On compliance of business processes with business contracts

This paper addresses the problem of ensuring compliance of business processes, implemented within and across organisational boundaries, with the constraints stated in related business contracts. In order to deal with the complexity of this problem we propose two solutions that allow for a systematic and increasingly automated support for addressing two specific compliance issues. One solution provides a set of guidelines for progressively transforming contract conditions into business processes that are consistent with contract conditions thus avoiding violation of the rules in contract. Another solution compares rules in business contracts and rules in business processes to check for possible inconsistencies. Both approaches rely on a computer interpretable representation of contract conditions that embodies contract semantics. This semantics is described in terms of a logic based formalism allowing for the description of obligations, prohibitions, permissions and violations conditions in contracts. This semantics was based on an analysis of typical building blocks of many commercial, financial and government contracts. The study proved that our contract formalism provides a good foundation for describing key types of conditions in contracts, and has also given several insights into valuable transformation techniques and formalisms needed to establish better alignment between these two, traditionally separate areas of research and endeavour. The study also revealed a number of new areas of research, some of which we intend to address in near future

Regulatory Compliance-oriented Impediments and Associated Effort Estimation Metrics in Requirements Engineering for Contractual Systems Engineering Projects

Large-scale contractual systems engineering projects often need to comply with a myriad of government regulations and standards as part of contractual fulfillment. A key activity in the requirements engineering (RE) process for such a project is to elicit appropriate requirements from the regulations and standards that apply to the target system. However, there are impediments in achieving compliance due to such factors as: the voluminous contract and its high-level specifications, large number of regulatory documents, and multiple domains of the system. Little empirical research has been conducted on developing a shared understanding of the compliance-oriented complexities involved in such projects, and identifying and developing RE support (such as processes, tools, metrics, and methods) to improve overall performance for compliance projects. Through three studies on an industrial RE project, we investigated a number of issues in RE concerning compliance, leading to the following novel results:(i) a meta-model that captures artefacts-types and their compliance-oriented inter-relationships that exist in RE for contractual systems engineering projects; (ii) discovery of key impediments to requirements-compliance due to: (a) contractual complexities (e.g., regulatory requirements specified non-contiguously with non-regulatory requirements in the contract at the ratio of 1:19), (b) complexities in regulatory documents (e.g., over 300 regulatory documents being relevant to the subject system), and (c) large and complex system (e.g., 40% of the contractual regulatory requirements are cross-cutting); (iii) a method for deriving base metrics for estimating the effort needed to do compliance work during RE and demonstrate how a set of derived metrics can be used to create an effort estimation model for such work; (iv) a framework for structuring diverse regulatory documents and requirements for global product developments. These results lay a foundation in RE research on compliance issues with anticipation for its impact in real-world projects and in RE research

Formalising responsibility modelling for automatic analysis

Modelling the structure of social-technical systems as a basis for informing software system design is a difficult compromise. Formal methods struggle to capture the scale and complexity of the heterogeneous organisations that use technical systems. Conversely, informal approaches lack the rigour needed to inform the software design and construction process or enable automated analysis. We revisit the concept of responsibility modelling, which models social technical systems as a collection of actors who discharge their responsibilities, whilst using and producing resources in the process. Responsibility modelling is formalised as a structured approach for socio-technical system requirements specification and modelling, with well-defined semantics and support for automated structure and validity analysis. The effectiveness of the approach is demonstrated by two case studies of software engineering methodologies

