Whistleblowing in Audit Firms: Organizational Response and Power Distance

Posted: 15 Oct 2014

See all articles by Eileen Zalkin Taylor

Eileen Zalkin Taylor

North Carolina State University

Mary B. Curtis

University of North Texas

Date Written: 2013

Abstract

This paper investigates auditors' likelihood to report observations of colleagues' unethical behavior. We consider whether two characteristics that are particularly relevant to the audit environment, prior organizational response and power distance, affect willingness to report. Data collected from 106 senior-level auditors suggest auditors are more likely to report on their peers than on their superiors, but they are more likely to report superiors when prior organizational response is strong than when it is weak. Additionally, men appear to be relatively less sensitive to variations in power distance or prior organization response than women. Moral intensity of the case is significantly related to reporting likelihood, and power distance moderates this effect such that those who perceive this scenario to be of lower moral intensity are much more influenced by power distance than are those who perceive it to be of high moral intensity. These results contribute to the existing literature on accounting ethics, as well as inform public accounting governance policies.

Keywords: Whistleblowing, Audit, Fraud, Response

Suggested Citation

Taylor, Eileen Zalkin and Curtis, Mary B., Whistleblowing in Audit Firms: Organizational Response and Power Distance (2013). Behavioral Research in Accounting, 25(2), 21-43 (2013), Available at SSRN: https://ssrn.com/abstract=2500241

Eileen Zalkin Taylor (Contact Author)

North Carolina State University ( email )

Campus Box 8113
Nelson Hall
Raleigh, NC 27695-8113
United States
919-513-2476 (Phone)

Mary B. Curtis

University of North Texas ( email )

1155 Union Circle, #305219
Denton, TX 76203
United States
940.565.4366 (Phone)

HOME PAGE: http://www.coba.unt.edu/acct/faculty/curtis/

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