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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.

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.

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In public accounting, the performance evaluation process involves assessing and communicating feedback to employees. In the financial statement audit setting, in particular, supervisors provide feedback to subordinates frequently throughout a fiscal year. Prior research finds that performance evaluations are based largely on the subordinate's work outcomes, such as task completion and budgeted hours, and also are related to employee satisfaction/dissatisfaction and an increase/decrease in overall job performance. Utilizing psychology theories, we investigate whether a manager's feedback tone (supportive/non‐supportive) and evaluation focus (tasks/goals) influence auditors’ self‐esteem as well as their corresponding professional skepticism, including their search for evidence. Based on an experiment with 118 experienced auditors, we find that supportive and goal‐focused performance evaluations, independently, lead to higher self‐esteem. This elevated self‐esteem translates into desirable auditor attributes, such as greater professional skepticism and an increase in search for evidence and audit quality. Our results are valuable to practice, as firms attempt to train and retain their employees through the performance evaluation process.