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Article
Publication date: 22 November 2019

Andrea M. Scheetz and Timothy J. Fogarty

Based on exchange theory and the generalized norm of reciprocity, psychological contracts perceived by employees are believed to have dysfunctional consequences for…

Abstract

Purpose

Based on exchange theory and the generalized norm of reciprocity, psychological contracts perceived by employees are believed to have dysfunctional consequences for organizations if breached. This paper aims to study the willingness of employees to report fraud, as such is an important aspect of internal control for organizations.

Design/methodology/approach

A 2 × 2 between-subjects experiment was conducted in which 99 participants with diverse accounting backgrounds were first asked questions about their preconceived beliefs (psychological contract) regarding how reports of unethical conduct would be managed, and their reaction if these beliefs were broken (psychological contract violation). Participants were given a hypothetical situation of fraud and then asked to indicate their likelihood of reporting fraud to a supervisor.

Findings

The main hypotheses are that employees will be less likely to report fraud when the organization fails to signal the presence of a positive ethical environment or when management reacts weakly to previous reports of unethical activity. The data and findings support these hypotheses. Additional testing also reveals that a psychological contract violation mediates the relationship between the outcome of previous reports and the intention to report fraud.

Research limitations/implications

As with any experimental study, this study’s results come with limitations. Reading an overly simplistic scenario that omits real world details and providing intention to report is very different from actually reporting fraud in one’s own place of employment. Therefore, reporting intentions may vary from actual reporting behavior. Further, reporting motivation (self-defense, altruism, etc.) and concern over retaliation are not measured.

Practical implications

Employees have expectations surrounding ethical corporate environments. Psychological contract violations occur as a result of broken expectations and are common in the workforce. In this study, a breakdown in the internal control environment because of a poor ethical culture, caused an even greater breakdown in internal controls because of employees’ decreased reporting intentions.

Social implications

Psychological contract violations impact employees’ intention to report fraud. These violations need to be understood so that additional measures and safeguards can be instituted when employees are not acting as a fraud defense or detection mechanism. During such times when there is a breakdown in this type of internal control (that is, when employees might be hesitant to report fraud), extra safeguards against fraud, additional procedures to detect fraud, and enhanced employee training encouraging reporting of suspected unethical conduct, become even more important.

Originality/value

Strong experimental methods provide a rigorous way to evaluate a problem of our day: job insecurity caused by rampant organizational turbulence. The hidden cost is expressed in terms of how less can be expected of employees as a first line of defense against fraud.

Details

Journal of Accounting & Organizational Change, vol. 15 no. 4
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 4 March 2019

Andrea M. Scheetz and Aaron B. Wilson

The purpose of this paper is to investigate whether intention to report fraud varies by organization type or fraud type. Employees who self-select into not-for-profits may…

Abstract

Purpose

The purpose of this paper is to investigate whether intention to report fraud varies by organization type or fraud type. Employees who self-select into not-for-profits may be inherently different from employees at other organizations.

Design/methodology/approach

The authors conduct a 2 × 2 experiment in which (n=107) individuals with a bookkeeping or accounting background respond to a fraud scenario. Analysis of covariance models are used for data analysis.

Findings

The authors find evidence that not-for-profit employees are more likely to report fraud and that reporting intention does not differ significantly by fraud type.

Research limitations/implications

Limitations of this study include the simulation of a fraud through a hypothetical incident and the use of online participants.

Practical implications

This study expands the commitment literature by examining the role that commitment plays in the judgment and decision-making process of a whistleblower. Findings suggest affective commitment, which is an employee’s emotional attachment to the organization, and mediate the path between organization type and reporting intention. Affective commitment significantly predicts whistleblowing in not-for-profit organizations but not in for-profit organizations.

Originality/value

This research provides insight into how organization type influences whistleblowing intentions through constructs such as organizational commitment and public service motivation.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 31 no. 1
Type: Research Article
ISSN: 1096-3367

Keywords

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Book part
Publication date: 30 September 2019

Andrea M. Scheetz and Joseph Wall

With the increasing prevalence of awards for reporting fraudulent activity, it is important to learn if there are unintended consequences associated with the language…

Abstract

With the increasing prevalence of awards for reporting fraudulent activity, it is important to learn if there are unintended consequences associated with the language offering such awards. Aside from issues regarding submitting unsubstantiated claims of fraud to the Securities and Exchange Commission (SEC), Section 922 of the Dodd–Frank Act may inadvertently encourage would-be whistleblowers to delay reporting fraud. Potential whistleblowers may choose to delay reporting due to the consideration of alternatives to external reporting, in a misguided attempt to increase the size of an award, or due to their ethical stance on the issues. Using a three-stage mixed methods (experiment, open-ended interviews, and experiment) approach, this study provides evidence that increased knowledge of statutes involving external whistleblowing may result in reporting delays. The data suggest that despite statements from the SEC forbidding this, managers may choose to delay reporting when under the threshold necessary to receive an award. In such a manner, managers may be allowing the fraud to grow to a necessary perceived level over time. As might be expected, the accountants in this study were more cautious, checking to see if internal reporting worked first. Of particular note, 16 individuals indicated that they would never report, with the motivation apparently driven by fear of job loss and/or retaliation. Lastly, the intention to delay or speed up reporting may be very different based on the perception of ethics involved in the decision.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78973-370-9

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Book part
Publication date: 30 September 2019

Abstract

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78973-370-9

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Book part
Publication date: 20 August 1996

