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1 – 10 of 607Whistleblowers have been credited for uncovering financial scandals in companies globally, including Enron, Olympus Corporation, and WorldCom. Despite increasing support and…
Abstract
Whistleblowers have been credited for uncovering financial scandals in companies globally, including Enron, Olympus Corporation, and WorldCom. Despite increasing support and incentives for whistleblowing, there generally remains reluctance to blow the whistle. Thus, the purpose of this study is to review: (1) the determinants of internal and external whistleblowing on accounting-related misconduct, (2) U.S. whistleblowing legislation on accounting-related misconduct and related research, and (3) the effects of whistleblowing on firms and whistleblowers. Within each area, suggestions for future research are offered.
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Elina Karpacheva and Branislav Hock
Foreign whistleblowers are foreign citizens who help national enforcement authorities to sanction both foreign-based corporations and home-based corporations that engage in…
Abstract
Purpose
Foreign whistleblowers are foreign citizens who help national enforcement authorities to sanction both foreign-based corporations and home-based corporations that engage in economic crime. This paper aims to investigate the expansion of US law in the area of transnational economic crime by discussing the case of foreign whistleblowers.
Design/methodology/approach
This paper has been developed from a literature review carried out as part of a wider study into policing international bribery.
Findings
This paper shows that extraterritorial application of US whistleblowing laws is part of a broad trend associated with extraterritorial enforcement of US anti-corruption statutes such as the Foreign Corrupt Practices Act (FCPA). The extraterritorial reach of the FCPA and other statutes allowed the USA to become the leader in sanctioning US corporations as well as non-US corporations for economic crime. In effect, some US enforcement practices have become the standard that has influenced law and law enforcement in other countries as well as internal compliance of corporations.
Originality/value
In spite of the profound impact foreign whistleblowing has on the effectiveness of national anti-corruption enforcement, this topic has been largely neglected by academic research. To the best of the authors’ knowledge, this paper is the first to provide an overview of the role of foreign whistleblowers and the significant impact foreign whistleblowing has for legal reform in European countries and internal compliance of corporations in Europe and beyond.
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To describe the new EU Whistleblowing Directive and its implications.
Abstract
Purpose
To describe the new EU Whistleblowing Directive and its implications.
Design/methodology/approach
Describes organizations to which the Directive applies, the scope of reportable whistleblowing concerns, whistleblowers’ reporting channels and mechanisms, whistleblower protections, how organizations should respond to whistleblower reports and how organizations should prepare for the new rules.
Findings
The new Directive will require Member States to create rules for organizations with more than 50 workers, will mandate such organizations to implement whistleblowing hotlines for reporting a broad range of EU law violations, and will contain minimum standards on how to respond to and handle any concerns raised by whistleblowers.
Practical implications
Organizations in the EU can and should start taking initial steps to prepare for the new rules as soon as possible. There will likely be some differences among whistleblower rules in individual EU Member States.
Originality/value
Practical guidance from experienced corporate, technology, media, telecommunications and compliance lawyer.
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Bryan B. House, Pam L. Johnston and Courtney Worcester
To explain a recent enforcement action by the USA Securities and Exchange Commission (SEC) whereby the SEC brought its first enforcement action for retaliation against a…
Abstract
Purpose
To explain a recent enforcement action by the USA Securities and Exchange Commission (SEC) whereby the SEC brought its first enforcement action for retaliation against a whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
Design/methodology/approach
Explains the SEC’s recent enforcement action under Dodd-Frank, highlighting the efforts that a company undertook with respect to continuing to employ a whistleblower after potentially fraudulent activity was reported and discusses practical problems faced by such companies when trying to simultaneously investigate potential wrong-doing without being seen as retaliating against a whistleblower.
Findings
Through this enforcement action, the SEC has demonstrated a willingness to bring cases to enforce Dodd-Frank’s anti-retaliation provisions even though Dodd-Frank does not expressly grant it such enforcement authority.
Practical implications
Companies must have a strong culture of compliance and a strong policy encouraging whistleblowers to report concerns internally if at all possible. Once the whistleblower has reported to the SEC, a company will need to maintain the status quo with respect to the whistleblower.
