Analysis of Business International, Financial Crimes, and Compliance

This report examines Business International (BI), an advisory and publishing firm, and its role in assisting companies operating abroad. It also explores outcomes-focused regulation, highlighting the 15-code of conduct. The report then delves into financial crimes, including false accounting, corruption, and tax evasion, detailing their detrimental effects on both regulated firms and society. Furthermore, it outlines measures that regulated firms can implement to minimize the occurrence of such crimes, such as improved financial controls, ethical guidelines, and robust internal audits, emphasizing the importance of these approaches in safeguarding financial integrity and promoting ethical business practices. The report includes an analysis of the TESCO case as an example of false accounting.

Compliance

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
Question 2 .......................................................................................................................................4
a) define the main elements of the crime, summarising how these activities can be detrimental
to both regulated firms and wider society...................................................................................4
b) describe what regulated firms can do to minimise the possibility of such a crime occurring
and why it is believed that such an approach will be effective...................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Compliance is certification or confirmation that the individual who is doer of particular
action, supplier or manufacturer of the goods, legislations, specific standards, meet requirement
of accepted practices or terms of contract. In simple term it can be said that compliance is
conformation of rules such as particular policy, standards and laws (Bulgurcu, and Cavusoglu,
2010). Below mention assignment is divided in two parts, first is explaining business
international along with their impact on business organisation. On the other hand, second section
involve three financial crimes along with their impact on regulatory firms and wider society.
Apart from this, what major an enterprise can take so that they can minimise such crime in their
operations is also dissed in the following report.
Question 1
Business International – BI is an advisory and publishing firm which is dedicated for
helping American companies to operate in abroad. Business international was founded in 1953
by Eldridge Haynes and his son who is named as Elliott Haynes. Moreover, former president
Barack Obama work in BI as a college graduate. The same become an information source on
global business with research, advisory functions, conferences and government round-table in
add-on to its publications. Headquarter of business International is in New York City at One Dag
Hammarskjold Plaza, near the UN as well along with their major offices which is situated in
London, Tokyo, Hong Kong, Geneva etc. and network of correspondents around the world. Then
after, in 1986, Business International was acquired by the Economist Group in London and the
same is merged with Economist Intelligence Unit (Benbasat, 2010). It not only support only
particular sector companies but provide assistance to each and every organisation which need.
Outcomes- focused Regulation – It is derivable by the general principles of good
regulation and law society is controlling as well monitoring development since implementation
of SRA's which is a new outcomes-focused approach for regulating in October 2011. Outcomes
focused regulations move away rules based approach and focusing on high-level outcomes
governing practices as well quality of results for clients or customers. There are 15 code of
conduct 2011 which assist start-ups in easy development and growth of their business. These are
divided into 5 sections are as follows :-
Section : 1 You and Your client
1

 Chapter 1 Client care – First chapter includes all the standard which must be followed
by the organisation while providing services to their customers. Along with this,
company have to handle complaints of customers and solve their queries also. For
instance, if any start-up business will care for their clients then they will get satisfied
from their services as well became loyal towards firm.
 Chapter 2 Equality and diversity – Every client is equal for the organisation so it is
duty of employees who are working in business to treat equivalently their customers.
Along with this there is requirement of diversity in services (ERAS, 2015). For instance,
if an enterprise is providing equal services or treatment to their customers as per the
equality Act 2010 then they can attract large number of clients with such services and
diversify goods.
 Chapter 3 Conflict of interest – It should be kept in mind by the employees that they
show consider only client conflict not act on the personal issues of own. For instance, if
any start-up staff members start reacting on own issues with their customers then such
practices gives negative effect on image of business in market area.
 Chapter 4 Confidentiality and Disclosure – This chapter involves that company should
not have to disclose confidential data of their customers with others. For example, if start
ups will not reveal data of their clients then such practices assist them in making
customers loyal towards them.
 Chapter 5 Your client and the court – In this chapter defined the various
responsibilities and duties of clients and courts for the purpose of lawyer exercises where
act as an advocate (Erasmus, and Daha, 2010). This states as company have to be care
about the rules and regulation of court for avoiding the misleads.
 Chapter 6 Your client and introduction to third parties – This chapter is related with
interaction and references in which company referring clients to third parties. In this
procedure, lawyers and non-lawyers are included for example financial services
providers. Therefore, it is necessary for organisation to have strong recommendations as
per the clients’ interests. Start-ups have to maintain its independence for referring best
interests of the clients in an adequate manner.
Section : 2 You and your business
2

