Recent financial fraud legislation such as the Dodd-Frank Act and the Sarbanes-Oxley Act (U.S. House of Representatives, Dodd-Frank Wall Street Reform and heavily on whistleblowers for enforcement, and offers protection and incentives for whistleblowers. However, little is known about many aspects of the whistleblowing decision, especially the effects of contextual and wrongdoing attributes on organizational members' willingness to report fraud. We extend the ethics literature by experimentally investigating how the nature of the wrongdoing and the awareness of those surrounding the whistleblower can influence whistleblowing. As predicted, we find that employees are less likely to report: (1) financial statement fraud than theft; (2) immaterial than material financial statement fraud; (3) when the wrongdoer is aware that the potential whistleblower has knowledge of the fraud; and (4) when others in addition to the wrongdoer are not aware of the fraud. Our findings extend whistleblowing research in several ways. For instance, prior research provides little evidence concerning the effects of fraud type, wrongdoer awareness, and others' awareness on whistleblowing intentions. We also provide evidence that whistleblowing settings represent an exception to the well-accepted theory of diffusion of responsibility. Our participants are professionals who represent the likely pool of potential whistleblowers in organizations.

We investigate the effects of auditor-wrongdoer reputations for performance and likeability on fellow auditors' intentions to take action in response to a questionable audit act. We also use this context to explore auditor selection of reporting outlets, when they do choose to take action. In an experiment with 181 auditors, main effects suggest that likeability reputation is a significant determinant of intention to take action, while performance reputation is marginally significant. As expected, interaction results indicate that auditors have the greatest intention to take action against less likeable, poor performers. Contrary to expectations, intention to take action against a more likeable, good performer is no lower than the mixed conditions. Thus, the influence of the two dimensions of reputation is complex. Additionally, we find auditors are more likely to whistle-blow internally than externally, and through non-anonymous outlets than anonymous outlets. Our contributions include exploring the impact of reputation on the actions of third parties, and advancing prior literature by considering the influence of wrongdoer attributes on reporting decisions and auditors' reporting channel preferences. Data Availability: Data are available from the first author upon request.

Anecdotal evidence from practice suggests clients can influence auditor judgment using ingratiation, a strategic influence tactic through which the ingratiator attempts to induce positive affect to facilitate persuasion. I provide initial academic evidence concerning the effect of ingratiation on auditor judgment. I find that when the client ingratiates, auditors are more likely to comply with the requests of clients with low incentive to influence the auditor than those with high incentive. Thus, ingratiation appears to magnify the effect of client incentive on auditor judgment. I find auditors experience stronger positive affect toward both ingratiating clients and clients with low incentive relative to non-ingratiating clients and clients with high incentive. Further, auditors are more likely to comply with client requests as positive affect toward the client increases. The results suggest clients can influence auditor judgment through ingratiation under certain circumstances, and clients can strategically induce positive affect to influence auditor judgment.

SUMMARY A primary concern facing the PCAOB's requirement of disclosing critical audit matters (CAMs) is increased auditor litigation risk. Evidence with Key Audit Matters from the U.K. indicates auditors may subsequently remove a CAM or continue to report the same CAM for several years. Therefore, we investigate the effects of CAM removal and duration on jurors' assessments of auditor negligence when there is a subsequent material misstatement due to fraud in the account related to the CAM. Using the Culpable Control Model, we predict jurors will assess higher auditor negligence when a CAM is removed than when a CAM is reported and when a CAM is reported for multiple years than for one year. Results from two experiments support our expectations, although results vary depending on complexity of the misstated account. Overall, our findings highlight a quandary for audit firms, where subsequent removal of a CAM increases auditor liability.

SUMMARY In recent years, professional skepticism (PS) has drawn extensive attention from both regulators and academics. While prior research theorizes that both stable personality traits and temporary states influence PS (e.g., Hurtt 2010; Nelson 2009), this literature tends to focus on either trait PS or contextual factors that influence judgments and behavior without disentangling the trait and state components of PS. We propose that state PS is a distinct construct from trait PS and provide the first measure of state PS. We validate our process for measuring state PS using rigorous analyses, demonstrating convergent and divergent validity with data collected from both professional and student samples. Furthermore, we replicate the Hurtt (2010) trait PS scale, which forms the basis for our state PS measure. Future researchers can employ our measure or, alternatively, replicate our process for measuring state PS in various experimental contexts. Data Availability: Contact the corresponding author.