Resumen de The Relevance of Internal Control System on Money Laundering in Jordanian Islamic and Commercial Banks

Sari Sulaiman Malahim, Salah Turki Alrawashdeh, Shadi Arshid Muslim Saraireh, Rafat Salameh Salameh, Anas Ahmed Yaseen, Howaida Musa Khalil

• Purpose: This study seeks to determine whether internal control systems are important for preventing money laundering in Islamic and commercial banks in Jordan. It seeks to clarify the procedures and means for evaluating the internal control systems, identify the extent of their application, and determine their impact on reducing money laundering in banks.

    Theoretical framework: Money laundering is a significant criminal activity that has serious economic and social impacts. Despite anti-money laundering legislation and emphasis on internal controls, money laundering remains a pervasive problem in the financial industry. Effective internal controls can help prevent errors, manipulation, and fraud that facilitate money laundering, thereby preventing crime and ensuring market competitiveness.

    Design/methodology/approach: As part of the study, interviews were conducted using a qualitative methodology. It was essential that those selected for interviews work in a controlling position or department in banks. All facets of the internal control framework are covered in the interview questions.

    Findings: Internal control has a positive impact on preventing money laundering in banks, and control activities are critical in preventing money laundering operations. The quality of information obtained and distributed by banks, along with channels for distributing information, are factors in improving a bank's ability to combat money laundering.

    Research, Practical & Social implications: The study has practical and social implications in determining characteristics that affect the efficacy of anti-money laundering actions, which can aid in drastically reducing money laundering.

    Originality/value: The study adds to what is already known about anti-money laundering initiatives and how well they work to stop money laundering in Islamic and Commercial banks. Its investigation of the effects of information and communication on developing effective internal control systems to prevent money laundering gives it originality and value. Additionally, it creates new opportunities for future study into how well internal control procedures work to lessen money laundering in various contexts and nations.