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Article
Publication date: 5 September 2016

Mark Srere and Jennifer Mammen

To analyze the recent Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) whistleblower awards and to evaluate what issues may be…

Abstract

Purpose

To analyze the recent Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) whistleblower awards and to evaluate what issues may be important for in-house counsel in the future.

Design/methodology/approach

The article discusses the most recent whistleblower settlements and focuses on lessons learned for compliance.

Findings

The SEC continues to publicize substantial whistleblower awards in an effort to attract additional whistleblowers and gather information that may lead to successful enforcement actions. In addition, the CFTC, whose corresponding Whistleblower Program has been slow to issue awards has announced that it is ramping up its program.

Practical implications

Companies should ensure that they have vigorous compliance programs in place to prevent and detect potential securities violations and to respond immediately in order to mitigate penalties that may result from inadvertent violations.

Originality/value

This article identifies recent awards issued under Whistleblower Programs created under the Dodd-Frank Act and should be of interest to publicly traded companies and all entities regulated by the SEC and CFTC that may be targeted by potential whistleblowers.

Details

Journal of Investment Compliance, vol. 17 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

Book part
Publication date: 16 October 2015

Steven Mintz

The Dodd-Frank Financial Reform Act sets new whistleblowing standards for internal accountants and external auditors who fail to resolve differences internally with top…

Abstract

The Dodd-Frank Financial Reform Act sets new whistleblowing standards for internal accountants and external auditors who fail to resolve differences internally with top management on financial reporting matters. Whistleblowers are eligible to receive a financial reward under Dodd-Frank if they “voluntarily” provide “original” information and meet other criteria. Interpretation 102-4 of the American Institute of Certified Public Accountants Code establishes reporting obligations for external auditors to meet the requirements of Dodd-Frank. The purpose of this paper is to critically evaluate the standards to better understand the whistleblowing process. A review of the literature identifies areas of concern in deciding whether to blow the whistle. The paper contributes to the literature by integrating thoughts, ideas, and issues raised by prior researchers and considerations specific to the whistleblowing process. The analysis results in the proposal of specific unanswered questions about the process that can guide future researchers.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78441-666-9

Keywords

Book part
Publication date: 24 October 2017

Maria A. Moore, John Huxford and Jennifer B. Bethmann

At a time when governmental corruption seems rife and administrations grow ever more secretive, the whistleblower is a crucial resource in journalism’s attempts to make…

Abstract

At a time when governmental corruption seems rife and administrations grow ever more secretive, the whistleblower is a crucial resource in journalism’s attempts to make accountable those who wield power. Yet despite legislation that is meant to protect employees and officials who expose wrongdoing, a governmental “war on whistleblowers” has made the hazards faced by many whistleblowers increasingly grim. This chapter explores the role of the journalist/whistleblower collaboration in disclosing important, but sensitive, information involving national security. In discussing case studies of those who have braved the government’s anger, we examine not only the circumstances of these breaches, but also their political and legal repercussions.

Details

Corruption, Accountability and Discretion
Type: Book
ISBN: 978-1-78743-556-8

Keywords

Abstract

Details

Corporate Fraud Exposed
Type: Book
ISBN: 978-1-78973-418-8

Book part
Publication date: 10 September 2021

Robert L. Braun, Dann G. Fisher, Amy Hageman, Shawn Mauldin and Michael K. Shaub

Given the conflicting attitudes that people have toward those who report wrongdoing and a lack of empirical research specifically examining subsequent hiring, it is an…

Abstract

Given the conflicting attitudes that people have toward those who report wrongdoing and a lack of empirical research specifically examining subsequent hiring, it is an open question as to whether accounting professionals would want to work with former whistleblowers. The authors examine this question using an experimental design, in which participants evaluate an employment candidate before and after the person discloses having been a whistleblower. Four manipulations of whistleblowing are used in both a within-subjects and a between-subjects manipulation. The authors’ results demonstrate that accounting professionals’ intentions to recommend a candidate for hire decrease after they are informed that a strong candidate has a whistleblowing past. A candidate is viewed most negatively, however, when discovering malfeasance and electing not to blow the whistle internally. Moreover, when the whistle is blown internally and the superior takes no action, the candidate who remained silent and chose not to continue to push the issue is viewed more negatively than the candidate who proceeded to blow the whistle externally. Although a candidate having a whistleblowing past appears to pose a cautionary signal in the interview process, participants reacted more harshly when the candidate failed to act or lacked the durable moral courage to see the matter through to completion.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-80071-758-9

Keywords

Article
Publication date: 28 October 2014

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…

121

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.

