Interaction effects of professional commitment, customer risk, independent pressure and money laundering risk judgment among bank analysts

Sanusi, Zuraidah Mohd; Isa, Yusarina Mat; Ahmad-Bakhtiar, Ahmad Haziq; Mat-Jusoh, Yusri Huzaimi; Tarjo, Tarjo

doi:10.1108/jmlc-05-2021-0046

Cited by 6 publications

(9 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…There are rooms for renewal of Client Due Diligence (CDD) methodologies and risk assessment exercises that can be explored for contribution toward strengthening financial system AML control. It is only recently that money laundering risk judgment among bank analyst and compliance officers received attention by academic researchers (Jamil, Mohd-Sanusi, Mat-Isa, & Yaacob, 2022;Mohd-Sanusi et al, 2022). These studies look at risk rating judgment which determines the level of compliance monitoring (Standard Due Diligence/Enhanced Due Diligence) or SAR reporting that should be imposed by the banks on their clients.…”

Section: Discussionmentioning

confidence: 99%

Estimating reliability of scale development in money mule risk assessment among financial crime compliance officers

Rani¹,

Zolkaflil²,

Nazri³

2023

5007

View full text Add to dashboard Cite

The threat of money mule syndicate continues to undermine the stability of financial system. Over the years, money mule syndicate has helped to launder ill-gotten funds by colluding as intermediary. The defense of financial system from ensuing money mule problem lies in the responsibility of financial crime compliance officers. Submission of Suspicious Activity Report (SAR) by these officers helps in combatting money mule phenomenon at the enforcement level. Hence, the building of money mule risk assessment among financial crime compliance officers is unequivocally critical. This paper presents the estimation of reliability of instrument developed to measure the novel money mule risk assessment based on Judgment and Decision Making (JDM) theory. Professional self-awareness, task complexity and AML software astuteness are the constructs influencing financial crime compliance officers’ risk assessment in money mule investigation at bank’s level. An instrument with 118 items was developed and disseminated digitally for pilot test. The distribution of instrument targeted financial crime compliance officers working for financial institutions in Malaysia. A total of 31 respondents from commercial banks in Malaysia participated in the pilot test. The four constructs score Cronbach’s values above 0.80 which show good and satisfactory reliability for the next phase of data collection.

show abstract

Section: Discussionmentioning

confidence: 99%

Estimating reliability of scale development in money mule risk assessment among financial crime compliance officers

Rani¹,

Zolkaflil²,

Nazri³

2023

5007

View full text Add to dashboard Cite

show abstract

“…DeZoort and Harrison (2018) proved that internal auditors feel committed to their profession and are responsible for detecting fraud in financial statements, misappropriation of assets and corruption. Furthermore, professional commitment increases the sense of responsibility to detect the risk of money laundering so that management can manage this risk properly (Mohd-Sanusi et al, 2022). Auditors must be vigilant in carrying out their responsibilities in detecting fraud because auditors try to protect and maintain their reputations (Alleyne et al, 2010).…”

Section: Professional Commitment and The Ability To Detect Fraudmentioning

confidence: 99%

“…The internal auditor's ability in detecting fraud should need to be increased, considering that internal audit is one of the controls owned by the organization to minimize the occurrence of fraud, and internal audit acts as one of the early detection media that is relatively reliable by the organization (ACFE, 2019). Auditors' abilities to detect fraud are based on knowledge that includes fraud schemes, red flags, related matters, fraud triangle, research, issues, steps involved in its investigation and professional skepticism (Moeller, 2016).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Effects of professional commitment, commitment to ethics, internal locus of control and emotional intelligence on the ability to detect fraud through reduced audit quality behaviors

