Could the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 be Helpful in Reforming Corporate America? An Investigation on Financial Bounties and Whistle-Blowing Behaviors in the Private Sector
Purchase on Springer.com
$39.95 / €34.95 / £29.95*
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.
The purpose of this study is to investigate whether the availability of financial bounties and anonymous reporting channels impact individuals’ general reporting intentions of questionable acts and whether the availability of financial bounties will prompt people to reveal their identities. The recent passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 creates a financial bounty for whistle-blowers. In addition, SOX requires companies to provide employees with an anonymous reporting channel option. It is unclear of the effect of these provisions as they relate to whistle-blowing. Our results indicate that a financial bounty has the potential to increase participants’ propensity to report questionable acts and their willingness to reveal their identities when reporting, but the availability of an anonymous reporting channel does not affect participants’ propensity to report questionable acts. These findings could potentially help corporate management, government policy makers and accounting researchers to assess the effectiveness of their internal compliance programs and help determine if financial bounties in the private sector could encourage whistle-blowing.
- Alvarado, K. (2007). Sarbanes Oxley changes sources of whistleblowing. Internal Auditor, 64(2), 18.
- Arnold, D. F., & Ponemon, L. (1991). Internal auditors’ perceptions of whistleblowing and the influence of moral reasoning: An experiment. Auditing A Journal of Practice & Theory, 10, 1–15.
- Association of Certified Fraud Examiners (ACFE). (2004). Report to the nation on occupational fraud and abuse. Austin, TX: ACFE.
- Barnett, T., Cochran, D., & Taylor, S. (1993). The internal disclosure policies of private-sector employers: An initial look at their relationship to employee whistleblowing. Journal of Business Ethics, 12(2), 127–137. CrossRef
- Brinker Dozier, J., & Miceli, M. (1985). Potential predictors of whistleblowing: A prosocial behavior perspective. The Academy of Management Review, 10(4), 823–836.
- Brown, J. D. (1986). Evaluations of self and others: Self-enhancement biases in social judgements’. Social Cognition, 4, 353–376. CrossRef
- Duck, J. M., Terry, D. J., & Hogg, M. A. (1995). The perceived influence of AIDS advertising: Third-person effects in the context of positive media content. Basic and Applied Social Psychology, 17, 305–325. CrossRef
- Dyck, I. J. A., Morse, A., & Lingales, Luigi. (2007). Who blows the whistle on corporate fraud? CRSP Working paper no. 618. Available at SSRN.
- Gundlach, M. J., Douglas, S. C., & Martinko, M. J. (2003). The decision to blow the whistle: A social information processing framework. The Academy of Management Review, 28(1), 107–123.
- Gunther, A. C., & Thorson, E. (1992). Perceived persuasive effects of product commercials and public service announcements. Third-person effects in new domains. Communication Research, 19, 547–596. CrossRef
- Hooks, K. L., Kaplan, S. E., & Schultz, J. J., Jr. (1994). Enhancing communication to assist in fraud prevention and detection. Auditing: A Journal of Practice & Theory, 13(2), 86–117.
- Howse, R., & Daniel, R. J. (1995). Rewarding whistleblowers: The costs and benefits of an incentive-based compliance strategy. In R. J. Daniels & R. Morck (Eds.), Corporate decision-making in Canada (pp. 525–549). Calgary: University of Calgary Press.
- Kaplan, S. E., & Schultz, J. J., Jr. (2006). Intentions to report questionable acts: An examination of the influence of anonymous reporting channel, internal audit quality, and setting. Paper Presented at the annual meeting of the American Accounting Association, Washington, D.C.
- Kohn, A. (1993). Why incentive plans cannot work. Harvard Business Review, 71(5), 54–63.
- KPMG. (2003). KPMG 2003 fraud survey. New York: KPMG.
- KPMG. (2006). KPMG forensic integrity survey 2005–2006. New York: KPMG.
- Miceli, M. P., & Near, J. P. (1985). Characteristics of organizational climate and perceived wrongdoing associated with whistleblowing decisions. Personnel Psychology, 38, 525–544. CrossRef
- Miceli, M. P., & Near, J. P. (1992). Blowing the whistle: The organizational and legal implications for companies and employees. Lexington, MA: Lexington Books.
- Miceli, M. P., Roach, B., & Near, J. P. (1988). The motivations of anonymous whistleblowers: The case of federal employees. Public Personnel Management, 17, 281–296.
- Moberly, R. (2007). Unfulfilled expectations: An Empirical analysis of why sarbanes oxley whistleblowers rarely win. William & Mary Law Review, 49, 65. SRN: http://ssrn.com/abstract=977802. Accessed 22 Nov 2012.
- Near, J. P. (1988). The internal auditor’s ultimate responsibility: The reporting of sensitive issues. Altamonte Springs, FL: The Institute of Internal Auditors.
- Near, J. P., & Miceli, M. P. (1995). Effective whistle-blowing. Academy of Management Review, 20(3), 679–708.
- Read, D. (2005). Monetary incentives, what are they good for? Journal of Economic Methodology, 12(2), 265–276.
- Rosenbaum, D. P., Lurigio, A. J., & Lavrakas, P. J. (1989). Enhancing citizen participation and solving serious crime: A national evaluation of crime stoppers programs. Crime & Delinquency, 35, 401. CrossRef
- Salcido, R. (2010). The 2009 False Claims Act amendments: Congress’ efforts to both expand and narrow the scope of the false claims act. Public Contract Law Journal, 39(4), 741–784.
- Schultz, J. J., Jr., Johnson, D. A., Morris, D., & Dyrnes, S. (1993). An investigation of the reporting of questionable acts in an international setting. Journal of Accounting Research, 31, 5–103. CrossRef
- Stauffer, R.R., & Kennedy, A.D. (2010). Dodd–Frank act promises large bounties for whistleblowers. Retrieved 13 November, 2010 from www.Law.com.
- Wartzman, R., & Barrett, T. (1989, September 27). Government could stifle False Claims Act. Wall Street Journal, B1.
- Could the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 be Helpful in Reforming Corporate America? An Investigation on Financial Bounties and Whistle-Blowing Behaviors in the Private Sector
Journal of Business Ethics
Volume 112, Issue 4 , pp 597-607
- Cover Date
- Print ISSN
- Online ISSN
- Springer Netherlands
- Additional Links
- Dodd-Frank Act
- Financial bounties
- Anonymous reporting channel
- Industry Sectors