Originality/value
Practical guidance from attorneys with experience with the SEC and whistleblower actions.
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Jan Mei Soon and Louise Manning
The purpose of this paper is to undertake a two-phase desktop review of literature sources in order to conceptualise, frame, and critique existing whistleblowing models and…
Abstract
Purpose
The purpose of this paper is to undertake a two-phase desktop review of literature sources in order to conceptualise, frame, and critique existing whistleblowing models and strategies and consider how whistleblowing strategies form part of an effective food crime management system (FCMS) especially for small and medium sized organisations.
Design/methodology/approach
Existing literature from academic sources, financial, healthcare, food industries has been reviewed and critiqued in order to construct a conceptual framework that can inform future empirical research.
Findings
Whistleblowing strategies can form an effective part of a FCMS. Appropriate regulatory protection of those who whistleblow is crucial to not only safeguard individuals but also to mitigate food crime and protect consumers from loss and potential harm. Barriers to whistleblowing exist and if these are not addressed then individuals will be reluctant to report food crime. Further empirical research is required to assess the influence of these and other factors identified in this research and how they can be overcome.
Originality/value
The framework will provide food industry practitioners with guidance on the effective application of whistleblowing strategies within a FCMS.
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Whistleblowing – the unauthorized disclosure of illegal orunethical conduct within an organization – has an ancient lineage,although the first known use of the term rather than…
Abstract
Whistleblowing – the unauthorized disclosure of illegal or unethical conduct within an organization – has an ancient lineage, although the first known use of the term rather than the concept was in 1963. Far from being subversion, it is a vital, almost indispensable control device. This is seen in case study examples of the Challenger disaster, the North Sea oil rigs and international banking. Despite this, whistleblowers experience discrimination and retaliation. One way forward is to set up codes of practice that will distinguish valid from invalid forms of whistleblowing, and ensure that the contribution of whistleblowers to the organization is maximized and public interest is not sacrificed.
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Fabian Maximilian Teichmann and Marie-Christin Falker
The purpose of the paper is to illustrate how companies may benefit from whistleblowing and how whistleblowing may be incentivized to more effectively combat corruption.
Abstract
Purpose
The purpose of the paper is to illustrate how companies may benefit from whistleblowing and how whistleblowing may be incentivized to more effectively combat corruption.
Design/methodology/approach
No clear hypothesis could be formulated based on the literature review. Therefore, an explorative approach was selected for the purpose of this study. Ten selected compliance experts were interviewed, and the results were subjected to summarizing content analysis.
Findings
It was found that corruption, particularly bribery, continues to be prevalent in many corporations and that current anti-bribery incentives are rather inefficient. It was also found that whistleblowing incentives have thus far not been investigated in sufficient depth in the literature, despite the fact that they can be immensely useful in combating corruption.
Research limitations/implications
Interviews with different experts, at different times, or selecting experts from different locations could have led to diverging results.
Practical implications
Incentive systems, particularly whistleblowing incentives, can be designed to prevent corruption in multinational corporations.
Originality/value
This study explores a new field and develops innovative theory to gain a deeper understanding of whistleblowing.
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Turhan Erkmen, Arzu Özsözgün Çalışkan and Emel Esen
The purpose of this study is to analyze whether whistleblowing is a fact among accounting professionals when there is a serious wrongdoing at the workplace and to investigate the…
Abstract
Purpose
The purpose of this study is to analyze whether whistleblowing is a fact among accounting professionals when there is a serious wrongdoing at the workplace and to investigate the differences between accounting professionals about whistleblowing intention according to demographic variables. This paper reviews whistleblowing behavior in the context of professional accounting in Turkey. This study discusses whistleblowing event and analyzes it by using the scenario technique.
Design/methodology/approach
Three whistleblowing scenarios were used and participants were asked to indicate the likelihood that the individual in the scenario would blow the whistle. Participants indicated blowing the whistle action on a seven-point likert-type of scale for the given scenario.
