Whistleblowing on accountingy-related misconduct: A synthesis of the literature

Lee, Gladys; Xiao, Xinning

doi:10.1016/j.acclit.2018.03.003

Cited by 93 publications

(75 citation statements)

References 86 publications

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“…Since the literature in this field is voluminous, we went through a painstaking selection process about the specific articles and themes, which finally lead us to selecting 156 articles. This methodology has also been used by several other authors who have also undertaken literature reviews for their research (Carcello, Hermanson, and Ye, 2011 [76]; Lee and Xiao, 2018 [77]; Schnatterly, Gangloff, and Tuschke, 2018 [78]).…”

Section: Methodology Of the Reviewmentioning

confidence: 99%

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Research Topics in Accounting Fraud in the 21st Century: A State of the Art

2019

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Companies play a role in society that clearly goes beyond mere economic interest. Their contribution to social development and to the sustainability of the territory where they are located seems unquestionable. However, after the great financial scandals of companies such as ENRON, WorldCom or AHOLD, interest groups require accurate and transparent financial information. The development of more demanding financial reporting standards seems, however, not to have been up to scratch, since accounting fraud continues to be detected all over the world. The search, therefore, for possible causes that may induce companies to act unethically was the main motivation behind this research. To do this, a review of the literature in high-impact journals that has dealt with accounting fraud, covering the main lines of research, was carried out. The findings of the literature review highlight the importance of responsible corporate governance and good accounting practices, as well as the importance of certain psychological characteristics of managers and employees as enhancers of the lack of ethics. It is clear that the social cost of accounting fraud should be minimized, and governments should develop specific policies that combine responsible corporate governance in companies with the sustainability of their environment.

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Section: Methodology Of the Reviewmentioning

confidence: 99%

“…Lee and Xiao, 2018 [77] Review of the concept of reporting irregularities, analyzing the characteristics of the complainant, the characteristics of the company, the type of complaints channel provided and the consequences for the company and the complainant.…”

Section: Author/year Main Contributionmentioning

confidence: 99%

Research Topics in Accounting Fraud in the 21st Century: A State of the Art

2019

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“…This clear dichotomy between rewards or bounties and protection from losses, e.g., retaliation or sanction, is a recurring theme in whistleblowing laws. While much whistleblowing research has focused on individual and situational factors (Lee and Xiao 2018), few have taken laws specifically into account. What has so far, to my knowledge, not been done is an evaluation of the effectiveness of such laws using prospect theory.…”

Section: Introductionmentioning

confidence: 99%

“…This definition is used widely across academic literature. Whistleblowing is characterized as a highly complex decision process (Chiu 2003), including a multitude of situational, individual, as well as institutional factors (Near and Miceli 1996;Mesmer-Magnus and Viswesvaran 2005;Lee and Xiao 2018). Although no formal model has emerged as of today (Lee and Xiao 2018), the general structure of the process can be characterized as shown in Fig.…”

Section: Introductionmentioning

confidence: 99%

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Making regulation fit by taking irrationality into account: the case of the whistleblower

Oelrich¹

2019

Bus Res

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Prospect theory describes people as bounded rational decision maker. What sparked widespread discussion after its initial introduction in 1979 is today criticized for lack of applicability. I use the debate about whistleblowing laws to show that prospect theory may be applied prescriptively in economics as a tool to design effective legislation. Whistleblowing is often seen as an important way to uncover fraud, which causes billions of USD in damages annually. I first examine the fragmented legal landscape across Europe, showing that it can be framed as one favoring rewards or the prevention of losses. I conduct an experiment with 39 university students, wherein legislative incentives are evaluated under a prospect theoretical frame in a setting of ambiguity and high stakes. Results suggest that people exhibit the typical s-shaped value function and loss aversion in line with prospect theory. In addition, their intention to whistleblow is more heavily reduced by losses than increased by gains. The study adds to the scarce literature of prospect theory on decisions in ambiguous contexts-as well as to the applicability of the theory as a prescriptive instrument in designing institutional frames. For whistleblowing in particular, a protection-based approach seems most promising.

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