The valuation tool user guide: monetizing Cradle to Cradle®

This User Guide outlines the object, scope and expected deliverables from the Valuation Tool component of the Cradle to Cradle ® C2C BIZZ project. It describes the compendium of subtools that have been developed comprising: i) overview of funding tools; ii) C2C investment appraisal tool; and iii) C2C value indexing tool. The underpinning methodologies, as well as their inherent strengths and limitations are also described. The C2C BIZZ project as a whole aims specifically to promote and enhance the implementation of C2C methods in business site development within North Western Europe (NWE) (PAD, p.14). It is intended to infuse C2C notions into conventional site development, restructuring and management. The primary focus of the project is on planning, building and managing of business sites with C2C credentials (PAD, p.18) using sites in Lille Metropole (La Lainiere), London (London Sustainable Industries Park) and Luxemburg (Ecoparc Windhof) as experimental fields. C2C BIZZ is not concerned with the internal operations and activities of occupiers or users of the developed site. Accordingly, the scope of the valuation tool is confined to the planning, building and management of C2C sites. The deliverable from this component is a compendium of subtools (see Figure 1 below) that may be used to analyse the financial performance of C2C credentials in business sites to aid the making of a business case for such developments and evaluating the financial incentives for particular C2C site development projects. This entire work is premised on the argument that the wider adoption of C2C principles within the built environment depends on the rate of uptake by the private sector. The private sector, being profit driven, are likely to engage in C2C site development if they are convinced of its capacity to contribute to their business goals which ultimately is a return on their investment. The tool development described in this document attempts to provide a framework for collating an evidence base that can assist in articulating the business case for C2C in business site developments

Peoples’ Views of Taxation in Africa: a Review of Research of Determinants of Tax Compliance

What are the key determinants of taxpayer compliance? And which features of citizen-state relations govern attitudes and behaviour regarding taxation? This paper examines the analytical foundation, methodological approaches and key findings of available empirical literature on taxpayer behaviour in Africa. Understanding how citizens perceive and experience taxation may provide an essential diagnostic of the political realities for tax reform. Attempts to broaden the tax base require insights into how citizens experience and perceive the tax system, whether people perceive they are paying taxes or not, what they eventually pay, their views on tax administration and enforcement, and whether and how their tax behaviour is correlated with how they perceive the state. Attitude and perception surveys of current and potential taxpayers may also help to identify perceived weaknesses of the tax system, and enable tax authoritiesto focus attention efficiently on high-risk categories of taxpayers

Fatwa shopping as modernising Islamic finance law

The thesis examines the evolving role of Islamic financial instruments in the modernisation of Islamic financial practices. Crucial to this process of modernisation is the proper appreciation of the impact and importance of selective Sharia opinions termed fatwa shopping in this thesis. Fatwa shopping involves selecting, reviewing, and combining Islamic juristic rulings in the form of fatwas (the plural of fatwa in English and it is also referred to as fatawa in Arabic). Using this approach, medieval Islamic rules and contracts are utilised on a functional basis and as a means of developing modern functional equivalents. The thesis argues that fatwa shopping continues the classical tradition of doctrinal selections (talfiq) made by Muslim jurists to find an interpretation that best fits the circumstances. The application of this approach finds expression in the views of Muslim scholars and Islamic Financial Institutions (IFIs) and their Sharia Supervisory Boards (SSBs) reviewing and selecting various Islamic juristic rulings from different schools of Islamic jurisprudence to certify modern Islamic financial products and services. This approach recognises that medieval Islamic commercial contracts have significant problems in terms of feasibility and practicality in modern banking transactions. The thesis takes a middle path between legitimacy and practicality by allowing the development of Islamic financial instruments that obey Islamic juristic rulings but also take into account economic and financial considerations. Since financial institutions including IFIs are crucial to economic development and invariably involve risks to the economy, institutions, and consumers, regulation plays an important role in ensuring financial stability and risk management. Thus, it is important to contextualise the position of Islamic finance within the global financial system. Islamic financial institutions cannot be separated from the general regulatory framework and the management of risk. A key justification for the regulation of banking and financial institutions is to mitigate and prevent risks that may jeopardise the industry and the whole economy. This is reflected in both the public interest and economic theories of regulation. The government has a central role in risk regulation to protect the public from adverse consequences of banking and financial transactions through regulations that are primarily concerned with specifics risk in the financial industry. In the case of IFIs, it is not only government that has a central role in the development of financial products and the regulation of risks in Islamic finance. SSBs, as non-governmental bodies, provides substantive determinations as to whether a particular financial activity or instrument is Sharia compliant. Unlike conventional products, the character of Islamic financial products relies on Sharia compliance. One of the main challenges for Sharia compliance is whether fatwas can accommodate modern risk management instruments. Risk management instruments are pivotal to managing and hedging risks. These include various forms of derivatives as well as insurance and limited liability corporations. As modern derivatives and insurance are considered essential to deliver benefits to the financial industry and the economy as a whole, modern Islamic finance should be able to adapt to this economic and risk management environment. Despite disagreements Muslims scholars on whether modern instruments comply with Islamic law, the method of selective Sharia rules or fatwa shopping provides a mechanism for deriving modern fatwas on which to base Sharia compliant equivalents on derivatives, insurance, and limited liability corporations. In order to assess how IFIs actually operate in a financial system, the thesis examines Islamic finance in two jurisdictions: Indonesia and Australia. These two jurisdictions are selected as providing a comparison of a system that makes little or no accommodation for a very small Islamic finance industry (Australia) and Indonesia where fatwas are recognised in the local banking system; the validity of Islamic financial instruments depends not only on satisfying conventional regulatory requirements but also on SSBs certification of Sharia compliance. The legitimacy of local Islamic financial products and services operates through a non-state agency, Sharia Advisory Boards – Indonesian Ulama Council. They set their own juristic rules. The fatwas produced by that body play an important role in harmonizing Sharia opinions in the Indonesian financial system. Local banking acts direct Indonesian regulators to adopt fatwas as a national benchmark. In addition, fatwas of that governing body allow the adoption of various juristic rules from different Islamic schools in defining local fatwas on Islamic finance. In contrast, in Australia there is decentralised Sharia regulation so that local IFIs develop their own Sharia justifications for products and services offered to the markets. Local regulators have no concerns on Sharia compliance aspects of those local IFIs. The thesis concludes that that selective Sharia rules or fatwa shopping has contributed to the modern development of Islamic finance. The method has been successful in harmonizing legitimacy and practicality of Islamic financial transactions with the needs of a modern financial system

