Whistleblowers and their moral compass: designing a management control system operating as a package to provide the roadmap to future business integrity.

01 November 2022 → 31 October 2024
Research Foundation - Flanders (FWO)
Research disciplines
  • Social sciences
    • Accounting and auditing
Whistleblowing Internal auditing Management control
Project description

The Association of Certified Fraud Examiners estimates that organizations annually lose up to 5 percent of their revenue to fraud. However, to date, much of the observed misconduct still goes unreported. Our mission is to decrease the number of non-reporting observers by designing tailor-made whistleblowing policies. Specifically, we will look at (1) how financial incentive framing influences employee whistleblowing when an internal audit process is absent versus present, (2) how incentive practices influence internal auditor whistleblowing when role duality is absent versus present and (3) how management control system practices impact employee whistleblowing when the slippery slope is absent versus present. By conducting experimental research in all three studies, we are able to conclude on causal relationships between incentives, organizational characteristics and whistleblowing behavior. As such, we will contribute to the accounting literature in general, and more specifically, to the literature on whistleblowing, auditing and management control. Additionally, our research has important implications for (1) practitioners who are responsible for designing internal whistleblowing policies as well as (2) external auditors who foresee to rely upon reports established by internal auditors.