenge at middle- to lower-level employees in the service sector who receive less attention in the field of management accounting.

The effect of managerial overconfidence on the conditional conservatism and real earnings management

2020 ◽  
Vol 11 (3) ◽  
pp. 708-720
Author(s):  
Mahdi Salehi ◽  
Mahmoud Lari DashtBayaz ◽  
Somayeh Hassanpour ◽  
Hossein Tarighi
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Research Literature ◽  
Real Earnings Management ◽  
Financial Problems ◽  
Content Type ◽  
Conditional Conservatism ◽  
Managerial Overconfidence ◽  
The Impact

Purpose This study aims to investigate the effects of managerial overconfidence on conditional conservatism and real earnings management among companies listed on the Tehran Stock Exchange (TSE). Design/methodology/approach In this paper, the authors used the model of Ball and Shivakumar (2006) for measuring the effect of moderating overconfident management on conditional conservatism in accounting; moreover, the model of Roychowdhury (2006) is used for evaluating the relationship between managerial overconfidence and real earnings management. The study population consists of 1,144 observations and 143 firms listed on TSE over an eight-year period between 2008 and 2015. The statistical model used in this paper is a multivariate regression model; besides, the statistical technique used to test the hypotheses is panel data. Findings Consistent with the expectations, the results showed that there is a negative relationship between managerial overconfidence and conditional conservatism. Furthermore, the findings suggest that managerial overconfidence is negatively connected with real earnings management. This implies that when Iranian managers have many financial problems, they do not engage in real earnings management, as the real earnings management does not increase the value of the companies in the long run and even it cause damage to them. Originality/value This is one of the most important research that simultaneously surveys the impact of managerial overconfidence on conditional conservatism and real earnings management in a developing market called Iran. What really sets this study apart from other papers is that most Iranian firms between 2008 and 2015 because of economic sanctions faced severe financial problems. From this perspective, this study contributes to the research literature by expanding the knowledge of conservatism in the emerging economies.

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