Details

Journal of Investment Compliance, vol. 15 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 30 September 2020

Jacob A. Young, James F. Courtney, Rebecca J. Bennett, Timothy Selwyn Ellis and Clay Posey

The purpose of this study was to investigate the impact of two-way, computer-mediated communication on investigator perceptions of whistleblower credibility.

Abstract

Purpose

The purpose of this study was to investigate the impact of two-way, computer-mediated communication on investigator perceptions of whistleblower credibility.

Design/methodology/approach

Investigators were recruited to participate in an online experiment that tasked subjects with evaluating simulated two-way, computer-mediated communication between an investigator and whistleblower. Several rival explanations were also examined to account for potential confounds.

Findings

While anonymous whistleblowers were perceived to be less credible than identified whistleblowers when reporting via one-way communication, perceived whistleblower credibility was not statistically different when using two-way communication. Further, investigators allocated statistically similar amounts to investigate anonymous and identified reports.

Research limitations/implications

Based upon the results of this study, several new research directions can be explored with respect to maintaining anonymity, assessing credibility and designing reporting systems.

Practical implications

The results support the use of anonymous, two-way communication in whistleblowing reporting systems. Anonymous whistleblowers would benefit from the ability to maintain an active dialogue with investigators without jeopardizing their safety or the investigation.

Social implications

This study provides empirical support for strengthening whistleblowing reporting channels through the adoption of anonymous, two-way, computer-mediated communication. Doing so can better preserve the anonymity of those willing to report wrongdoing and better protect them from potential retaliation.

Originality/value

This study is among the first to empirically test the longstanding theory that anonymous reports are perceived by investigators as less credible than those from identified individuals. This study is also among the first to consider and incorporate anonymous, two-way communication in whistleblowing reporting.

Details

Information Technology & People, vol. 34 no. 3
Type: Research Article
ISSN: 0959-3845

Keywords

Article
Publication date: 13 November 2017

Syamsuddin

The aim of this paper is to investigate the mediation effect of whistleblower in relationship between auditor’s ethic, auditor’s commitment and auditor’s independence to…

Abstract

Purpose

The aim of this paper is to investigate the mediation effect of whistleblower in relationship between auditor’s ethic, auditor’s commitment and auditor’s independence to audit quality – a survey on provincial audit boards in South, Central and West Sulawesi, Indonesia.

Design/methodology/approach

The population in this research were auditors of audit board, amounting to 249 people, distributed in three provinces, namely, South Sulawesi, Central Sulawesi and West Sulawesi, using purposive sampling. The method used for analyzing the data in this research is structural equation modeling with auxiliary program analysis of moment structural version 20.

Findings

The main finding of this research is that the whistleblower is not the mediation variable of the relationship between auditor’s ethic, auditor’s commitment and auditor’s independence to audit quality. However, it does not mean that auditors will be whistleblowers who will disclose all cases into the public domain. Facts on the field are that Badan Pemeriksa Keuangan Republik (BPK) or The Audit Board of the Republic of Indonesia auditors do not become whistleblowers due to unsupportive atmosphere and less response from superiors. The results support the agency theory. This research supports the agency theory because of the fact in the field that BPK auditors are not committed to be whistleblowers. Meanwhile, there is positive effect of commitment to audit quality. This research supports stewardship theory and setting theory, as BPK auditors are already committed to the organization and demonstrate high levels of participation in the organization and stronger willingness to keep working and contribute to achievement of better audit. The BPK auditors maintain their independence in the inspection, but for them to be whistleblowers to reveal findings to the public is not allowed by their superiors. The research results support the agency theory.

