Search Results (13)

This research presents a novel framework and experimental results that combine zero-knowledge proofs (ZKPs) with private blockchain technology to safeguard whistleblower privacy while ensuring secure digital evidence submission and verification. For example, whistleblowers involved in corporate fraud cases can submit sensitive financial records anonymously while maintaining the credibility of the evidence. The proposed framework introduces several key innovations, including a private blockchain implementation utilising proof-of-work (PoW) consensus to ensure immutable storage and thorough scrutiny of submitted evidence, with mining difficulty dynamically aligned to the sensitivity of the data. It also features an adaptive difficulty mechanism that automatically adjusts computational requirements based on the sensitivity of the evidence, providing tailored protection levels. In addition, a unique two-phase validation process is incorporated, which generates a digital signature from the evidence alongside random challenges, significantly improving security and authenticity. The integration of ZKPs enables iterative hash-based verification between parties (Prover and Verifier) while maintaining the complete privacy of the source data. This research investigates the whistleblower’s niche in traditional digital evidence management systems (DEMSs), prioritising privacy without compromising evidence integrity. Experimental results demonstrate the framework’s effectiveness in preserving anonymity while assuring the authenticity of the evidence, making it useful for judicial systems and organisations handling sensitive disclosures. This paper signifies notable progress in secure whistleblowing systems, offering a way to juggle transparency with informant confidentiality. Full article

Spot Bitcoin Exchange Traded Products (ETPs) are financial instruments enabling Bitcoin to be traded on traditional brokerage platforms, reducing the risks associated with direct Bitcoin exposure while addressing fraud and market manipulation concerns. This study examines the adoption of Spot Bitcoin ETPs, emphasizing the roles of financial and digital literacy, market dynamics, and regulatory frameworks in influencing individual investor behavior. Based on a survey of 428 U.S. respondents, financial literacy and early adopter traits were found to significantly enhance adoption likelihood (β = 0.458, p < 0.001). Government factors, such as compliance guidelines and tax policies, improved investor confidence and adoption rates (β = 0.409, p < 0.001). Market factors, including volatility and sentiment, played a notable yet secondary role (β = 0.34, p < 0.001). Institutional investment mediated the effects of regulatory and market dynamics on individual adoption, legitimizing Spot Bitcoin ETPs and fostering trust (β = 0.298, p < 0.001). The findings emphasize the need for clear regulations, robust disclosure requirements, and investor education to enhance adoption. Policymakers should focus on regulatory transparency to build investor confidence, while financial institutions can advance adoption by promoting financial and digital literacy. This study contributes to understanding how individual, market, and regulatory factors collectively drive the integration of regulated cryptocurrency products into mainstream finance. Full article

One of the fundamental components of internal controls, a whistleblowing system (WBS) is crucial for preventing fraud, addressing irregularities, and enhancing good governance. The purpose of this study is to investigate the impact of whistleblower disclosures on earnings management in Saudi Arabia’s Takaful Insurance (TKI) sector between 2017 and 2023. To this end, a whistleblowing index was constructed as a tool to evaluate the whistleblowing framework’s effectiveness. Using the Dynamic Generalized Method of Moments (GMM) to account for endogeneity, it was found that most Saudi insurance companies increased their efforts to disclose information about whistleblowers, which significantly reduced earnings management practices. Specifically, the study concludes that the size of the audit committee (ACS) significantly and negatively affects how insurance businesses manage their earnings when a whistleblower system is in place. Additionally, there is a notable and adverse effect on earnings management from board size (BSZ), the percentage of non-executive independent members (PNIM), and Shariah board size (SBS). However, it was found that earnings management is unaffected by the frequency of board meetings (BMFR). This study adds to the body of knowledge by demonstrating how corporate governance enhances the effectiveness of the whistleblowing system. Full article

This study examines the influence of fraud disclosure (FR_DISC) in annual reports on the financial stability of Takaful insurance (TKI) in Saudi Arabia over the period of 2014 to 2022. Moreover, the current study aims to explore the mediating impact of Shariah board size in shaping this relationship using agency theory and examines whether the different Islamic governance attributes could affect this stability differently. Using the dynamic generalized method of moments (GMM) approach to address the possibility of endogeneity, it was found that FR_DISC is significantly negatively related to the financial stability of a sample TKI. We also provide evidence that the larger the size of a Shariah board, the less FR_DISC affects TKI stability. Furthermore, significant negative influence of ownership concentration and the proportion of non-executives’ independent board members on the stability of insurance companies was also observed. Overall, our analysis reveals several significant challenges if accounting and whistleblowing are to contribute to financial stability. Full article

