Financial Scams Through Ponzi Schemes

This chapter investigates the relationship between financial literacy, financial sector development, and Ponzi schemes in the commonwealth of independent states (CIS) countries. It begins with an overview of the early cases of Ponzi schemes in the CIS countries by examining circumstances which formed fertile ground for the schemes to develop during initial years of independence. The study then scrutinised the situation in the member states during the later years which revealed no improvements. A closer examination of the problem discovered that the main triggers are low level of financial literacy and scarce investment alternatives. The chapter suggests that unless the level of financial literacy is raised and the financial sector is developed, Ponzi schemes will continue to thrive in the region. It concludes by providing some policy recommendations to enhance financial literacy and financial sector development, as well as necessary steps to improve financial regulations.

Legislation for Public Procurements and Disposal of Public Assets

This chapter is about corrupt practices in the public procurement cycle. Taking the example of Uganda, it identifies what takes place at each of the stages of public procurement and examines the perspectives of stakeholders regarding alleged corruption, misappropriation, and fraudulent practices during the public procurement process. It also reviews the governance systems that have been put in place to try and stem out these malpractices and ensure proper governance in the administration of public procurement. The research followed a qualitative approach aimed at getting the views of stakeholders and understanding whether what is in place is adhering to the principles of public procurement which foster good governance and value for money. The findings of the study indicate that the perception of the majority of the respondents is that corruption is pervasive in public procurement in Uganda despite good laws, regulations, and guidelines that have been put in place and that it manifests itself at all the stages of public procurement.

Combating Fraud Through Forensic Accounting

This study examines the potential application of forensic accounting in detecting and preventing of fraudulent activities in the administration of Islamic inheritance in Kano State, Nigeria. Data were collected through semi-structured interviews with some selected experts who are aware of Islamic inheritance and forensic accounting. Thematic analysis was used. The study established the nature and forms of the fraudulent activities committed in the administration of Islamic inheritance, such as non-compliance with the provision of Islamic inheritance law, hiding some inherited estate, the non-usage of professional valuers and the advice of experts, misappropriation of inherited cash, mismanagement of inherited wealth, etc. The key fraudsters include the eldest heirs, the parents of heirs (particularly mothers), court officials, estate valuers, relatives and the trustees of the deceased. The respondents strongly believe that forensic accounting could be used as a reliable instrument to detect and prevent such forms of fraudulent activities.

Forensic Audit Practices to Reduce Financial Frauds

International markets are highly competitive these days due to the globalization of the industry. Companies might manipulate this competition to gain some advantages. Also, technology has been the main force behind business growth in the past decade. The widespread use of technology and globalization also increased financial crimes. Accordingly, the auditing profession has entered into the process of institutionalization and embedded itself within institutions due to the enhanced complexity of frauds, corruption, and manipulations. One of the developments that have been happened in the field of auditing is the emergence of the “forensic auditing” profession. This chapter discusses the conceptual framework of the forensic audit and its essential role in preventing frauds and corruption.

Frauds in Unorganized Investment Schemes

Innumerable unorganized collective investment schemes' fraud cases have surfaced over time in India. However, there exists minimal descriptive literary text divulging these scams and frauds, which have drowned away the hard-earned money of millions of people. This chapter has been contributory in identifying the working models, administration, and organization of unorganized collective investment schemes (UCIS), where UCIS frauds remain the keystone of groundwork concerning the cases that have transpired over the last decade in India. The chapter aims to interpret the UCIS working models concerning UCIS fraud cases in India by exploring the various models of frauds adopted by UCIS organizers.

Determinants of Forensic Accounting

This study examined the political and environmental factors as determinants to apply forensic accounting in the North-Western states of Nigeria. The study utilized primary data through the administration of questionnaires. Partial least squares (PLS) path modeling (using smart PLS3 statistical software) was employed for the main analysis. The findings of the study indicated that both political and environmental factors are positively related to applying forensic accounting in these states. The study recommended that all political office holders and other government personnel should, even with the change of government, use their powers to ensure the right way to move forward and the continuity of state policies to apply forensic accounting. State governments should also provide an enabling environment for the applicability of forensic accounting through the provision of the required infrastructure to carry out the forensic services smoothly.

Frauds in Business Organizations

Fraud has been evolving and increasing with the change in the work environment, organizational structures, industrialization, and legislation. Money, greed, manipulation, job pressures, family needs, opportunity, politics, rationalization are the crucial reasons that lead people to behave fraudulently. The purpose of the chapter is to discuss a brief overview of theories of fraud. It presents causes that inspire individuals to commit fraud, methods for identifying fraud, and motives that encourage people to commit fraud. Management must try to eliminate the vulnerabilities that offer criminals the chance to commit fraud. Organizational leaders must be diligent, implement a robust anti-fraud strategy, and discourage all improper practices. Employee performance can also be strengthened through realistic anti-fraud preparation, and conformity with legal and regulatory obligations. Thus, fostering an ethical corporate culture is essential for fraud prevention.

Tax Disclosures in Financial and CSR Reporting as a Deterrence for Evasion

This chapter is about the mandatory disclosure of income tax as required by international financial reporting standards (IFRS) and standards issued by Portuguese regulatory bodies. The chapter also elaborates the most relevant disclosures from the perspective of corporate social responsibility (CSR). Furthermore, it highlights the most influential CSR reporting standards to answer the question that whether these standards adequately address the issue of income tax payment as a factor of CSR. Finally, it also reviews the international and Portuguese theoretical and empirical academic research available about income taxes and related subjects, such as disclosures, corporate tax as a CSR matter, and tax aggressiveness of corporations. Future research may be conducted geographical reporting of income tax expense and its relationship with the effective tax rate (ETR) and other independent variables.

The Role of Tax Systems in Preventing Corruption

The determinants of corruption have long been an important subject for research in the fields of economics and political science. Corruption was not deemed as a significant issue in the pre-democratic era and has become a serious issue later on. Corruption can be defined as “exploitation of public power to gain private gain.” It is a problem that occurs for various reasons and causes various effects. It may occur due to the occurrence of illegal activities in the political and economic system, as well as due to social and individual moral issues. Corruption has disruptive effects on the functioning of the economic, political, and social system. The aim of this study is to determine the duties of states towards a tax system to combat financial corruption. Corruption in the tax system affects the investment environment negatively, which slows down economic growth.

Firms' Characteristics and Tax Evasion

The study investigates whether the firms' characteristics, including ownership structure, audit, and familiarity affect tax evasion. The study has used the ordinary least square (OLS) to analyze cross-sectional data of 85 countries between 2007 and 2015 collected from the world enterprise survey. The study finds that the domestic, foreign, and government ownership in the firm increases tax evasion, whereas proprietorship and female ownership decreases the tax evasion. Further, the results show that familiar firms with international recognition are less inclined to evade tax. Similarly, the negative relationship between audit and tax evasion implies that the government should make it compulsory to check the financial statements of the firms by the external auditors, which, in turn, reduces the firms' tax evasion. Moreover, the firms that face more financial constraints evade more tax than the firms with access to the bank loan and solvent ones. The tax authorities should also consider reducing the corporate tax rate as the higher tax rates stimulate the firms to evade more tax.