 Chapter 7 Management of your business – This chapter is related with proper
management as it focusses on supervision of firms and in house practices as well. The
outcomes of such chapter can be described about start-ups that they must have clear and
appropriate governance structure as well as reporting lines. Small firms have to focus on
identifying, monitoring and managing risks or uncertainties with effective way so that
systems can be maintained (Gould, and Moralejo, 2017). The most important thing in this
is that deciding what system must be implemented for meeting the desired outcomes.
 Chapter 8 Publicity – This chapter is defined regarding different types of services which
are to be publicised. It is necessary for start-ups that do not mislead or misuse of publicity
for promoting their products and services. they have to provide adequate information
regarding their products and must be ensure that clients must make informed as per
different choices. Therefore, start-ups can specify information of products or services by
undertaking letterhead, emails and websites that must contained with an effective
manner.
 Chapter 9 Fee sharing and referrals – This chapter described about protection of
clients by considering their interests in both relations as referrals and fee sharing as well.
In this, start-ups required to provide proper information’s to protect clients and their
interests and must be ensured that they can make better decision through getting proper
information’s (Gupta, and Poulter, 2010). On the other side, start-ups have to consider
written form for agreement while entering into financial arrangements with an introducer
as well.
Section : 3 You and your regulator
 Chapter 10 You and Your regulators – This chapter is focusing on relationship with
other authorise person they can be from inside or outside of the enterprise. Because they
all assist start-ups in their easy working as well also in building image in market easily.
Section 4 You and others
 Chapter 11 Relations with third parties – Organisation must have to maintain
relationship with third parties such as suppliers, manufacturer and so on. So that no other
can take unfair advantage of they deal with.
3

 Chapter 12 Separate business – Aim of this part is that business have their separate
identity in relation to owner as well services offering by them are also not related to
them.
Section 5 Applications, waivers and interpretation
 Chapter 13 Application and waivers provisions – This section is outlining applications
and several provisions which must be taken by organisation while rejections (Gupta, and
Arshad, 2010). For illustration, it is important to for business to take several actions at the
time of rejections so that they can come with several new thing and sustain in business
environment.
 Chapter 14 Glossary – It involves overall conclusion of code of conduct and prepare
handbook which assist enterprise while taking several steps in future.
 Chapter 15 Transitional provisions – last includes overall steps which is important for
sustaining in business world.
Question 2
a) Define the main elements of the crime, summarising how these activities can be detrimental to
both regulated firms and wider society
Crime are not certain and these gives wide impact on working of organisation along with
society also. Below mention is description of all these :-
False Accounting – It is a fraudulent activity which mainly occur when employees or business
intentionally records incorrect financial information. As well there are some other reasons also
such as modification, defaces and destroy records (Poulter, 2010). Moreover, overdraw the
business' assets or understates its liabilities. In simple terms it can be said that, false accounting
is crime of dishonesty by changing figures, records and so on. Writing wrong information in
financial accounts of enterprise, deceiving people in manner to obtain money by cheating people.
Detrimental of false accounting on regulated firm :-
 Financial Loss – Its obvious that false accounting gives financial loss because this
involves management of overall organisations assets. If there is miss appropriate
accounting then it will result in financial loss.
4

 Increase audit Cost – If organisation is facing again and again false accounting then
there is requirement of audit so that reason of fraud can come out. Such activities result in
enhancing audit cost of the enterprise.
Detrimental of false accounting on society :- In society there are several factors which
can suffer through false accounting are suppliers because their margin get affected, loss in source
of supply to customers as well also face inflation (Peters, and O'Sullivan, 2010). Most important
is government which suffer economic loss.
Corruption – It is abuse of entrusted power for personal or private gain. Corruption is wide term
in itself and get divided in various categories which is Based on the division in that it occurs,
amount of money loss and several other damages also.
Detrimental of corruption on firm – Corruption mainly decrease credibility of business
as well profits when professionals misuse their positions for personal gains. It can take several
forms such as bribery, graft and extortion. As well when trust of public put at risk by corruption
it directly give impact on business climate and diminish it.
Detrimental of corruption on society – It gives their several effects on society which
results in costing hard earned money of people, freedom, health and lives also in some situations.
The grimness of corruption is often outlined by how widespread its effects are likely to be.
Tax Evasion – It is an criminal activity in which individual use several means to avoid tax
paying. Tax evasion is act is plentiful because in this individual misrepresent their own or
business income, assets etc. while while showing internal revenue services for decreasing tax
amount.
Detrimental of tax evasion on firm – Tax evasion give negative impact on the image of
business because if income tax department identify misrepresentation of company in that case
firm have to pay penalty (Giralt, 2010). Such penalization is financial loss for the business
because it paid in monetary form.
Detrimental of tax evasion on society – If population of particular nation is doing such
tax evasion activities then it will directly give impact on future economic growth. Generally tax
evasion gives wide impact on developing countries because large amount of tax revenue is
loosing by the society.
5