This study examines the impact of executives implicated in fraud on firms’ investment decisions using publicly disclosed Accounting and Auditing Enforcement Releases (AAERs) of the U.S. Securities and Exchange Commission (SEC), aiming to address the underexplored aspect of rationalization within the fraud triangle. AAERs summarize enforcement actions subject to civil lawsuits brought by the SEC in federal court. Executives implicated in fraud often display abnormal attitudes to justify accounting irregularities, prompting an investigation into how abnormal investment decisions are used for rationalizing fraud, given their critical role in a firm’s long-term sustainability. We utilize bootstrap analysis to address the non-normality of fraud firms in our sample, and to acquire multiple bootstrap samples that represent the fraud population, thereby bolstering the reliability of our statistical analysis. Analysis of AAERs spanning from 1981 to 2013 reveals that implicated executives, particularly CEOs and CFOs, tend to make abnormal investment decisions, and that collusive fraud exacerbates this behavior. Notably, such executives lean towards overinvestment, particularly in R&D expenditure, to hide or justify fraud; the duration of fraud amplifies its impact on investment decisions. By shedding light on the rationalization aspect of the fraud triangle, this research contributes valuable insights for investors, regulators, and academia, emphasizing the significance of public disclosure of fraud by regulators to enhance transparency in capital markets and to alert capital market participants. Furthermore, this study underscores the importance of ethics-focused education in accounting to prevent corporate fraud. Full article

Introduction: Social media has become a prevalent platform for survey dissemination, despite the paucity of literature on this topic. The purpose of this paper is to outline the benefits and drawbacks of and best practices for social media-based surveys. Methods: We performed a scoping review of this topic and explored different strategies commonly employed for conducting efficient health care surveys via social media platforms. Results: The main advantages of social media-based surveys are the convenience and flexibility of survey design, their relatively low cost, the anonymity of responders, and the ability to reach a broader population of responders across geographical boundaries. Several measures can be adopted to avoid issues inherent in this approach, such as data disruption and response duplication, as well as to enhance ethical behaviors and consent compliance. We discuss limitations associated with unclear distribution of survey respondents and outline survey fraud as a major impediment to the online propagation of surveys on various social media platforms. Discussion: The use of social media to disseminate surveys on various medical specialty topics has garnered global participation, particularly during the COVID-19 pandemic. Ethical codes of conduct emphasize the need for professionalism and truthfulness, and disclosure of potential conflicts of interest on the part of respondents, and high-quality survey research on the part of researchers. Conclusion: We advocate for the novel use of social media to promote large and diverse health care surveys. Additional studies should further explore the use of emerging social media platforms for survey dissemination and their impact on health care research. Full article

As the focus of capital market supervision, financial report fraud has shown a development trend of enormous numbers, complex transactions, and hidden means in recent years. To improve audit efficiency and reduce the dependence on non-financial data, the study only uses the structured original data in the financial report to constructs a new fraud identification model, which can quickly detect fraud in China. This study takes the listed companies in China from 1998 to 2016 as research samples and selects 28 sets of raw data from financial reports. Then, this study compares the detection effectiveness of two single classification machine learning algorithms and five ensemble learning algorithms on fraud detection. Compared with single classification machine learning algorithms, the results show that ensemble learning algorithms are generally better at detecting fraud for Chinese listed companies, and the stacking algorithm performs the best. The study results provide direct evidence for rapid fraud detection using financial report raw data and ensemble learning algorithms. The study first proposes a stacking algorithm-based financial reporting fraud identification model for listed companies in China, which provides a simple and effective approach for investors, regulators, and management. It can also provide a reference for the detection of other fraud scenarios. Full article

The impact of high-speed railway (HSR) on corporate behavior has recently attracted both practical and theoretical interest. In this paper, based on a sample of A-share listed companies from 2007 to 2020 in China, we use a difference-in-difference model to explore the impact of HSR openings on corporate fraud and analyze its mechanism. We find that HSR introduction has several important implications. First, it reduces the tendency and frequency of corporate fraud. Second, HSR opening restrains corporate fraud by improving the external supervision level and reducing the financing constraints of the company. Third, the inhibitory effect of the HSR opening on corporate fraud is significant when the market competition is less intense, and the company’s internal control level is poor. Fourth, after distinguishing types of fraud, HSR opening can still significantly inhibit information disclosure fraud and manager fraud, but not operation fraud. These results indicate that HSR openings promote the flow of information and labor across regions, alleviating the information asymmetry of firms. Our findings are conducive to improving the governance environment of the listed companies, which provides new clues for discovering and restricting corporate fraud. Full article

