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The purpose of this paper is to extend the current research to create a conceptual framework for the Islamic perspective on money-laundering (ML) activities.

The authors use a qualitative research approach through an analysis of texts from the Holy Quran, the traditions of the Prophet Muhammad (PBUH) and Islamic scholars’ jurisprudence, as well as a literature review of the research regarding money laundering within the scope of Sharia law.

The authors document three examples of “grey areas” remaining for consideration within the context of anti-money laundering (AML) policy at Islamic banks and Islamic insurance companies: the proceeds of the secular predicate crimes of tax evasion, grey and black-market employment and inheritance issues.

The authors open new avenues for future research to examine the ML and other financial crimes by comparing different legal jurisdictions to Sharia laws, i.e. country-by-country analysis. Future research can also further grain the Sharia perspective of ML and other financial processes by examining the detailed views of different Islamic schools of thought (i.e. Hanafi, Maliki, Shafi’i and Hanbali) or by considering additional ML typologies in light of Sharia law.

The results are of interest for policymakers, whereas by acknowledging the differences between Sharia and civil laws and their complementarity, more accurate regulations can be set to establish prudent operational AML/CTF frameworks for Islamic banks and insurance companies.

For the Sharia advisory boards of Islamic financial and designated non-financial businesses and professions to enhance their monitory role as an additional layer of AML control.

To the best of the authors’ knowledge, this paper is the first to provide consideration to the distinction between the concepts of secular illegality and Sharia prohibition in determining the permissible scope of activities to which Know Your Customer compliance should apply at Islamic banks and insurance companies.

The purpose of this study is to use a spreadable form of creative expression, bookwork, to illustrate the encroachment upon the indigenous craft process of Namibian master crafters. In addition, the authors hope to inspire a dialogue regarding the value of interdisciplinary research between the arts and business and promote creative expression as scholarly output that can provide additional depth to research topics in business.

This study introduces bookwork as a research technique used to convey insights regarding the consequences to master crafters and indigenous craft practices arising from the economic activities of informal sector tourists as “outsiders” – those external to the indigenous Namibian Craft community.

In this paper, the authors convey the manner in which outsiders (such as tourists) permanently influence the traditional craft culture of indigenous communities in a largely unexplored cultural ecological niche in Namibia by purchasing low cost, easily mass produced, yet inauthentic brightly colored objects. It is likely that craft processes designed for revenue generation will encroach on the role of the master crafters in Namibian society and permanently redirect creative activities away from the indigenous practices.

The researchers acknowledge the biases they have, as outsiders, in their perception of Namibian master crafters and craft practices.

The human capital of the master crafters of Namibia is being eroded and traditional craft practices are being distorted due to incentives created by tourist preferences for cheap, inauthentic replicas of the master crafters’ work.

While some business disciplines, such as marketing, have incorporated the arts into their research, the use of creative expression in many business disciplines has been limited. The authors are the first to use bookwork to explore academic business research questions as per their knowledge. In addition, this study provides a new perspective, that of the outsider, in assessing how tourism impacts traditional Namibian Craft processes.

This study aims to identify and analyze factors affecting the business-to-business (B2B) relationship between Sri Lankan telecommunication operators and vendors. The authors conduct a survey and develop models to explain relationship strength and satisfaction. The authors find that telecommunication operators and vendors value trust, commitment, adaptation and communication. Operator satisfaction varies by perception of product quality, service support, delivery performance, supplier know-how and value for money. The vendor’s relationship strength is impacted by trust and commitment; vendor satisfaction is affected by economic factors and referencing. The authors suggest formulating management strategies using these results to strengthen business relationships.

The authors develop two conceptual models to analyze the supplier and customer perspectives. This study’s drafted models were drawn from established models and were presented to experts in the industry, both telecommunication operators and vendors. Models were modified based on experts’ feedback, and hypotheses were developed from the conceptual models, developed separately for the two perspectives. Data collection was done via questionnaires; 150 questionnaires were sent via email to identified telecommunication operators and 100 questionnaires were sent via email to identified telecommunication vendors, with follow-up emails and telephone calls to improve response rates.

