Companies’ Use of Whistle-Blowing to Detect Fraud: An Examination of Corporate Whistle-Blowing Policies

Abstract

In order to provide an effective whistle-blowing system, it is expected that companies would provide employees with a high level of disclosure regarding the whistle-blowing process. This study investigates variation in the extent of whistle-blowing disclosures. As a measure of whistle-blowing implementation, this study further examines the provision of a hotline channel. The results suggest that the extent of whistle-blowing disclosures is positively associated with the permissibility of anonymous reporting and organisational support for whistle-blowing, the number of external directors on the audit committee, and the existence of concentrated shareholdings. The mere existence of whistle-blowing disclosures could simply be symbolic. The findings also indicate a greater likelihood of the provision of hotlines when companies are larger in size, have a higher level of current inventory, are cross-listed in the US, and permit anonymous reporting.

From ethical codes to ethical auditing: An ethical infrastructure for social responsibility communication

“…Communication should not be limited to complaints concerning bad practices. An ethical culture should include the involvement of employees in alerting, preventing, and detecting situations and conflicts of interest that can yield to a lack of compliance, which damages a corporation's reputation (Lee;Fargher, 2013;Calvo-Cabezas, 2015). The same damage can occur to external groups, users, clients, suppliers, etc.…”

Analisis Empiris Pengaruh Efektifitas Komite Audit, Efektifitas Internal Audit, Whistleblowing System, Pengungkapan Kecurangan dan Reaksi Pasar

“…Zhang et al (2007), Barua et al (2010), dan Kamarudin (2014) Lee & Fargher (2012), dan Kamarudin (2014).…”

“…Jika komite audit turun secara langsung dalam pelakasanaan whistleblowing system dapat mengakibatkan terjadinya penumpukan fungsi yang dapat menyebabkan whistleblowing system ini tidak berjalan dengan baik. Penelitian ini tidak sesuai dengan hasil penelitian Lee & Fargher (2012) yang menyebutkan bahwa pengungkapan kecurangan melalui whsitleblowing system berhubungan dengan jumlah anggota independen dalam komite audit.…”

The Sarbanes-Oxley Act: Impact, Processes, and Roles for Strategic Communication

“…SOX forced a refocus on internal controls, set new standards for audit committees and moved oversight of the accounting firm to the audit committee, thereby ending self-regulation, all to restore public confidence in financial information used by investors (Stocker & Schramm, 2013). Violation of SOX antifraud law also carries criminal penalties for retaliation against whistleblowers to protect employees with corporate misconduct information (Lee & Fargher, 2013;Miceli, Near, & Dworkin, 2008). Publicly held companies now must disclose in annual reports, and otherwise, information about top executives' compliance with codes of ethics as a window onto corporate and employee behavior influences (Schwartz, 2004).…”