Corruption in public procurement is a worldwide appearance that causes immense financial and reputational damages. Especially in developing countries, corruption is a widespread issue due to secrecy and lack of transparency. An important instrument for transparency and accountability assurance is the record which is managed and controlled by recordkeeping systems. Blockchain technology and more precisely blockchain-based smart contracts are emerging technological tools that can be used as recordkeeping systems and a tool to mitigate some of the fraud involving public procurement records. Immutability, transparency, distribution and automation are some of the features of smart contracts already implemented in several applications to avoid malicious human interference. In this paper, we discuss some of the frauds in public procurement, and we propose smart contracts to automatize different stages of the public procurement procedure attempting to fix their biggest current weaknesses. The processes we have focused on include the bidding process, supplier habilitation and delivery verification. In the three subprocesses, common irregularities include human fallibility, improper information disclosure and hidden agreements which concern not only governments but also civil society. To show the feasibility and usability of our proposal, we have implemented a prototype that demonstrates the process using sample data. Full article

This paper empirically emphasizes the existence of the audit expectation gap and its impact on stakeholders’ confidence, moderated by the active role of the financial reporting council. As a maiden attempt to portray the relationship, a higher-order model has been constituted and assessed with the pragmatic exploration, smearing the partial least squares structural equation model (PLS-SEM). The data contains 174 respondents as auditors, investors, investment and credit analysts, and regulatory agencies in Bangladesh. The study explores audit expectation gap from diverse aspects, such as auditors responsibility for fraud detection, meaning, and usefulness of the audit report, auditors providing the non-audit services, auditors’ responsibility for going concern reporting, and also an unmet expectation for the other assurance services, such as assurance on the other parts of the annual report beyond the financial statements, like management discussion and analysis and corporate social and environmental disclosure. The findings suggest that the audit expectation gap is negatively related to stakeholders’ confidence and the greater the audit expectation gap is, the lower stakeholders’ confidence is in the audit. Auditors maintaining perceived independence and improving the level of communication with users will diminish the audit expectation gap and induce stakeholders’ confidence simultaneously. Moreover, the active role of the financial reporting council acts as a moderator to ensure the auditors’ perceived independence. The result of the study motivates the policymakers to concentrate on the users’ audit-related expectations and also intends the importance of independent audit oversight. Full article

The increase in terrorism and identity fraud has forced governments worldwide to make a combined effort to enhance the security of national borders. Biometric passports are the emergent identity travel document deployed in guaranteeing the safekeeping of the entry point of the border and limiting the usage of counterfeit documents. This study analyzes users’ concerns and threats to the biometric passport delivery system in Uganda, where the first biometric passports are planned for rollout in 2019. We used a mixed approach to compute and articulate the results. Factors impacting fear of technology like disclosure of personal data, improper data transmission, and data abuse were determined. Relevance knowledge of preferred technology such as the personal experience of the technology, data privacy awareness and perceived usefulness was confirmed. Threats and attacks on the technology such as counterfeit and brute-force were identified. It is important for policymakers and security expertise to understand that biometric technologies evoke fears of privacy and public liberties infringements. Therefore, end user’s acceptance of biometric passports will be dependent on the degree of trust in the technology itself and in those operating the applications. Full article

We examine the impact in Chinese capital markets of publishing information on corporate fraud in a corporate social responsibility (CSR) report. We develop and test two competing hypotheses of “risk reduction” and “window dressing”. Based on the listed company’s CSR report, we analyze the effect of CSR disclosure on the commission of corporate fraud, fraud detection and the severity of corporate fraud. The research results show that after controlling for the firms’ characteristics and corporate governance factors, the CSR report’s information disclosures have a significantly negative relation to corporate fraud. Specifically, the CSR report’s publication reduces the information asymmetry between the insiders and the stakeholders, thus decreasing the tendency to commit fraud. Our findings support the risk reduction hypothesis but not the window dressing hypothesis. Further research shows that firms with a good CSR disclosure practice have a lower probability of committing corporate fraud and have fewer types of fraud violations, thereby mitigating the severity of corporate fraud. Full article

China has suffered frequent water pollution incidents in recent years, and information disclosure on relevant hazards is often delayed and insufficient. The purpose of this paper is to unearth the latent resistance, and analyze the institutional arrangements and countermeasures. After reviewing representative journal literature about environmental information disclosure, this paper provides a theoretical review based on a comparison of the ontological differences between stakeholder theory and fraud triangle theory. A tentative application of fraud triangle theory as a means of explaining the phenomenon is proposed. Empirical analysis is undertaken to verify the tentative theoretical explanation. Based on news reports from Chinese official news websites, content analysis on longitudinal case evidence of representative water pollution incidents is applied, to contribute to unearthing the mechanism of the latent resistance towards information disclosure. The results show that local government agencies have a dominant position vis a vis information disclosure, but that some important actors rarely participate in information disclosure, which provides a chance for local government agencies’ information disclosure to commit fraud. The phenomenon, its essence, and proposed countermeasures are discussed and explained by referring to recent governmental environmental practices in China. Promising research topics are illuminated, providing enlightenment for future study. Full article