b) Describe what regulated firms can do to minimise the possibility of such a crime occurring
and why it is believed that such an approach will be effective
Their are several crimes which can take place in organisation such as false accounting,
corruption and tax evasion. For minimising their negative impact or to stop such activities
enterprise can take several major description of these is given below :-
False Accounting - As per the case of TESCO in 2014 three former executives charged
fraud by abuse of position as well with false accounting by SFO (serious fraud officer) for
£263m-plus accounting scandal at the TESCO which is an British supermarket (FORMER
TESCO DIRECTORS FACE FRAUD CHARGES FOR ACCOUNTING SCANDAL, 2018).
Respective organisation can take several measures to minimise such activities and also for
stopping these such as they can hire external audit officer for continuous checking financial
accounts.
Tax evasion – According to the case of Blackpool newsagent, Maureen Carpenter was
jailed for 18 months in the case of VAT (value added tax) because she hide her earning. She
show her income up to 5 pm but store stay open till 11 pm daily in this situation court told that
she did this for hiding her total sales and for avoid to pay some of the VAT she owned (Tax
cheat jailed for £100k VAT scam at Blackpool newsagent, 2018). company can minimise tax
evasion through applying tax compliance in proper manner as well by following all the rules and
regulation related to tax given by government.
Corruption – As per the case of lord Chancellor in 1725, the Earl of Macclesfield was
once again charged for corruption. This time falsification is about to selling jobs and he was
found guilty as well fined £30,000 which is one of the stiffest penalties meted out in such type of
cases (The sale of ‘jobs’, 2018). For minimising corruption their should be proper or direct
contact between employer and employee. Most important tool is education related to corruption
this can assist in reducing.
6

CONCLUSION
From the above mention assignment it has been concluded that business international
play their important role in business environment for assisting companies in their several
operations. BI (business international) is not particular sector companies but they work for
overall. Apart from this crime rate are increasing in the society such as false accounting,
corruption and tax evasion as well their activities detrimental to both regulatory firms and
society. Moreover, firms can minimize their impact through several measures.
7

REFERENCES
Books and Journals
Bulgurcu, B., Cavusoglu, H. and Benbasat, I., 2010. Information security policy compliance: an
empirical study of rationality-based beliefs and information security awareness. MIS
quarterly. 34(3). pp.523-548.
ERAS, C.G., 2015. The Impact of Enhanced Recovery Protocol Compliance on Elective
Colorectal Cancer Resection: Results From an International Registry. Annals of surgery.
261(6). p.1153.
Erasmus, V., Daha, T.J., Brug, H., et. al., ., 2010. Systematic review of studies on compliance
with hand hygiene guidelines in hospital care. Infection Control & Hospital
Epidemiology. 31(3) pp.283-294.
Erasmus, V., Daha, T.J., Brug, H., et. al., 2010. Systematic review of studies on compliance with
hand hygiene guidelines in hospital care. Infection Control & Hospital
Epidemiology.31(3). pp.283-294.
Gould, D.J., Moralejo, D., Drey, N., et. al., 2017. Interventions to improve hand hygiene
compliance in patient care. Cochrane database of systematic reviews. (9).
Gupta, A.K., Arshad, S. and Poulter, N.R., 2010. Compliance, safety, and effectiveness of fixed-
dose combinations of antihypertensive agents: a meta-analysis. Hypertension. 55(2).
pp.399-407.
Gupta, A.K., Arshad, S. and Poulter, N.R., 2010. Compliance, safety, and effectiveness of fixed-
dose combinations of antihypertensive agents: a meta-analysis. Hypertension. 55(2).
pp.399-407.
Peters, L.J., O'Sullivan, B., Giralt, J., et. al., 2010. Critical impact of radiotherapy protocol
compliance and quality in the treatment of advanced head and neck cancer: results from
TROG 02.02.Journal of clinical oncology, 28(18). pp.2996-3001.
Tucker, J.M., Welk, G.J. and Beyler, N.K., 2011. Physical activity in US adults: compliance with
the physical activity guidelines for Americans. American journal of preventive
medicine. 40(4). pp.454-461.
Online
FORMER TESCO DIRECTORS FACE FRAUD CHARGES FOR ACCOUNTING SCANDAL,
2018. [Online]. Available
through<https://www.managers.org.uk/insights/news/2016/september/former-tesco-directors-
face-fraud-charges-for-accounting-scandal>
Tax cheat jailed for £100k VAT scam at Blackpool newsagent, 2018. [Online]. Available
through<https://www.blackpoolgazette.co.uk/news/tax-cheat-jailed-for-100k-vat-scam-at-
blackpool-newsagent-1-9015036>
The sale of ‘jobs’, 2018. [Online]. Available
through<https://www.historyextra.com/period/stuart/bribes-gifts-and-scandal-7-stories-of-
corruption-that-shocked-britain/>
8

9