Abstract
This study aims to determine the effect of financial rewards (given and not given), personal costs (low and high) and reporting channels (anonymous and non-anonymous) on whistleblowing intentions. This study also analyzes the interaction effects among financial reward and personal cost, financial reward and reporting channel as well as personal cost and reporting channel on whistleblowing intentions. Participants in this study involve 65 finance and accounting employees of state universities in Bali. This research employs a 2x2x2 experimental design. The results of this study indicate that whistleblowing intentions are greater when given financial rewards compared to not given financial rewards, in low personal cost compared with a high personal cost, reported through anonymous reporting channels than in non-anonymous reporting channels. The results of the interaction effect indicate that greater whistleblowing occurs when given a financial reward (case at a low personal cost), through non-anonymous reporting channels. The results also confirm that higher whistleblowing intentions appear in a low personal cost through anonym reporting channels.
Highlights
In ACFE Indonesia (2016) conducted a fraud survey in Indonesia, emphasizing that tipping contributed to higher fraud in Indonesia (37%)
This paper presents the result of experimental study about the effect of financial reward, personal cost and reporting channels on whistleblowing intention
We find that whistleblowing intentions are greater when given financial, in low personal cost compared with high personal cost, reported through anonymous reporting channels than in non-anonymous reporting channels
Summary
In ACFE Indonesia (2016) conducted a fraud survey in Indonesia, emphasizing that tipping contributed to higher fraud in Indonesia (37%). Such finding postulated that whistleblowing serves as a good fraud detection method. Research conducted by James et al (1995) stated that almost one-sixth whistleblowers who received negative consequences from their actions were reluctant to conduct any whistleblowing. Whistleblowers (90%) who did not receive negative consequences of their actions, mentioned about future possibility to commit whistleblowing. Relevant study has suggested that retaliation is believed to reduce whistleblowing intentions; even such effort could hamper fraud detection and eradication in Indonesia
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