Whistleblowing and management accounting: An approach

A study of whistleblowing among trainee auditors

“…However, the relationship is fraught with potential ethical dilemmas. As Loeb and Cory (1989) point out, auditors are subject to a variety of conflicting pressures both from their employer, their profession and their clients. Yet as Vinten (1992b) notes, auditors find out early on in their careers that they are watchdogs over the company and not bloodhounds, to use the phrase first coined in the Kingston Cotton Mill case.…”

“…Some authors have sought to further broaden the profession's interpretation of the public interest to incorporate the concept of moral responsibility (Loeb and Cory, 1989). This perspective recognises that in many areas of the professional accountant's work, s/he has the power to influence the outcome of situations that have an effect on society.…”

“…Whistleblowing is generally viewed a process rather than an event (Near and Miceli, 1985;Loeb and Cory, 1989;Somers and Casal, 1994;Jubb, 1999;Grant, 2002). This process consists of at least four elements (Near and Miceli 1985):…”

“…This process view emphasises the stages in the ethical decision making process for the would-be whistleblower and in so doing highlights the ethical dilemmas inherent in the decision to blow the whistle. Loeb and Cory (1989) extend this process view with a depiction of the decision process for accountants in industry as adapted from that suggested by De George (1981) for professional engineers (see Figure 1). This depiction is congruent with the process view expressed by Near and Miceli (1985) and the bystander intervention theory as depicted by Latané and Darley (1970).…”

“…For auditors faced with deciding whether or not to report wrongdoing, materiality is an essential pre-requisite (Loeb and Cory, 1989). Thus, auditors may tend to judge wrongdoing in monetary terms, or in other words; they make a judgement on whether the wrongdoing is sufficiently costly to warrant investigation.…”