This study’s findings show that employees in the telecommunication industry recognize the importance of B2B relationships. Employees of both telecommunication operators and vendors agree that stronger relationships are advantageous. The correlation and regression analysis results identify factors that affect the B2B relationship. The following factors impact the strength of B2B relationships irrespective of view point: trust, commitment and satisfaction. The following factors were found to significantly affect the strength of B2B relationships between telecommunication operators and vendors from the operator perspective: adaptation and communication.

To enhance relationship strength, the management of operator organizations should take action to improve trust, commitment and satisfaction. Demonstrating honesty and integrity when dealing with vendors and exhibiting concern for the other party’s interests can help establish trust or enhance trust in existing relationships. Displaying commitment toward the vendor will also facilitate stronger relationships. Reasonable profits for both parties and sizeable business volume will also help satisfy vendors, increasing relationship strength. Positive referencing of the vendor in industrial and public forums will improve vendor satisfaction, enhancing relationship strength. Reputational capital can be built and maintained for both operators and vendors by keeping promises and defending the other party to outsiders. For managers of telecommunications operators and vendors in other emerging markets, this study’s results are important and can inform internal business practices to support trust, commitment and satisfaction.

This study contributes to the existing literature in two ways, a focus on the telecommunication industry and a previously unexplored emerging market, Sri Lanka. In addition, this study includes an analysis of the relationship from both the operator and vendor perspectives.

The purpose of this study is to extend the Fraud Diamond Theory to celebrity Special Purpose Acquisition Companies (SPACs) and investigate their post-Initial Public Offering (IPO) stock market performance.

After obtaining a sample of celebrity SPACs from the Spacresearch.com database, fraud risk characteristics were obtained from Lexis Nexus searches. Buy and hold abnormal returns were calculated for celebrity SPACs versus a small-cap equity benchmark for time intervals after IPO, and multiple regression analysis was performed to examine the relationship between fraud risk features and post-IPO returns.

Celebrity SPACs exhibit Fraud Diamond characteristics and significantly underperform a small-cap stock portfolio on a risk-adjusted basis after IPO.

This study only examines celebrity SPACs that conducted IPOs on the NYSE and NASDAQ/AMEX and does not include those that are traded on the Over the Counter Bulletin Board (OTCBB).

Celebrity endorsement of SPAC vehicles attracts investors who may not be properly informed regarding the risk characteristics of SPACs. Accordingly, investors should be warned that celebrity SPACs underperform a small-cap equity portfolio and exhibit significant elements of fraud risk.

The use of celebrity endorsement as a marketing device to attract investment in SPACs has regulatory implications.

To the best of the authors’ knowledge, this paper is the first to examine the fraud risk characteristics and post-IPO performance of celebrity SPACs.

This paper aims to explain the fundraising and valuation processes of startups and discuss the conflicts of interest between entrepreneurs, venture capital (VC) firms and stakeholders in the context of startup corporate governance. Further, this paper uses the examples of WeWork and Zenefits to explain how a failure of stakeholders to demand an external audit from an independent accounting firm in early stages of funding led to an opportunity for fraud.

The methodology used is a literature review and analysis of startup valuation combined with the Fraud Triangle Theory. This paper also provides a discussion of WeWork and Zenefits, both highly visible examples of startup fraud, and explores an increased role for independent external auditors in fraud risk mitigation on behalf of stakeholders prior to an initial public offering (IPO).

This paper documents a number of fraud risks posed by the “fake it till you make it” ethos and investor behavior and pricing in the world of entrepreneurial finance and VC, which could be mitigated by a greater awareness of startup stakeholders of the value of an external audit performed by an independent accounting firm prior to an IPO.

An implication of this paper is that regulators should consider greater oversight of the startup financing process and potentially take steps to facilitate greater independence of participants in the IPO process.

