Is a Uniform Approach to Whistle-Blowing Regulation Effective? Evidence from the United States and Germany

Gladys Lee (), Esther Pittroff () and Michael J. Turner ()
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Gladys Lee: The University of Melbourne
Esther Pittroff: University of Leipzig
Michael J. Turner: The University of Queensland, UQ Business School

Journal of Business Ethics, 2020, vol. 163, issue 3, No 10, 553-576

Abstract: Abstract The purpose of this study is to examine whether United States (U.S.)-style regulatory intervention to encourage whistle-blowing can be immediately effective if transplanted into another country with a distinctly different historical cultural background and institutional system. A total of 98 U.S. and 84 German accountants participated in a laboratory experiment relating to a case of financial statement fraud. The provision of anti-retaliation protection and monetary rewards for whistle-blowing were manipulated and participants were asked to assume the role of an internal auditor. We hypothesize and find that the provision of anti-retaliation protection and monetary rewards encourage U.S. accountants to blow the whistle. In contrast, among German accountants, where their country features a historical fear and distrust of whistle-blowers, U.S.-style regulatory interventions are less effective. Together, our findings provide strong support for the theory of path-dependence, suggesting that whistle-blowing regulation should not be uniformly transplanted without due consideration of the unique history and culture of a country.

Keywords: Whistle-blowing; Sarbanes–Oxley Act; Dodd–Frank Act (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10551-018-4023-y

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