The Impact of Financial Incentives and Perceptions of Seriousness on Whistleblowing Intention

Andon, Paul; Free, Clinton; Jidin, Radzi; Monroe, Gary S.; Turner, Michael J.

doi:10.1007/s10551-016-3215-6

Cited by 88 publications

(86 citation statements)

References 38 publications

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“…Mogielnicki (2011) argues that the extension by the DFA would incentivize whistleblower by utilizing rewards for external whistleblowing. This is in line with the experimental findings by Andon et al (2018) who show with a group of professional auditors that financial rewards lead to higher external (e.g., authorities) whistleblowing intention. However, this effect is mediated by the seriousness of the wrongdoing.…”

Section: Fig 2 Overview Of Whistleblowing Laws In Europe and Select supporting

confidence: 92%

“…Not only loss aversion in prospect theory suggests that losses should have a stronger impact on people than gains, but also results of whistleblowing research discussed earlier. In particular, the many studies that suggest retaliation to have a strong influence on the whistleblowing intention and the findings by Andon et al (2018) and Rose et al (2018) in relation to the rather mixed influence of rewards substantiate the idea that losses weigh heavier than gains. Thus, a loss is a stronger dis-motivation to whistleblow, than a gain increases intention to whistleblow.…”

Section: Hypothesesmentioning

confidence: 81%

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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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Section: Fig 2 Overview Of Whistleblowing Laws In Europe and Select supporting

confidence: 92%

Section: Hypothesesmentioning

confidence: 81%

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

Oelrich¹

2019

Bus Res

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“…As a member of the organization, employees have a responsibility to protect their workplace from suffering and dangers (Winardi, 2013). This finding corresponds with some previous studies, such as Ahmad (2011), Bagustianto and Nurkholis (2014), Mustapha and Siaw (2012), Winardi (2013), Miceli and Near (1985), Hakim et al (2017), and Andon et al (2016). In general, all these studies proved that fraud severity rate affects whistleblowing intention.…”

Section: The Effect Of Fraud Severity Rate On Whistleblowing Intentionsupporting

confidence: 92%

Whistleblowing Intention of Financial Keepers in Education Organization

Natawibawa

Irianto

Roekhudin

2019

JAM

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The objective of this research was to examine the effect of organizational commitment and fraud severity rate on whistleblowing intention of financial keepers in school organization and to understand this relationship through prosocial organizational theory. The research population was 214 persons comprising of 24 principals, 97 vice-principals, 22 school administration heads, 32 treasurers, and 39 financial administration staffs in Public Senior/Vocational/Moslem High Schools in Malang City. Census sampling technique was used. Data were collected with a questionnaire. The return rate was 89.72%, meaning that there are 192 questionnaires returned and filled. Multiple regression instrument was used to analyze the data. The result shows that the unstandardized coefficients rate of organizational commitment is valued at-0.197 with a significance value of-0.002, while that of fraud severity rate is 0.768 with a significance value of 0.000. The conclusion was that organizational commitment has a negative effect on whistleblowing intention, whereas fraud severity rate has a positive effect on whistleblowing intention. It was suggested that the next research should use education organization at another level as a research object. Other variables or theories can be possibly used to create a better model of multiple linear regression.

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“…Financial incentive results in a higher intention to whistleblow to a relevant external authority [2]. Researcher also fine that Financial rewards were more effective at motivating performance than non-financial rewards.…”

Section: A Financial Rewardmentioning

confidence: 94%

Tax Fraud Reporting: The Effect of Envious Motive and Financial Reward

Widuri¹,

Jevera²,

Zerlinda³

2019

Proceedings of the International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 19)

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This research examines the influence of envious and financial reward on tax fraud reporting. The focus in this research is on the motivation of a tax payer in reporting other tax payer who committed tax fraud. This research use fully crossed between-subjects design in experimental studies. This research use primary data which is obtained by using experimental studies as a media. The sample used in this research is data from 50 personal tax payers in Indonesia, with an accidental sampling method. There are two motivations in this research, first is intrinsic motivation that we mention as the existence of envious. The envious here means a tax payer who committed tax fraud has higher net income so that they have bigger funds or capital to develop their business, compared to tax payers who obey paying taxes. Extrinsic motivation in this research is financial reward, which means the tax payers who report the tax fraud (whistleblower) to the Pusat Pengaduan Direktorat Jenderal Pajak will get amount of money as a reward. This research found that both of this motivation do not have significant effect on the intention to report a tax payer who committed tax fraud. But, when envious motive associated with moral obligations as mediation variable, it shows better result. This research contributes to Indonesia Tax Authority in optimizing the participation of whistleblower, which will minimize the occurrence of tax fraud. The result of this research gives some suggestions to improve tax compliance that will create justice for all tax payers in Indonesia, some action that will support whistleblower is increasing protection for the tax fraud reporter. Other suggestion is to motivate even more, both in moral and reward.

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The Impact of Financial Incentives and Perceptions of Seriousness on Whistleblowing Intention

Cited by 88 publications

References 38 publications

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

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

Whistleblowing Intention of Financial Keepers in Education Organization

Tax Fraud Reporting: The Effect of Envious Motive and Financial Reward

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