Unethical business decisions and accounting fraud have occurred as a result of lapses in ethical sensitivity and judgment. The Association for Certified Fraud Examiners (ACFE) estimates that a typical organization loses 5% of its total yearly revenues to fraud; globally this translates into losses of over three trillion dollars each year (ACFE, 2016). Regulations such as the Dodd-Frank Whistleblower Program and the Sarbanes-Oxley Act encourage reporting wrongdoing to mitigate fraud losses. Although there are many studies that explore the characteristics of whistleblowers, there are few studies that have examined the impact of an individual’s level of moral reasoning on whistleblowing intentions for financial statement fraud. This study offers several contributions over prior research by exploring the impact of two measures of moral reasoning (P-score and the N2-score) on decisions to whistleblow to either internal or external reporting outlets. This study finds that an individual’s level of moral reasoning impacts whistleblowing intentions to internal management, but an individual’s level of moral reasoning does not impact decisions to whistleblow externally. The practical implications of these findings are discussed.
Shawver, T.J. and Shawver, T.A. (2018), "The Impact of Moral Reasoning on Whistleblowing Intentions", Jefrey, C. (Ed.) Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 21), Emerald Publishing Limited, Bingley, pp. 153-168. https://doi.org/10.1108/S1574-076520180000021005
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