Does Wrongdoer Reputation Matter? Impact of Auditor-Wrongdoer Performance and Likeability Reputations on Fellow Auditors' Intention to Take Action and Choice of Reporting Outlet
Abstract: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 … Show more
“…In neither case is the reporter's identity disclosed to the perpetrator. Prior research (Robertson et al 2011;Curtis and Taylor 2009) has found no significant difference between whistleblowing likelihood under protection versus anonymity. To further this line of research, we present results analyzing likelihood under identity protection, where identity is protected from disclosure beyond the hotline, and under anonymity, where identity is not available to responders to hotline reports.…”
Section: Dependent Variablementioning
confidence: 93%
“…Consistent with the vast majority of prior ethics-related research, we employ a vignette followed by survey questions to elicit individual research participants' perceptions of a particular ethical dilemma and their anticipated reaction (Kaplan and Whitecotton 2001;Schultz et al 1993;Robertson et al 2011). The vignette used in this study involves the senior auditors observing either a manager or a peer throwing away review notes from the engagement partner, which should be answered and retained.…”
This paper investigates auditors' likelihood to report observations of colleagues' unethical behavior. We consider whether two characteristics that are particularly relevant to the audit environment, prior organizational response and power distance, affect willingness to report. Data collected from 106 senior-level auditors suggest auditors are more likely to report on their peers than on their superiors, but they are more likely to report superiors when prior organizational response is strong than when it is weak. Additionally, men appear to be relatively less sensitive to variations in power distance or prior organization response than women. Moral intensity of the case is significantly related to reporting likelihood, and power distance moderates this effect such that those who perceive this scenario to be of lower moral intensity are much more influenced by power distance than are those who perceive it to be of high moral intensity. These results contribute to the existing literature on accounting ethics, as well as inform public accounting governance policies.
“…In neither case is the reporter's identity disclosed to the perpetrator. Prior research (Robertson et al 2011;Curtis and Taylor 2009) has found no significant difference between whistleblowing likelihood under protection versus anonymity. To further this line of research, we present results analyzing likelihood under identity protection, where identity is protected from disclosure beyond the hotline, and under anonymity, where identity is not available to responders to hotline reports.…”
Section: Dependent Variablementioning
confidence: 93%
“…Consistent with the vast majority of prior ethics-related research, we employ a vignette followed by survey questions to elicit individual research participants' perceptions of a particular ethical dilemma and their anticipated reaction (Kaplan and Whitecotton 2001;Schultz et al 1993;Robertson et al 2011). The vignette used in this study involves the senior auditors observing either a manager or a peer throwing away review notes from the engagement partner, which should be answered and retained.…”
This paper investigates auditors' likelihood to report observations of colleagues' unethical behavior. We consider whether two characteristics that are particularly relevant to the audit environment, prior organizational response and power distance, affect willingness to report. Data collected from 106 senior-level auditors suggest auditors are more likely to report on their peers than on their superiors, but they are more likely to report superiors when prior organizational response is strong than when it is weak. Additionally, men appear to be relatively less sensitive to variations in power distance or prior organization response than women. Moral intensity of the case is significantly related to reporting likelihood, and power distance moderates this effect such that those who perceive this scenario to be of lower moral intensity are much more influenced by power distance than are those who perceive it to be of high moral intensity. These results contribute to the existing literature on accounting ethics, as well as inform public accounting governance policies.
“…The interest of academics on this issue was indicated by the development and testing of several models of research associated with the intention to blow the whistle on audit firms Curtis and Taylor 2009;Robertson et al 2011;Seifert et al 2014;Curtis 2010, 2013;Wainberg and Perreault 2016). However, the existing models do not show how the role of the organizational support / team norms and moral intensity possessed the auditor to arrive at causal explanation and assessment of responsibility for the perceived mistakes that caused the auditor's decision to blow the whistle.…”
Our study contributes by providing new insights into the relationship between the individual levels of the antecedents and how the intention of whistleblowing is moderated by perceived organizational support (POS), team norms (TNs) and perceived moral intensity (PMI). In this paper, we argue that the intention of both internal and external whistleblowing depends on the individual-level antecedents (attitudes toward wistleblowing [ATW], perceived behavioral control [PBC], independence commitment [IC], personal responsibility for reporting [PRR] and personal cost of reporting [PCR]) and is moderated by POS, TNs and PMI. The findings confirm our predictions. Data was collected using an online survey on 256 Indonesian public accountants who worked in the audit firm affiliated with the Big 4 and non-Big 4. The results support the argument that all the antecedents of individual levels can improve the auditors' intention to blow the whistle (internally and externally). The nature of the relationship is more complex than analysis by adding moderating variables using the Partial Least Squares Structural Equation Modeling (PLS-SEM) approach. We find that POS, TNs and PMI can partially improve the relationship between the individual-level antecedents and whistleblowing intentions. These findings indicate that the POS, TNs and PMI are a mechanism or that attribute is important in controlling behavior.
“…(Female audit senior)An audit partner in the panel session added: It is preferable to report internally and give the firm a chance to correct the wrongdoing. (Male audit partner)Many international audit organisations also have an anonymous ethics hotline for reporting wrongdoing by audit staff (KPMG, ; Robertson et al ., ). Once the audit member has reported internally (step 4), (s)he expects corrective action to be taken within a reasonable period of time.…”
Section: Whistle‐blowing Framework On Misdeeds Committed By Audit Peersmentioning
confidence: 97%
“…() further find auditors in a principle‐based climate to be more likely to report wrongdoing compared to their colleagues in a rule‐based climate. Robertson, Stefaniak and Curtis () look at the relationship between reputation of wrongdoer and the preferred channel of reporting, and they find the former to be a significant predictor of auditors' intentions to take action, and this will more likely be through internal channels.…”
Section: Whistle‐blowing In An Auditing Contextmentioning
Although the laws and professional codes encourage whistle-blowing, there is a lack of effective arrangements to guide external auditors on how to blow the whistle upon discovery of audit-related wrongdoing committed by audit colleagues. Using a four-stage participatory research method, we explore the professional judgement and decision-making process that external auditors go through as well as factors influencing their decisions to report wrongdoing by colleagues. The consensus results from the interviews conducted enable us to construct a whistle-blowing protocol that can be adopted in audit organisations and the profession.
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