Financial Crime Soars in Emerging Markets: A Study on Iraq

Background

A new study conducted by Farqad Sallal, Mohammad Ali Bagherpour Velashani, and Mohammad Javad Saei has shed light on the motivations behind financial crime in two emerging markets, including Iraq. The research reveals that management’s motivations to commit fraud in financial statements are a major concern for auditors and regulators.

Key Findings

• Desire for Personal Gain: The main drivers of financial crime in these markets are the desire for personal gain, pressure from external factors, and a lack of effective regulation.
• Cultural and Economic Contexts: The cultural and economic contexts of these countries play a significant role in shaping the motivations behind financial crime.

Implications

The findings of this study have important implications for regulators and authorities in Iraq and other emerging markets. By understanding the motivations behind financial crime, they can establish more effective rules and regulations to prevent it from occurring in the first place.

Recommendations

• Stronger Regulatory Frameworks: The research highlights the need for stronger regulatory frameworks and greater transparency in financial reporting.
• Auditor Awareness: Auditors should be aware of the motivations behind management’s actions and take steps to verify the accuracy of financial statements.

Context: Iraq’s Financial System

In Iraq, where the economy has been heavily impacted by conflict and sanctions, the need for effective regulation and transparency is particularly pressing. The country’s financial system is still recovering from years of instability, and financial crime remains a major concern.

Conclusion

The study’s findings provide valuable insights into the motivations behind financial crime in emerging markets like Iraq. By understanding these motivations, policymakers and regulators can develop more effective strategies to prevent it and promote economic growth and stability.