Determinants of whistleblowing intentions of accountants: a middle range theoretical perspective
| Date | 13 September 2022 |
| Pages | 1162-1181 |
| DOI | https://doi.org/10.1108/JFC-07-2022-0168 |
| Published date | 13 September 2022 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Octavia Ama Serwaa Otchere,Godfred Matthew Yaw Owusu,Rita Amoah Bekoe |
Determinants of whistleblowing
intentions of accountants:
a middle range
theoretical perspective
Octavia Ama Serwaa Otchere,Godfred Matthew Yaw Owusu
and Rita Amoah Bekoe
Department of Accounting, University of Ghana Business School, Legon, Ghana
Abstract
Purpose –The purpose of this study is to examine the key predictors of whistleblowing intention of
accountants withinthe organization. By relying on the benefit-to-cost differential theory,this study examines
the influence of professional skepticism, cognitive styles and perceived organizational support on
whistleblowing intentions while controlling for the effect of some demographic variables on the estimated
results. Further, the authors ascertain whether the threat of retaliation moderates the relationship between
professionalskepticism and whistleblowing intentions.
Design/methodology/approach –Data was obtained from professional accountants licensed by the
Institute of Chartered Accountants, Ghana by means of self-administered questionnaires. The partial least
square-structural equation modeling technique was used to test for the hypothesized relationships in this
study.
Findings –The results of this study suggestthe intention to report wrongdoing within the organization is
influenced by individuals’level of professional skepticism, cognitive style and the perception that they will
have the backing of theirorganization in reporting wrongdoing. Moreover,the authors also find females and
individualswho have advanced in age to have greater motivationto report wrongdoing in the organization.
Originality/value –This study contributes to whistleblowing literature by highlighting the effect of
professional skepticism on whistleblowing intentions. Also, this study provides empirical support for the
applicabilityof the benefit-to-cost differential theory to the whistleblowingliterature.
Keywords Professional skepticism, Structural equation modeling, Cognitive style,
Whistleblowing intention, Benefit-to-cost differential perspective, Retaliatory effect
Paper type Research paper
Introduction
The prevalence of financial crimes in businesses and its debilitating effect on their growth
and survival has been well documented in recent studies (Koomson et al.,2020;Ocansey,
2017). Available statistics suggests that businesses loose close to 5% of their annual
revenue; the equivalent of US$3.5tn to fraud and financial irregularities (AFCE, 2016).
In Africa, it is estimated that the continent losses about US$89bn yearly because of illicit
financial flows and theft (UNCTAD, 2020). Such fraudulent acts have not only affected the
growth potential ofotherwise vibrant businesses but also resulted in the eventual collapseof
many promising enterprises. In Ghana for instance, a total of nine commercial banks were
liquated between 2017 and 2019 in whathas been described as the banking sector clean up,
predominantly because of fraudulent and unethical conduct of key personnelof these banks
(Bank of Ghana, 2019).
JFC
30,5
1162
Journalof Financial Crime
Vol.30 No. 5, 2023
pp. 1162-1181
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2022-0168
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
While the literature on the dominant factors that account for these fraudulent acts is
extensive (Andon et al., 2018;Gao and Brink, 2017;Kamarunzaman et al., 2014;Koomson et al.,
2020;Owusu et al., 2020;Zahari et al., 2020), the continuous rise in reported cases of fraud
perpetuated against businesses has brought to the fore the need to critically examine the
activities of some key personnel such as the accountant whose functions have direct
implications on fraud prevention and detection. In their line of duty, accountants are required
to act professionally and have the onerous responsibility to safeguard the business assets at
all material times. For instance, before any form of payment is effected, an accountant is
required to exercise due diligence by ensuring that the relevant documentations are verified
and in case of procurement ensure that the right specification and quantities have been
supplied.
While the performance of this role is critical in preventing or minimizing the occurrence
of fraud, it is also the sacred dutyof the accountant to report any wrongdoings, misconducts
and fraudulent activities that come to his/her attention. Indeed, prior studies (Owusu et al.,
2020;Smaili and Arroyo, 2017) consider the later role to be a more potent way of dealing
with the fraud menace at the workplace, given that individuals with criminal motives may
find ways to engage in fraudulent acts no matter how robust the preventive mechanisms
may be. This in part explains the surge in research focus on whistleblowing in the past
decade.
Notwithstanding the fact that the importanceof whistleblowing has been highlightedby
many existing studies (Farag and Elias, 2016;Fatoki, 2013; Nayıret al., 2016; Owusu et al.,
2020), extant studies have also shown that professional accountants practicing with
auditing firms do not always report on colleagues or clients who commit wrongdoing in
clear contravention of their professional codes of conduct (Alleyne et al., 2013;Kaplan and
Whitecotton, 2001). Examining the specific factors that influence the willingness or
unwillingness to report wrongdoings has become a focal point in the whistleblowing
literature. Empirically, studies have associated some personal factors, such as personality
traits, moral courage, personal cost, individual cultural orientation, personal values (Brink
et al., 2015;Cho and Song, 2015;Nayirand Herzig, 2012;Park et al.,2008;Watts and Buckley,
2017), and demographic factors,like gender, age, marital status, job position among others,
with whistleblowing behavior. Other studies have examined organizational factors such
organizational justice, organizational commitment, compliance measures, supervisor
support, ethical climate,adequacy of reporting channels (Albrecht et al.,2018;Chen and Lai,
2014;Hayes et al., 2021;Mesmer-magnus and Viswesvaran, 2005;Potipiroon and
Wongpreedee, 2021;Seifert et al.,2014;Sowmya and Rajashekar, 2014) as well as cost
benefit factors like legal protection, fear of retaliation, reward and fear of reprisal
(Cassematis and Wortley, 2013;Dhamija and Rai, 2018;Hardi et al.,2020;Keil et al.,2010;
Zakaria et al., 2016)on whistleblowing behavior.
The current study contributes to the literature on whistleblowing determinants by
examining the effect of professional skepticism on the willingness to engage in
whistleblowing by the accountant. Professional skepticism is conceptualized to mean the
tendency of an individual to defer drawing of conclusions until evidence gathered provides
sufficient support for onealternative or explanation over another (Hurtt et al.,2013). While it
may be argued that accountantswho engage in whistleblowing are likely to do sowithin the
firm they work for and, hence, professional skepticism may not be a trait that will directly
impact on their whistleblowing behavior, we argue that skeptical traits, such as a
questioning mindset, may increase the likelihood of whistleblowing by an accountant. The
argument is that reporting wrongdoing in any form is a complex decision and, hence, will
require careful consideration and judgment on the part of the whistleblower. Moreover,
Intentions of
accountants
1163
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