Yulianti

Zarkasyi

Suharman

et al. 2023

JIABR

View full text Add to dashboard Cite

Purpose This study aims to examine the effect of professional commitment, commitment to ethics, internal locus of control and emotional intelligence on the ability to detect fraud through reduced audit quality behaviors. Design/methodology/approach The analysis unit is the internal auditor in internal control unit at state Islamic religious higher education in Indonesia. Data processing used covariance-based structural equation modeling using Lisrel Software and the Sobel test to verify the direct and indirect effects. Findings This study found empirical evidence that professional commitment and emotional intelligence positively impact the ability to detect fraud. Commitment to ethics and emotional intelligence has a negative effect on reduced audit quality behaviors. Furthermore, this study also provides that commitment to ethics and emotional intelligence indirectly impacts on the ability to detect fraud through reduced audit quality behaviors. Practical implications The organization periodically monitors auditors’ behaviors, especially reduced audit quality behaviors, during the audit process and encourages regulators to formulate policies related to increasing the ability to detect fraud. Originality/value This study provides knowledge regarding the driving force of internal auditors to mitigate reduced audit quality behaviors and increase the ability to detect fraud.

show abstract

“…Following the previous discussion, Figure 1 below is the conceptual framework illustrated to represent the model of this study. The model is comprised of money laundering risk judgment (Mohd-Sanusi et al , 2021; Trumbo, 1999), customer risk determinants (Arasa, 2015), and regulatory enforcement (Lederman, 2018).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Money laundering risk judgement by compliance officers at financial institutions in Malaysia: the effects of customer risk determinants and regulatory enforcement

Jamil

Mohd‐Sanusi

Isa

et al. 2022

JMLC

Self Cite

View full text Add to dashboard Cite

Purpose This paper aims to provide an empirical analysis of the effects of regulatory enforcement and customer risk determinants on money laundering risk judgment. The study further explores the moderating impact of regulatory enforcement on compliance officers in the banking and money service business (MSB) sectors. The analysis is conducted to find the important factors that contribute to the issues of risk judgement among compliance officers to establish effective anti-money laundering (AML) and countering financing of terrorism compliance at the financial institutions, as highlighted in the National Risk Assessment Report 2017 by the Central Bank of Malaysia. Design/methodology/approach An experimental study with four different scenarios of case studies distributed to 124 compliance officers at the banking and MSB sectors was conducted via online platforms. The paper uses a quantitative approach via structural equation modelling. Findings The result shows a significant effect of customer risk determinants and regulatory enforcement on money laundering risk judgement, taking into account competency as the control measure. A further test on the interaction effects of both determinants shows a significant result on the money laundering risk judgement. The empirical evidence indicated that regulatory enforcement influenced compliance officers’ money laundering risk judgement and suspicious transaction report submission. In other words, the banking and MSB sectors’ AML compliance significantly depends on the regulators’ enforcement activity. Research limitations/implications This study is limited to two independent variables: regulatory enforcement and customer risk determinants. Future studies may consider other factors affecting compliance officers’ money laundering risk judgement, such as technical competency, knowledge management, digitalization and technology and ethical issues. Practical implications This study provides several theoretical and practical implications. Emphasizing the excellent quality of judgement and, eventually, good quality of reporting the suspicious transactions will not be achieved merely from enforcing fines and punishment, but comprehensive measures must be taken. Increasing the competency and training, educating the compliance officers, supporting the industry and practitioners with incentives and digitalization, enhancing the campaign and awareness among the public and standardizing the policy shall be the good initiatives for the regulatory enforcement to establish. Originality/value This paper provides a valuable contribution to the body of knowledge and fulfills the significant gaps in the literature on money laundering, not to mention, the integration between behavioural studies and anti-money laundering compliance, which has scarcely been statistically evident from the research studies.

show abstract

Interaction effects of professional commitment, customer risk, independent pressure and money laundering risk judgment among bank analysts

Cited by 6 publications

References 15 publications

Estimating reliability of scale development in money mule risk assessment among financial crime compliance officers

Estimating reliability of scale development in money mule risk assessment among financial crime compliance officers

Effects of professional commitment, commitment to ethics, internal locus of control and emotional intelligence on the ability to detect fraud through reduced audit quality behaviors

Money laundering risk judgement by compliance officers at financial institutions in Malaysia: the effects of customer risk determinants and regulatory enforcement

Contact Info

Product

Resources

About