Advertisement

Disentangling the Expectation Gap for Compliance Officers

  • Maria Krambia-KapardisEmail author
  • Salomi Dimitriou
  • Ioanna Stylianou
Chapter

Abstract

Despite the current emphasis on compliance, the status of compliance personnel is still relatively unexamined by scholars. The invisibility of compliance personnel attributable to a lack of relative power within the firm as well as the conflicting notions that exist as far as their duties, responsibilities, functions, as well as their title and qualifications, raises the crucial question whether the compliance profession is facing an expectation gap. In the first part of the chapter, the compliance program and the impact of non-compliance are contextualized within the ethical culture and internal coherence. In the second part of the chapter, the authors utilizing Porter’s (1988, 1993) theoretical model of the expectation gap, developed in reference to the accounting profession, report findings from an empirical survey of the compliance officers in Cyprus.

Keywords

Ethical culture Expectation gap Compliance officers 

Notes

Acknowledgements

The authors would like to thank Eleana Fitidou for assisting with the literature search.

References

  1. Aznar, E., and Vaccaro, A. (2015). Make Way for the Chief Integrity Officer. IESE Insight Fourth Quarter, 27, 23–30.CrossRefGoogle Scholar
  2. Baldock, G. (2016). The Perception of Corruption Across Europe, Middle East and Africa. Journal of Financial Crime, 23(1), 119–131.CrossRefGoogle Scholar
  3. Belton, P. (2009). The Evolving Role of Compliance Officers During These Difficult Economic Times. Journal of Health Care Compliance, 11(4), 11–16.Google Scholar
  4. Berenbeim, R. E. (2010). Utilizing HR and Ethics and Compliance Collaboration to Promote an Ethical Culture. Employment Relations Today, 37(1), 17–26.CrossRefGoogle Scholar
  5. Bravo, D. Y., Umaña-Taylor, A. J., Toomey, R. B., Updegraff, K. A., and Jahromi, L. B. (2016). Risky Behaviors and Educational Attainment Among Young Mexican-Origin Mothers: The Role of Acculturative Stress and the Educational Aspiration–Expectation Gap. International Journal of Intercultural Relations, 52, 13–26.  https://doi.org/10.1016/j.ijintrel.2016.02.003. Accessed 1 November 2018.
  6. Brooks, J. (2010). Directors and Officers of U.S. Multinationals: Minimizing Risk in an Era of Enhanced Responsibility. Practical Lawyer, 56(6), 49–57.Google Scholar
  7. Brown, J. (2010). Compliance Effectiveness: How Do We Get There? Journal of Health Care Compliance, 12(4), 37–40.Google Scholar
  8. De Dios, M. A. (2016). The Sixth Pillar of Anti-money Laundering Compliance: Balancing Effective Enforcement with Financial Privacy. Brooklyn Journal of Corporate, Financial & Commercial Law, 10. http://brooklynworks.brooklaw.edu/bjcfcl/vol10/iss2/7. Accessed 20 October 2018.
  9. DeMott, D. A. (2013). The Crucial but (Potentially) Precarious Position of the Chief Compliance Officer. Brooklyn Journal of Corporate, Financial & Commercial Law, 8, 56–79.Google Scholar
  10. Dols, T., and Silvius, A. J. G. (2010). Exploring the Influence of National Cultures on Non-compliance Behavior. Communications of the IIMA, 10(3), 11–32.Google Scholar
  11. Duszak, R. (2008). Building a Better Compliance Officer. Journal of the American College of Radiology, 5(11), 1106–1108.CrossRefGoogle Scholar
  12. Edwards, J., and Wolfe, S. (2005). Compliance: A Review. Journal of Financial Regulation and Compliance, 13(1), 48–59.CrossRefGoogle Scholar
  13. Forman, S. (2013). Compliance Program Leveraging of Audit Resources. Journal of Health Care Compliance, 15(4), 55–58.Google Scholar
  14. Füredi-Fülöp, J. (2015). An Empirical Study of Audit Expectation Gap in Hungary. Theory, Methodology, Practice, 11(1), 37–46.CrossRefGoogle Scholar
  15. Gherai, Dana Simona. (2011). Audit Expectation Gap in the Public Sector in Romania. Annals of the University of Oradea: Economic Science, 20(2), 510–516.Google Scholar
  16. Gibeaut, J. (2002). Show Them the Money: The Anti-terrorism Laws Target Money Laundering, Forcing Banks to Be More Vigilant and Compliance Officers to Take on More Tasks. ABA Journal, 88(1), 46–51. http://www.jstor.org/stable/27841938. Accessed 2 November 2018.
  17. Gnazzo, P. J. (2011). The Chief Ethics and Compliance Officer: A Test of Endurance. Business and Society Review, 116(4), 533–553.CrossRefGoogle Scholar