Given the potential conflicts of interest between VC firms, investment banks and startup founders, the investors at the time of an IPO may be exposed to the risk that the shares of the IPO firms are overvalued at offering.

This study demonstrates how startup practices can be extended to the Fraud Triangle and issue a call to action for the accounting profession to take a greater role in protecting the public from startup fraud. This study then offers recommendations for regulators and standards entities.

There are few academic papers in the financial crime literature that link the valuation and culture of startup firms with fraud risk. This study provides a concise explanation of the process of valuation for startups and highlights the considerations for stakeholders in assessing fraud risk. In addition, this study documents an emerging role for auditors as stewards of proper valuation for pre-IPO firms.

Increasingly, marketing managers are asked to consider the financial implications, in terms of both book and market values, when making strategic decisions. The purpose of this paper is to investigate the role of marketing expenditures in explaining the variation in the aftermarket performance of a sample of firms conducting initial public offerings (IPOs).

Theories from marketing and finance – market-based assets (MBA) theory and signaling theory respectively – serve as the conceptual basis of this paper. The results of this study, based on a sample of 2,103 IPOs covering the 1996 to 2008 time period, suggest that increased marketing spending positively impacts aftermarket (i.e. stock price) performance.

The authors find that while short-run aftermarket performance is positively and significantly impacted by pre-IPO marketing spending, long-run firm performance measures do not appear to be impacted by pre-IPO marketing spending. Further, pre-IPO marketing spending does not incrementally reduce underpricing or improve long-run performance when the IPO takes place during extreme market conditions such as recessions or hot markets, and these results are important to the shareholders and potential investors in the firm.

Theoretically this paper advances the literature on the marketing-finance interface by extending the MBA and signaling theories. For practice, the results indicate that spending more money on marketing before the IPO and disclosing this information produces positive bottom-line results for the firm.

While Luo (2008) documents a significant relationship between the firms’ pre-IPO marketing spending and IPO underpricing, few studies explore the impact of marketing spending on stock price performance beyond the first day of trading. This paper makes three unique contributions. First, the authors extend Luo’s study by investigating the effect of marketing expenditures on underpricing during extreme market conditions. Second, the authors are the first to examine IPO performance in the long-run as well as the short-run. Finally, the authors assess how long-run performance is impacted by marketing spending during extreme market conditions. The findings of this study has implications for managers and shareholders of firms considering going public through a traditional IPO.

The purpose of this study is to describe the present taxonomy of money, summarize potential central bank digital currency (CBDC) regimes that central banks worldwide could adopt and explore the implications of the introduction of each of these CDBC regimes for money laundering through the lens of the regulatory dialectic theory.

The methodology used in the analysis of significant recent events regarding the progress of central banks in establishing a CBDC and the implications for money laundering under a CBDC regime. This paper also reviews the literature regarding the Regulatory Dialectic to highlight potential innovative responses of money launderers to circumvent the controls generated through the implementation of a CBDC.

This study examines the impact of Kane’s regulatory dialectic paradigm on the feasibility of money laundering under a CBDC regime and identifies potential avenues that would be available for those seeking to launder money, based on the form a CBDC would take.

This paper is unable as of yet to empirically evaluate anti-money laundering (AML) tactics under a CBDC regime as it has not yet been fully implemented.

Many central banks worldwide are evaluating the structure of and introduction of a CBDC. There are a number of forms that a CBDC could take, each of which has implications for individual privacy and for entities involved in AML efforts within financial institutions and the regulatory community. The paper has implications for AML experts who are considering how AML procedures would change under a CBDC regime.

The regulatory dialectic predicts that regulatory response reactive, rather than proactive when it comes to socially undesirable phenomena. As central banks and governments seek to divert economic activity away from the laundering of the proceeds of illicit activity, there are tradeoffs in terms of a loss of privacy. The regulatory dialectic predicts a corresponding innovative response of those who wish to undermine the controls generated through the establishment of a CBDC.

