Search

This article describes how in regulatory supervision some form of collaboration is necessary between regulator and company in the way evidence about compliance is collected and evaluated. How to arrange such collaboration? In this article, we investigate specific ideas about continuous control monitoring and apply them to regulatory supervision. By means of a design science approach, we propose a particular governance mechanism for continuous monitoring of compliance. We derive objectives based on the literature about regulatory supervision and about auditing. By means of a case study of a new customs supervision mechanism for container terminals in a large port, we identify legal, economic and technical feasibility conditions. In particular, we discuss the role of an intermediary. The case shows that continuous control monitoring is legally and technically feasible in the customs domain, and that a suitable party can be found to play the role of intermediary. However, a good business case for parties to invest in such a system needs to be developed.

Much compliance effort concerns adherence to contracts. Parties to a contract need to make sure that the other parties will deliver. To this end they may require additional controls in the business process to monitor delivery and induce contractual penalties when needed. Controls have costs. In this paper the authors argue that introducing fully automated controls will help to reduce control costs, because (i) they can prevent misstatements (compliance by design) or (ii) they increase the quality of evidence and thereby reduce the audit risk for the external auditor and corresponding audit fees. The line of reasoning is illustrated by a case study of the implementation process of automated controls on the procurement process for public transport services for the elderly and disabled. This is a complex and heavily regulated domain. The case study indicates that control automation makes monitoring compliance to contracts in such complex domains feasible and that using control automation can in fact reduce the costs of control.

Designing security measures often involves trade-offs between various types of objectives. Multiple stakeholders may have conflicting demands and may have different ideas on how to resolve the resulting design conflicts. This paper reports on an application of value-sensitive design. Based on argumentation theory and social values, the paper develops a structured approach for discussing design conflicts, called value-based argumentation. The application domain examined in the paper is concerned with physical safety and security issues that arise in cross-border shipments. We first identify the kinds of dialogues that take place in this domain, in particular, audit dialogues to determine whether security measures comply with regulations. Based on argumentation theory we develop a formal language and a diagramming approach intended to facilitate parties in identifying, discussing and reaching agreement about security risks and corresponding mitigation measures. Trade-offs can be dealt with by making underlying values explicit. Using a stylized example, the approach was successfully taught to practitioners working with EU customs regulations. Practitioners generally found the approach helpful, in particular to bring out implicit underlying motivations. We conclude by discussing how our approach can be generalized to other kinds of dialogues involving design conflicts.

Companies are required by law to report all kinds of information to various public agencies. Since most public agencies are autonomous and define their information demands independent of each other, companies have to report information to various agencies in different ways. Accordingly, governments are initiating programs that aim to transform business-to government information exchange to reduce the administrative burden for companies and improve the accountability at the same time. Yet little research is available on the type of transformations needed and the role of the infrastructure. Drawing on a case study, this paper investigates the interplay between technical infrastructure and transformation. In this case study an information brokerage infrastructure based on the Extensible Business Reporting Language (XBRL) was developed providing a one stop shop for companies and public agencies. The case study shows that the infrastructure should be flexible enough to accommodate changes over time but stable enough to attract a large user-base. The increase in efficiency and effectiveness of information exchange processes requires extensive transformation from both public and private parties.

Compliance is often achieved 'by design' through a coherent system of controls consisting of information systems and procedures. This system-based control requires a new approach to auditing in which companies must demonstrate to the regulator that they are 'in control'. They must determine the relevance of a regulation for their business, justify which set of control measures they have taken to comply with it, and demonstrate that the control measures are operationally effective. In this paper we show how value-based argumentation theory can be applied to the compliance domain. Corporate values motivate the selection of control measures (actions) which aim to fulfil control objectives, i.e. adopted norms (goals). In particular, we show how to formalize the audit dialogue in which companies justify their compliance decisions to regulators using value-based argunlentation. The approach is illustrated by a case study of the safety and security measures adopted in the context of EU customs regulation.

The central research question of this paper is how notions developed in interactive computing such as abstract behavior types, the coordination language Reo, and Boolean circuits with registers, can be used to extend logical input/output nets, or lions for short. Lions are based on input/output logic, a deontic logic which is not used as a (non-classical) inference engine deriving output from input, but as a secretarial assistant for logically assisted transformations from input to output. We consider two extensions of input/output logics and lions. First, we consider input/output logics defined on infinite sequences (or streams) of inputs and outputs. Secondly, we consider lions with AND and register gates, formalizing the behavior of channels and connectors. We discuss also the role of interactive computing in normative multi-agent systems motivating the development of lions.