Abstract

Details

The Peace Dividend
Type: Book
ISBN: 978-0-44482-482-0

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Book part
Publication date: 20 August 1996

Abstract

Details

The Peace Dividend
Type: Book
ISBN: 978-0-44482-482-0

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Book part
Publication date: 19 October 2021

W. Brian Dowis, Ted D. Englebrecht and Mike Wiggins

Married couples receive tax benefits such as favorable tax rates, higher exclusions, higher phase-outs, and combined deductions. However, joint and several tax liability…

Abstract

Married couples receive tax benefits such as favorable tax rates, higher exclusions, higher phase-outs, and combined deductions. However, joint and several tax liability is a major issue facing these taxpayers. The term innocent spouse relief, within the Internal Revenue Code, is a direct result of one spouse failing to satisfy the joint liability for the married couple. Since both individuals are jointly and severally liable for the combined liability, the innocent spouse may be responsible for the liability in whole or in part. Our study examines this highly litigated arena of innocent spouse relief. To assist in this area of taxation, the Internal Revenue Service has provided taxpayers and tax practitioners with guidance. Revenue Procedure 2003-61 (2003-2 CB 296) outlines factors useful in determining whether innocent spouse relief should be granted. Additionally, this study creates a predictive model containing only three significant factors (economic hardship, knowledge/reason, significant benefit) capable of predicting with approximately 89% accuracy. These same three variables are significant after running multiple regression with p-values of 0.002 (economic hardship), 0.000 (knowledge/reason to know), and 0.001 (significant benefit). These factors provide valuable insight to practitioners when advising clients on challenging or accepting the Internal Revenue Service's decision. Additionally, abuse is marginally significant in the regression model. Also, judge gender and political affiliation are analyzed. However, the gender of the judge and political affiliation fail to be statistically significant using the chi-square test and regression model.

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Article
Publication date: 9 May 2018

Andrea Nana Ofori-Boadu, Richard Yeboah Abrokwah, Spero Gbewonyo and Elham Fini

The purpose of this paper is to investigate the effect of an admixture, Swine-waste Bio-char (SB), on the water absorption characteristics of cement pastes.

Abstract

Purpose

The purpose of this paper is to investigate the effect of an admixture, Swine-waste Bio-char (SB), on the water absorption characteristics of cement pastes.

Design/methodology/approach

The effect of SB percentages, heat treatment temperatures, water/binder ratios, and age on the water absorption percentages (WAPs) of SB modified cement pastes were investigated using scanning electron microscopy-energy dispersive spectra, FTIR, Brunauer-Emmett-Teller, and laboratory experiments.

Findings

The WAPs of cement pastes with SBs produced at the low treatment temperature (LTT) of 340°C and 400°C were significantly lower (p<0.01) than pastes with SBs produced at the high treatment temperature (HTT) of 600°C and 800°C. This was attributed primarily to the more dominant presence of hydrophobic alkyl surface groups from non-volatilized matter in LTT-SBs. This had also resulted in lower surface areas and pore volumes in LTT-SBs. As a result of the volatilization of these labile hydrophobic groups at HTT, HTT-SBs were more hydrophilic and had higher surface areas and pore volumes. Consequently, HTT-SB pastes had higher WAPs and no significant differences (p<0.05) existed between HTT-SB pastes and control pastes. Also, low water/binder ratios and aging reduced water absorption of SB modified cement pastes.

Practical implications

LTT-SBs reduce water absorption and could reduce concrete deterioration; and as such, associated building repair, maintenance, and adaptation costs. Notably, reductions in concrete water absorption will extend the service life of concrete buildings and infrastructures, particularly in unfavorable environmental conditions. The observed benefits are tempered by the current lack of information on the effects of SB on compression strength, workability, and other durability properties.

Social implications

SB utilization in concrete buildings will enhance swine-waste disposal and reduce negative environmental impacts on swine farming communities; consequently, improving their quality of life.

Originality/value

Current bio-char research is focused on plant-derived bio-char toward soil remediation and contaminant removal, with very limited applications in concrete. This research advances knowledge for developing livestock-derived bio-char, as a PCRM, toward more sustainable and durable concrete structures.

Details

International Journal of Building Pathology and Adaptation, vol. 36 no. 3
Type: Research Article
ISSN: 2398-4708

Keywords

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Article
Publication date: 28 February 2020

Mark D. Sheldon and J. Gregory Jenkins

This study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental…

Abstract

Purpose

This study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental activities under the recently clarified and recodified attestation standards in the United States.

Design/methodology/approach

The paper uses a 2 × 3 between-subjects experiment to identify differences in 153 non-expert environmental report users' perceptions of report believability based on positive or negative firm performance and (level of) assurance provided by an accounting firm.

Findings

Results show a main effect in that negative performance reports are perceived to be more believable than positive performance reports, as driven by negative performance reports being significantly more believable when no assurance is present. The firm performance effect is eliminated once limited or reasonable assurance is provided. Further, positive performance reports with limited, but not reasonable, assurance are perceived to be more believable than reports without assurance. No differences are identified within the negative performance condition.

Practical implications

Limited assurance might be used as an impression management tool to enhance the believability of positive performance environmental reports. Users, practitioners, and standard-setters should also be aware that users might believe environmental reports are assured, even when no such assurance has been provided.

Originality/value

This paper examines the impact of assured environmental reporting on users that review firms' environmental reports outside of a shareholder/investor role. The study also demonstrates conditions in which firm performance and assurance impact perceptions of report believability.

Details

Accounting, Auditing & Accountability Journal, vol. 33 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

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