To the authors’ knowledge, this is the first paper to explore the impact of a potential CBDC on money laundering and the potential innovative circumventions within the paradigm of the Regulatory Dialectic.

The purpose of this study is to describe the evolution of fraud schemes with historically conducted with fiat money in physical space to the crypto-assets in digital space as follows: ransomware, price manipulation, pump and dump schemes, misrepresentation, spoofing and Ponzi Schemes. To explain how fraud schemes have evolved alongside digital asset markets, this study applies the space transition theory.

The methodology used is a review of the media regarding six digital asset fraud schemes that have evolved from physical space to virtual space that are currently operational, as well as a review of the literature regarding the space transition theory.

This paper finds that the digital space and digital assets may facilitate pseudonymous criminal behavior in the present regulatory environment.

The field is rapidly evolving, however this study finds that the conversion from physical to virtual space obfuscates the criminal activity, facilitating anonymity of the perpetrators, and creating new challenges for the legal and regulatory environment.

This paper finds that the digital space and digital assets may facilitate pseudonymous criminal behavior in the present regulatory environment. An understanding of the six crypto-asset fraud schemes described in the paper is useful for anti-financial crime professionals and regulators focusing on deterrence.

The space transition theory offers an explanation for why digital space leads criminals to be better positioned to conduct financial crime in virtual space relative to physical space. This offers insights into behavior of digital asset fraudster behavior that could help limit the social damage caused by crypto-asset fraud.

To the authors’ knowledge, this paper is the first to detail the evolution of fraud schemes with fiat money in physical space to their corresponding schemes with digital assets in physical space. This study is also the first to integrate the space transition theory into an analysis of digital asset fraud schemes.

The purpose of this paper is to describe the progression from trade-based money laundering to service-based money laundering using the Regulatory Dialectic Theory with an explanation for the success of this progression arising from Agency Theory.

The authors provide a literature review regarding agency theory and the regulatory dialectic as the framework to examine service-based money laundering using three documented case studies. Using the caselet approach, this paper demonstrates that innovation in financial crime typologies is ongoing.

The short cases in this paper illustrate the factors related to the regulatory dialectic theory that have yielded innovation in service-based money laundering.

This paper examines only three recent SBML innovations.

Service-based money laundering represents an incremental advancement in money laundering beyond trade-based money laundering, in part supported by agency conflicts between financial intermediaries and stakeholders.

Managers and regulators should take into account that typologies will change as predicted by the regulatory dialectic and that the regulatory response can be burdensome to financial sector entities. This paper also provides recommendations for managers and regulators.

To the best of the authors’ knowledge, this paper is the first to uncover new innovations in SBML in a high-risk geographic region.

The purpose of this paper is to examine failures in internal and external controls associated with sovereign wealth funds (SWFs), using three caselets to illustrate the fraud triangle theory factors.

This study uses a qualitative research approach. Caselets are used to illustrate the fraud triangle factors associated with SWFs.

Ideally, SWFs would be characterized by opacity and the strategic flexibility to advance political goals, but this operational agility facilitates an environment ripe for fraud, in large part because there is little transparency with regard to their regulatory structure. Elements of the fraud triangle inherent in the structure of SWFs contribute to the fraud found in the three case examples.

The authors use three SWF fraud cases rather than statistical sampling of all SWFs, which limits the generalizability of the findings. Future research should explore additional recommendations for the evaluation of SWF governance.

The overlap between public sector governance and SWF governance creates an environment amenable to fraud, and as a result, fraud has occurred in several SWFs. Governance recommendations should take into account the lessons learned from previous SWF fraud cases.

Ideally, SWFs would be characterized by opacity and the strategic flexibility to advance political goals, but this operational agility may also facilitate an environment ripe for fraud, in large part because there is little transparency with regard to their regulatory structure.

To the best of the authors’ knowledge, this paper is the first to identify the fraud triangle risk factors associated with sovereign wealth funds using SWF fraud caselets.