Disentangling the Expectation Gap for Compliance Officers

Krambia‐Kapardis, Maria; Dimitriou, Salomi; Stylianou, Ioanna

doi:10.1007/978-3-030-14511-8_9

Cited by 5 publications

(17 citation statements)

References 30 publications

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“…Thus, correct identification of legal responsibilities would be warranted. Results on the group-level performance gap do not show indications for an overall gap; this is in line with Krambia-Kapardis et al (2019).…”

Section: Discussion and Recommendationssupporting

confidence: 82%

“…This would be in line with the role of compliance officers seeking to reduce risk and potential liabilities, both for the company overall and for directors personally [Institute of Internal Auditors (IIA), 2020; Miller, 2018; Nietsch, 2018]. When taking this view to the extreme, it is understandable that directors might hold unreasonable expectations in their MLROs (Krambia-Kapardis et al , 2019), for example, to guarantee the company not being used for money laundering (which is impossible but would constitute the maximum level of assurance). However, it is surprising that MLROs themselves take a similar view, believing they are required to do something that cannot reasonably be achieved.…”

Section: Discussion and Recommendationsmentioning

confidence: 85%

“…Regarding the existence of deficient standards and unreasonable expectations, Porter (1993) has argued the two gaps can be separated by the assertion being cost-beneficial to perform while assessing respondent groups as a whole. Applying the surrogate mechanism proposed by Krambia-Kapardis et al (2019), an assertion would constitute an unreasonable expectation if the majority of directors considers it to be a responsibility that MLROs should perform, but MLROs did not share this view. If MLROs were of the same view, the respective assertion would be a deficient standard.…”

Section: Resultsmentioning

confidence: 99%

“…11. The assertions were gathered from EU and German AML law, professional promulgations [German Federal Supervisory Authority (BaFin), 2020a], expert interviews and literature (Krambia-Kapardis et al , 2019; VanSandt et al , 2006). Note that AML law is not fully harmonised across all 27 Member States.…”

Section: Notesmentioning

confidence: 99%

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An expectation-performance gap between money laundering reporting officers and their directors – evidence from Germany

Haffke

2021

JMLC

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Purpose Money Laundering Reporting Officers (MLROs) carry out day-to-day anti-money laundering (AML) tasks while directors ultimately remain responsible for AML compliance. Therefore, directors’ expectations of what their MLROs do should ideally coincide with what their actual tasks to minimise liability risk. This paper aims to test for gaps between MLROs and their directors in terms of knowledge, expectations and performance of AML tasks. Likewise, it is researched whether MLROs and directors communicate well with regard to MLROs’ tasks. Design/methodology/approach This paper first develops a model for analysing the dyadic relationship between MLROs and their directors, based on the audit expectation-performance gap. Second, a paired electronic survey of MLROs and directors of German companies was conducted in autumn 2020, testing for participants’ knowledge, expectations and performance of possible AML tasks (n = 136 pairs). Findings While there is no knowledge or performance gap among MLROs and directors, expectations among them are partially unreasonable and their communication needs to be improved. Additionally, this study suggests that MLROs of German non-financial businesses are less knowledgeable, perform AML duties more poorly, and communicate less effectively with their directors. Practical implications Training of MLROs and communication with their directors need to be improved. Especially in the non-financial sector, action is urgently required. Originality/value This paper reports the results of the first paired survey of MLROs and their directors, offering unique insights into their relationship and the status of private AML efforts.

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Section: Discussion and Recommendationssupporting

confidence: 82%

Section: Discussion and Recommendationsmentioning

confidence: 85%

Section: Resultsmentioning

confidence: 99%

Section: Notesmentioning

confidence: 99%

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An expectation-performance gap between money laundering reporting officers and their directors – evidence from Germany

Haffke

2021

JMLC

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“…The diversity in academic and professional qualifications found in the surveyed compliance departments could be taken as a positive finding because different thoughts of knowledge are employed in the same department, creating diversification in schools of thought a necessary requirement in ensuring compliance and legitimacy. If one were to consider this diversity as a barrier perhaps all COs could be expected to satisfactorily complete the same professional exams or complete a postgraduate qualification in the field of financial compliance, a suggestion also made by Krambia‐Kapardis et al ().…”

Section: Resultsmentioning

confidence: 99%

Contextualizing compliance officers and their state of practice

Krambia‐Kapardis

Stylianou

Demetriou

2019

Business and Society Review

Self Cite

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The compliance officers' (CO) profession has been evolving over the last few decades. The expectations placed upon the individuals holding such a position vary across jurisdictions, but they are all expected to ensure employees and management of the business entity comply with the law. Given the limited research on CO in Europe, and the increasing public interest in this profession, the current authors have carried out a survey in Cyprus in an effort to map out and contextualize the CO' profession. The findings illustrate CO's academic and professional qualifications, their awareness of their legal liability, the level of knowledge and job performance of their duties as prescribed by law, as well as gaps in the performance of duties as expected by management, boards, and regulators. The policy implications derived from the study suggest coherence and synergies to be found through common exam and postgraduate qualification in the field of financial compliance.

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Directing Compliance Realities: The Determinants of Compliance Officer Effectiveness in Cypriot Organizations

Ado,

Ali,

Mousa

et al. 2024

Preprint

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This empirical study examines the complex dynamics influencing the effectiveness and performance of Compliance Officers (COs) within Cypriot organizations. With a focus on exploring the relationships between jurisdictional complexities, industry-specific regulations, organizational size, professional experience, Artificial intelligence-based tools, and readiness to technology adoption, this research employs a comprehensive approach to shed light on the multifaceted factors shaping CO roles. Leveraging a structural equation modelling framework, data was collected through a questionnaire survey administered to COs across diverse sectors. The results indicate that industry-specific regulations, organizational size, and professional experience significantly impact CO effectiveness, while the mediating role of AI-based tools and the moderating influence of technology adoption further enhance these relationships. The findings contribute to both theoretical knowledge and practical implications, offering insights for organizations and policymakers to optimize compliance efforts. While acknowledging limitations, this study lays the foundation for a deeper understanding of CO roles in the contemporary regulatory landscape.

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Disentangling the Expectation Gap for Compliance Officers

Cited by 5 publications

References 30 publications

An expectation-performance gap between money laundering reporting officers and their directors – evidence from Germany

An expectation-performance gap between money laundering reporting officers and their directors – evidence from Germany

Contextualizing compliance officers and their state of practice

Directing Compliance Realities: The Determinants of Compliance Officer Effectiveness in Cypriot Organizations

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