Findings
The main hypothesis is the differences between whistleblowing behavior of accounting professionals in relation to such demographic characteristics as working conditions, total tenure, gender, age, membership and number of customers according to the scenario. The findings support that accounting professionals' demographic factors are important to understand the whistleblowing behavior from their perspectives. Whistleblowing is experienced among accounting professionals above the average level for each scenario. There are no differences about accounting professionals' whistleblowing behavior in terms of their demographic characteristics (working circumstances, total tenure, age, membership and number of customers) with the exception of gender and age variables.
Research limitations/implications
This study's results come with some limitations. One limitation is the low response rate achieved in the data collection process. Another limitation is that this study is conducted among accounting professionals, so these finding results cannot be generalized to other different professionals in Turkey.
Practical implications
The findings of the study may get the board of directors' or managers' attention to the point that they should become aware of the importance of whistleblowing in their organizations to encourage employees to report the wrongdoings internally.
Social implications
When employees report these wrongdoings outside the organization, corporate reputation of the company can be damaged. This ethical issue should be solved in the context of the organization.
Originality/value
This study aims to make several contributions to the accounting and management literature. First, it extends the recent accounting literature on whistleblowing by examining demographic characteristics. Second, most of the studies use questionnaire to collect the data from the participants, but in this study, the authors used the scenario technique that reflects the whistleblowing behavior tendency in a work environment in order to learn accounting professionals' evaluations of whistleblowing behavior.
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This paper aims to reframe the whistleblowing process by examining the individual and situational factors that have been overlooked by prior studies. Ethical climate, public…
Abstract
Purpose
This paper aims to reframe the whistleblowing process by examining the individual and situational factors that have been overlooked by prior studies. Ethical climate, public service motivation (PSM), organisation identification and psychological safety are inquired.
Design/methodology/approach
The present study sample was drawn from a population of Indonesian local governments located in east Java, Indonesia. Particularly, self-administered questionnaires were hand-distributed to the employees in the four local governments. Of 2,169 questionnaires distributed to the employees, 1,687 questionnaires were returned to the researcher. However, the researcher removed 33 returned questionnaires because of poor data quality, such as incomplete answers. Thus, only 1,654 questionnaires were analysed in this study.
Findings
The findings support the idea of an ethical climate that can encourage the individual to blow the whistle. However, its effect is indirect. The predictive power of ethical climate on the individual’s whistleblowing intentions depends on the meditating roles of PSM, psychological safety and organisation identification. Interestingly, the mediating effects of PSM, psychological safety and organisation identification are extremely acknowledged when individuals have an opportunity to choose internal or external disclosures.
Originality/value
This study produces a different approach to understanding people’s intentions to report any wrongdoings. This study is dissimilar from prior studies in terms of the theoretical paradigm and research design. Previous studies mostly used students as their experiments. In contrast, the current study recruited employees who work in local governments. This situation fundamentally affects the understanding of the impact of an ethical climate on the individual intention to blow the whistle.
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Jeffrey Lehtman and William White
The purpose of the paper is to discuss the SEC's increased willingness to pursue insider trading enforcement actions related to transactions that take place largely outside the…
Abstract
Purpose
The purpose of the paper is to discuss the SEC's increased willingness to pursue insider trading enforcement actions related to transactions that take place largely outside the USA.
Design/methodology/approach
The paper describes several recent insider trading enforcement actions with international dimensions and the substantial cross-border cooperation among different countries' securities regulators that is required for cases to be successfully investigated. The paper draws conclusions and recommends steps for firms to take including a review of policies and procedures and how the firm receives and shares information, training programs, tailored protocols for ongoing monitoring and surveillance of trading activity, and contingency plans for possible future responses to insider trading problems and cross-border regulatory investigations.
Findings
The SEC has in recent years shown an increasing willingness to pursue insider trading enforcement actions with substantial international dimensions.
Practical implications
Internationally active firms should be aware of the breadth and intensity of the SEC's focus on cross-border insider trading matters and should prepare internal blueprints for how to respond to potential insider trading issues when they arise.
Originality/value
The paper presents practical guidance from experienced financial services lawyers.
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