The Effect of Organization Type and Size on Fraud Reporting: Non-Profit Fraud Type Opens Opportunities

Abstract

Scant coverage of fraud in non-profit organizations and smaller firms exists. This occurs despite data indicating fraud prevalence at greater levels than at for-profit and larger firms. Applying a combination of stakeholder salience theory and whistleblowing theory, this paper establishes a background such comparisons. Results of a survey of 153 full-time employees from for-profit or non-profit organizations uncover differences in fraud reporting between organization types. We find a greater desire to whistleblow for those who work at for-profit organizations, especially when the organization is large or international. In contrast, international non-profit organizations from our sample demonstrated low whistleblowing intentions. Supplemental analysis suggests whistleblowing intention for asset misappropriation fraud significantly differs from financial statement fraud for those in for-profit organizations based on the size of the firm. However, no such differences exist for those in non-profits, creating opportunities for researchers to explore.