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

Gladys Lee () and Neil Fargher

Journal of Business Ethics, 2013, vol. 114, issue 2, 283-295

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. Copyright Springer Science+Business Media B.V. 2013

Keywords: Whistle-blowing; Fraud; Internal reporting; Whistle-blowing policies; Hotlines (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (17)

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DOI: 10.1007/s10551-012-1348-9

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