  18. Grant-Hart, K. (2016). How to Be a Wildly Effective Compliance Officer. London: Brentham House Publishing.Google Scholar
  19. Greenberg, M. D. (2009). Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds: What the Policy Community Should Know. Santa Monica, CA: RAND Corporation. http://www.rand.org/pubs/conf_proceedings/CF258.html. Accessed 2 November 2018.
  20. Harvey, J. (2004). Compliance and Reporting Issues Arising for Financial Institutions from Money Laundering Regulations: A Preliminary Cost Benefit Study. Journal of Money Laundering Control, 7(4), 333–346.CrossRefGoogle Scholar
  21. Idris, A., and Ojemen, C. (2012). Existence and Nature of Audit Expectation Gap: Nigerian Perspective. Asian Economic and Financial Review, 2(8), 1051.Google Scholar
  22. International Compliance Association (ICA). (2016). ICA International Diploma in Governance, Risk and Compliance. International Compliance Training. https://www.int-comp.org/. Accessed 11 November 2018.
  23. Islam, T., Ahmed, I., Khalifah, Z., Sadiq, M., and Faheem, M. A. (2015). Graduates’ Expectation Gap: The Role of Employers and Higher Learning Institutes. Journal of Applied Research in Higher Education, 7(2), 372–384. https://doi.org/10.1108/jarhe-05-2014-0056. Accessed 10 October 2018.
  24. Jones, D. S., and Bird, L. C. P. N., Jr. (2008). Are Compliance Officers Leading the Way When It Comes to Quality? Journal of Health Care Compliance, 10(5), 43–48.Google Scholar
  25. Kavanagh, S. (2008). Paper Discusses the Role of a Chief Ethics and Compliance Officer. Journal of Health Care Compliance, 10(1), 25–28.Google Scholar
  26. Krambia-Kapardis, M. (2001). Enhancing the Auditor’s Fraud Detection Ability. Frankfurt: Peterlang.Google Scholar
  27. Lafferty, L. T. (2010). The Habits of Highly Effective Compliance Officers from Effectiveness to Greatness in Your Program Activities. Journal of Health Care Compliance, 12(6), 11–18.Google Scholar
  28. Liggio, C. D. (1974). The Expectation Gap: The Accountant’s Legal Waterloo. Journal of Contemporary Business, 3(3), 27–44.Google Scholar
  29. Madichie, N. O. (2007). Nigerian Restaurants in London: Bridging the Experiential Perception/Expectation Gap. International Journal of Business and Globalisation, 1(2), 258.  https://doi.org/10.1504/IJBG.2007.014434.
  30. Martin, S. L. (2015). Compliance Officers: More Jobs, More Responsibility, More Liability. Notre Dame Journal of Law, Ethics & Public Policy, 29(1), 169–198.Google Scholar
  31. McGreal P. E. (2017). HorseShoes and Hand Grenades: Protecting Compliance Officers from the At-Will Employment Doctrine. University of Toledo Law Review, 48, 485–492.Google Scholar
  32. Méndez, F. (2012). Can Corruption Foster Regulatory Compliance? Public Choice, 158, 189–207.CrossRefGoogle Scholar
  33. Miller, G. P. (2017). Compliance: Past, Present and Future. University of Toledo Law Review, 48, 437–451.Google Scholar
  34. Mills, A. (2008). Essential Strategies for Financial Service Compliance. Chichester, New York: Wiley. Google Scholar
  35. Morf, D. A., Schumacher, M. G., and Vitell, S. F. (1999). A Survey of Ethics Officers in Large Organizations. Journal of Business Ethics, 20, 265–271.CrossRefGoogle Scholar
  36. Nadana, A., and Kim, W. (2014). The Expectation‐Performance Gap in Generic Skills in Accounting Graduates. Asian Review of Accounting, 22(1), 56–72.CrossRefGoogle Scholar
  37. Parker, C., and Gilad, S. (2011). Internal Corporate Compliance Management System: Structure, Culture and Agency. In C. Parker and V. L. Nielsen (Eds.), Explaining Compliance: Business Responses to Regulation (pp. 170–197). Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  38. Parker, C., and Nielsen, V. L. (2011). Explaining Compliance: Business Responses to Regulation. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  39. Perezts, M., and Picard, S. (2015). Compliance or Comfort Zone? The Work of Embedded Ethics in Performing Regulation. Journal of Business Ethics, 131, 833–852.CrossRefGoogle Scholar
  40. Perrone, C. M. (2014). The Language of Collaboration. Journal of Health Care Compliance, 16(1), 22, 63–66.Google Scholar
  41. Perry, J. C., Przybysz, J., and Al-Sheikh, M. (2009). Reconsidering the Aspiration–Expectation Gap and Assumed Gender Differences Among Urban Youth. Journal of Vocational Behavior, 74(3), 349–354.Google Scholar