Research limitations/implications

Whistleblower needs special attention in BPK, as it is proven that whistleblowing system has not been implemented, and support is needed from superiors and the agencies concerned if one of the auditors in carrying out their auditing tasks turn out to be a whistleblower due to their conscience. Although whistleblower is not regulated in Inspection Standard Statement, Regulation No. 01 of 2007 on Standards of State Audit (SKPN) of BPK, BPK should accommodate the application of the whistleblowing system, such as that adopted by institutions under the Ministry of Finance (Tax Office); hence, the existence of independent auditor profession regains public trust, something that has been dropped for all this time due to many cases involving independent auditors in business sector or the government sector. The government should provide a strong legal protection to ensure the protection to whistleblowers, as the existing legislation is still general in characteristics, as outlined in Law No. 13 of 2006 on Protection of Witnesses and Victims. Furthermore, the researchers should use qualitative research to study the behavior of the government auditors; why some areas receive Wajar Tanpa Pengecualian (WTP) or unqualified opinion predicate but are coupled by a tremendous increase in corruption; and whether BPK auditors have become whistleblowers in disclosing the actual facts.

Practical implications

Whistleblower need special attention in BPK as it is proven that whistleblowing system has not been implemented, and support is needed from superiors and the agencies concerned if one of the auditors in carrying out their auditing tasks turn out to be a whistleblower due to their conscience. Although whistleblower is not regulated in Inspection Standard Statement, Regulation No. 01 of 2007 on Standards of State Audit (SKPN) of BPK, BPK should accommodate the application of the whistleblowing system, such as that adopted by institutions under the Ministry of Finance (Tax Office), hence the existence of independent auditor profession regain public trust, something that has been dropped for all this time due to many cases involving independent auditors in business sector or the government sector. The government should provide a strong legal protection to ensure the protection to whistleblowers, as the existing legislation is still general in characteristics, as outlined in Law No. 13 of 2006 on Protection of Witnesses and Victims. Furthermore, the researchers should use qualitative research to study the behavior of the government auditors; why some areas receive WTP predicate but are coupled by a tremendous increase in corruption; and whether BPK auditors have become whistleblowers in disclosing the actual facts.

Social implications

The government needs to provide a strong legal framework to ensure the protection of whistleblowers, because the existing legislation is still general as outlined in the Act – Act No. 13 of 2006 on the Protection of Witnesses and Victims.

Originality/value

The originality of this research is using the government whistleblower as the mediation variable in relationship between auditor’s ethics, auditor’s commitment and auditor’s independence on audit quality, with the object being auditor in South Sulawesi, Central Sulawesi and West Sulawesi, Indonesia.

Details

International Journal of Law and Management, vol. 59 no. 6
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 25 November 2020

Alja Poler De Zwart

To describe the new EU Whistleblowing Directive and its implications.

199

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.

Article
Publication date: 9 July 2018

Faisal Al-Haidar

This paper aims to explore the nature and the scope of whistleblowing in Kuwait and in the UK. Whistleblowing is when a person, usually an employee, in a government agency…

Abstract

Purpose

This paper aims to explore the nature and the scope of whistleblowing in Kuwait and in the UK. Whistleblowing is when a person, usually an employee, in a government agency or private enterprise, discloses information to the public or to those in authority, of mismanagement, corruption or other wrongdoing. Due to the unpredictable consequences of whistleblowing, it is probable that many employees who witness wrongdoing do not consider blowing the whistle, because they fear the impact of such action on their relationship with their employers.

Design/methodology/approach

The author evaluated the whistleblowing systems in different countries. He first tackled the nature of whistleblowing in general, proceeded to analyse whistleblowing in Kuwait with mentions from other countries and finally evaluated the whistleblowing process in the UK.

Findings

The whistleblowing situation in the UK is clearer than that in Kuwait. Recent improvements have been made in the UK to protect whistleblowers. In the UK, the whistleblowing law under the Public Interest Disclosure Act 1998 came into force in July 1999 to protect whistleblowers. Kuwait also has had some improvements, which were seen to offer legal protection for those raising concerns about corruption under Law no. 24 of 2012. However, the author recommends that the Kuwaiti Government should give more protection to whistleblowers, and there is a need to protect the whistleblowers.

Originality/value

Potential whistleblowers might feel discouraged from disclosing information against their organisation, fearing a backlash against them. This is where the law and the rights of employees must be clarified. This paper will, therefore, evaluate the system of whistleblowing in the UK under the Public Interest Disclosure Act 1998 and examine this against the whistleblowing law in Kuwait under the Whistleblowing Act no. 24 of 2012.

Details

International Journal of Law and Management, vol. 60 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

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