Customizing choreography: Deriving conversations from organizational dependencies

Evolving business needs call for customizable choreographed interactions. However, choreography descriptions do not capture the problem-domain knowledge required to perform the customization effectively. Hence, we propose performing the customization to models of organizational requirements motivating the interaction. To facilitate the derivation of the resulting choreography description, we propose an alignment between conversations and organizational dependencies. We employ the domain knowledge and formal semantics of requirements models to find customization alternatives and reason about them. Using the alignment, we derive constraints on conversations systematically from customized requirements models

Crowdfunding and Fintech: business model sharia compliant

Focus on a concrete project, share the results, contain the risk. These are some of the precepts of Islamic finance. But they are also the cornerstones of crowdfunding. This is why this form of financing is cutting out its space. With an extra pillar: no interests. The resources are still limited, but the Muslim crowdfunding ecosystem is diversifying: from the most basic reward based on social lending, with an eye to the Fintech. FinTech refers to technofinance or financial technology, that is to say, the supply of services and financial products provided through the most modern technologies made available to ICT. The services provided by FinTech are essentially those of traditional finance: therefore, from simple transactions to payments, to brokering and risk management, typical and exclusive of this sector are the activities linked to electronic currencies such as for example, the Bitcoin

Aiding compliance governance in service-based business processes

Assessing whether a company's business practices conform to laws and regulations and follow standards and SLAs, i.e., compliance management, is a complex and costly task. Few software tools aiding compliance management exist; yet, they typically do not address the needs of who is actually in charge of assessing and understanding compliance. We advocate the use of a compliance governance dashboard and suitable root cause analysis techniques that are specifically tailored to the needs of compliance experts and auditors. The design and implementation of these instruments are challenging for at least three reasons: (1) it is fundamental to identify the right level of abstraction for the information to be shown; (2) it is not trivial to visualize different analysis perspectives; and (3) it is difficult to manage and analyze the large amount of involved concepts, instruments, and data. This chapter shows how to address these issues, which concepts and models underlie the problem, and, eventually, how IT can effectively support compliance analysis in Service-Oriented Architectures (SOAs). © 2012, IGI Global