  42. Pok, W. C., Omar, N., and Sathye, M. (2014). An Evaluation of the Effectiveness of Anti-money Laundering and Anti-terrorism Financing Legislation: Perceptions of Bank Compliance Officers in Malaysia. Australian Accounting Review, 24(4), 394–401.CrossRefGoogle Scholar
  43. Porter, B. A. (1988). Towards a Theory of the Role of the External Auditor in Society. Research Monograph No. 1, Massey University.Google Scholar
  44. Porter, B. A. (1993). An Empirical Study of the Audit Expectation–Performance Gap. Accounting and Business Research, 24(93), 49–68.CrossRefGoogle Scholar
  45. Porter, B. A., and Gowthorpe, C. (2004). Audit Expectation–Performance Gap in The United Kingdom in 1999 and Comparison with the Gap in New Zealand in 1989 and in 1999. Edinburgh: The Institute of Chartered Accountants of Scotland. https://www.icas.com/__data/assets/pdf_file/0019/7705/65-Audit-Expectation-Performance-GAP-UK-and-New-Zealand-Comparison-ICAS.pdf. Accessed 2 November 2018.
  46. Power, M. (1997). The Audit Society: Rituals of Verification. New York: Oxford University Press.Google Scholar
  47. Ruhnke, K., and Schmidt, M. (2014). The Audit Expectation Gap: Existence, Causes, and the Impact of Changes. Accounting and Business Research, 44(5), 572–601.  https://doi.org/10.1080/00014788.2014.929519. Accessed 2 November 2018.
  48. Schminke, M., Caldwell, J., Ambrose, M. L., and McMahon, S. R. (2014). Better Than Ever? Employee Reactions to Ethical Failures in Organizations, and the Ethical Recovery Paradox. Organizational Behavior and Human Decision Processes, 123, 206–219.Google Scholar
  49. Snell, R. (2009). The Tables Are Turned as Roy Snell Offers His Insight on the Current State of Compliance. Journal of Health Care Compliance, 11(2), 33–36.Google Scholar
  50. Snell, R. (2015). A Brief History of Time… in Compliance: Yes, Compliance Can Be Tough, but It Can Also Be Meaningful and Rewarding. Journal of Health Care Compliance, 17(5), 3–5.Google Scholar
  51. Treviño, L. K., den Nieuwenboer, N. A., Kreiner, G. E., and Bishop, D. G. (2014). Legitimating the Legitimate: A Grounded Theory Study of Legitimacy Work Among Ethics and Compliance Officers. Organizational Behavior and Human Decision Processes, 123, 186–205.CrossRefGoogle Scholar
  52. Treviño, L. K., Weaver, G. R., Gibson, D. G., and Toffler, B. L. (1999). Managing Ethics and Legal Compliance: What Works and What Hurts. California Management Review, 41(2), 131–151.CrossRefGoogle Scholar
  53. Tyler, T. R. (2006). Psychological Perspectives on Legitimacy and Legitimation. Annual Review of Psychology, 57, 375–400.CrossRefGoogle Scholar
  54. United Office on Drugs and Crime (UNODC). (2018). Money Laundering and Globalisation. https://www.unodc.org/unodc/en/money-laundering/globalization.html. Accessed 15 September 2018.
  55. Van Duyne, P. C. (1998). Money-Laundering: Pavlov’s Dog and Beyond. The Howard Journal, 37(4), 359–374.CrossRefGoogle Scholar
  56. Verhage, A. (2009). Between the Hammer and the Anvil? The Anti-money Laundering-Complex and Its Interactions with the Compliance Industry. Crime Law Society Change, 52, 9–32.CrossRefGoogle Scholar
  57. Weaver, G. R., and Treviño, L. K. (1999). Compliance and Values Oriented Ethics Programs: Influences on Employees’ Attitudes and Behavior. Business Ethics Quarterly, 9(2), 315–335.CrossRefGoogle Scholar
  58. Weaver, G. R., Treviño, L. K., and Cochran, P. L. (1999). Corporate Ethics Programs as Control Systems: Influences of Executive Commitment and Environmental Factors. Academy of Management Journal, 42(1), 41–57.Google Scholar
  59. Weber, J., and Fortun, D. (2005). Ethics and Compliance Officer Profile: Survey, Comparison and Recommendations. Business and Society Review, 110(2), 97–115.CrossRefGoogle Scholar
  60. Weber, J., and Wasieleski, D. M. (2012). Corporate Ethics and Compliance Programs: A Report, Analysis and Critique. Journal of Business Ethics, 112(4), 609–626.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Maria Krambia-Kapardis
    • 1
    Email author
  • Salomi Dimitriou
    • 1
    • 2
  • Ioanna Stylianou
    • 2
  1. 1.Cyprus University of TechnologyLimassolCyprus
  2. 2.University of Central Lancashire Cyprus (UCLan)PylaCyprus

Personalised recommendations