An examination of anonymous and non-anonymous fraud reporting channels

Abstract Interest in the role of the reporting channel on whistleblowing has been fostered by the passage of the Sarbanes-Oxley Act of 2002, which requires that audit committees of public companies establish and oversee an anonymous reporting channel for questionable accounting or auditing matters. But only limited information exists as to the likely effectiveness of such a channel as compared to a non-anonymous channel. The purpose of our paper is to report the results of an experimental study examining participants' intentions to report fraud using anonymous and non-anonymous reporting channels given information about the outcomes from a previous non-anonymous whistleblowing incident. The experiment manipulates the outcomes to both the previous whistleblower and to the transgressor. We find that while negative outcomes from the perspective of a previous non-anonymous whistleblower (either the occurrence of retaliation against that person or no negative repercussions to the previous transgressor) lowered participants' non-anonymous reporting intentions, these negative outcomes did not decrease participants' anonymous reporting intentions. But when, no such negative outcomes from the previous whistleblower's perspective have occurred, our participants' reporting intentions did not differ between the anonymous and non-anonymous channels.

[1]  James R. Van Scotter,et al.  Antecedents and Outcomes of Retaliation Against Whistleblowers: Gender Differences and Power Relationships , 2008, Organ. Sci..

[2]  Elaine G. Mauldin,et al.  Auditor rotation and the appearance of independence: Evidence from non-professional investors , 2008 .

[3]  Randy K. Chiu,et al.  Ethical Judgment and Whistleblowing Intention: Examining the Moderating Role of Locus of Control , 2003 .

[4]  Marcia P. Miceli,et al.  Whistle-Blowing in Organizations , 2008 .

[5]  Chockalingam Viswesvaran,et al.  Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation , 2005 .

[6]  Stacey M. Whitecotton,et al.  An Examination of Auditors' Reporting Intentions When Another Auditor Is Offered Client Employment , 2001 .

[7]  Marcia P. Miceli,et al.  Characteristics of organizational climate and perceived wrongdoing associated with whistle-blowing decisions. , 1985 .

[8]  Joseph J. Schultz,et al.  Intentions to Report Questionable Acts: An Examination of the Influence of Anonymous Reporting Channel, Internal Audit Quality, and Setting , 2007 .

[9]  M. Singer,et al.  Consideration of Moral Intensity in Ethicality Judgements: Its Relationship with Whistle-blowing and Need-for-Cognition , 1998 .

[10]  Mark Keil,et al.  Keeping Mum as the Project Goes Under: Toward an Explanatory Model , 2001, J. Manag. Inf. Syst..

[11]  Marcia P. Miceli,et al.  Does Type of Wrongdoing Affect the Whistle-Blowing Process? , 2004, Business Ethics Quarterly.

[12]  Joseph J. Schultz,et al.  An Investigation Of The Reporting Of Questionable Acts In An International Setting , 1993 .

[13]  Janet A. Samuels,et al.  An examination of the effects of procedural safeguards on intentions to anonymously report fraud , 2009 .

[14]  Marcia P. Miceli,et al.  Can Laws Protect Whistle-Blowers? , 1999 .

[15]  Gerald L. Salamon,et al.  An Information Economic Perspective on Experimental Research in Accounting , 2006 .

[16]  L. Treviño,et al.  Organizational Justice and Ethics Program “Follow-Through”: Influences on Employees’ Harmful and Helpful Behavior , 2001, Business Ethics Quarterly.

[17]  Robert E. Verrecchia.  Why all the hoopla about Enron , 2003 .

[18]  M. Miceli,et al.  A Word to the Wise: How Managers and Policy-Makers can Encourage Employees to Report Wrongdoing , 2009 .

[19]  Joseph C. Ugrin,et al.  Exploring Sarbanes–Oxley’s effect on attitudes, perceptions of norms, and intentions to commit financial statement fraud from a general deterrence perspective , 2010 .

[20]  Marcia P. Miceli,et al.  Blowing the whistle : the organizational and legal implications for companies and employees , 1993 .

[21]  I. Dyck,et al.  Who Blows the Whistle on Corporate Fraud? , 2007 .

[22]  Michael T. Rehg.  An Examination of the Retaliation Process Against Whistleblowers: A Study of Federal Government Employees. , 1998 .

[23]  Steven E. Kaplan,et al.  Wrongdoing by Consultants: An Examination of Employees’ Reporting Intentions , 2005 .

[24]  Mark J. Martinko,et al.  The Decision to Blow the Whistle: A Social Information Processing Framework , 2003 .

[25]  D. A. Kenny,et al.  The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. , 1986, Journal of personality and social psychology.