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Could the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 be Helpful in Reforming Corporate America? An Investigation on Financial Bounties and Whistle-Blowing Behaviors in the Private Sector

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  • Kelly Pope
  • Chih-Chen Lee

Abstract

The purpose of this study is to investigate whether the availability of financial bounties and anonymous reporting channels impact individuals’ general reporting intentions of questionable acts and whether the availability of financial bounties will prompt people to reveal their identities. The recent passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 creates a financial bounty for whistle-blowers. In addition, SOX requires companies to provide employees with an anonymous reporting channel option. It is unclear of the effect of these provisions as they relate to whistle-blowing. Our results indicate that a financial bounty has the potential to increase participants’ propensity to report questionable acts and their willingness to reveal their identities when reporting, but the availability of an anonymous reporting channel does not affect participants’ propensity to report questionable acts. These findings could potentially help corporate management, government policy makers and accounting researchers to assess the effectiveness of their internal compliance programs and help determine if financial bounties in the private sector could encourage whistle-blowing. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Kelly Pope & Chih-Chen Lee, 2013. "Could the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 be Helpful in Reforming Corporate America? An Investigation on Financial Bounties and Whistle-Blowing Behaviors in the Priva," Journal of Business Ethics, Springer, vol. 112(4), pages 597-607, February.
    • Handle: RePEc:kap:jbuset:v:112:y:2013:i:4:p:597-607
    DOI: 10.1007/s10551-012-1560-7
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    References listed on IDEAS

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    1. Schultz, Jj & Johnson, Da & Morris, D & Dyrnes, S, 1993. "An Investigation Of The Reporting Of Questionable Acts In An International Setting," Journal of Accounting Research, Wiley Blackwell, vol. 31, pages 75-103.
    2. Alexander Dyck & Adair Morse & Luigi Zingales, 2010. "Who Blows the Whistle on Corporate Fraud?," Journal of Finance, American Finance Association, vol. 65(6), pages 2213-2253, December.
    3. Daniel Read, 2005. "Monetary incentives, what are they good for?," Journal of Economic Methodology, Taylor & Francis Journals, vol. 12(2), pages 265-276.
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    Cited by:

    1. Paul Andon & Clinton Free & Radzi Jidin & Gary S. Monroe & Michael J. Turner, 2018. "The Impact of Financial Incentives and Perceptions of Seriousness on Whistleblowing Intention," Journal of Business Ethics, Springer, vol. 151(1), pages 165-178, August.
    2. Joseph F. Brazel & Lorenzo Lucianetti & Tammie J. Schaefer, 2021. "Reporting Concerns About Earnings Quality: An Examination of Corporate Managers," Journal of Business Ethics, Springer, vol. 171(3), pages 435-457, July.
    3. Verschuuren, Pim, 2020. "Whistleblowing determinants and the effectiveness of reporting channels in the international sports sector," Sport Management Review, Elsevier, vol. 23(1), pages 142-154.
    4. Esther Pittroff, 2016. "Whistle-blowing regulation in different corporate governance systems: an analysis of the regulation approaches from the view of path dependence theory," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 20(4), pages 703-727, December.
    5. Thomas Olesen, 2022. "The Birth of an Action Repertoire: On the Origins of the Concept of Whistleblowing," Journal of Business Ethics, Springer, vol. 179(1), pages 13-24, August.
    6. El’fred Boo & Terence Ng & Premila Gowri Shankar, 2021. "Effects of Advice on Auditor Whistleblowing Propensity: Do Advice Source and Advisor Reassurance Matter?," Journal of Business Ethics, Springer, vol. 174(2), pages 387-402, November.
    7. Nadia Smaili & Paulina Arroyo, 2019. "Categorization of Whistleblowers Using the Whistleblowing Triangle," Journal of Business Ethics, Springer, vol. 157(1), pages 95-117, June.
    8. James Weber, 2015. "Identifying and Assessing Managerial Value Orientations: A Cross-Generational Replication Study of Key Organizational Decision-Makers’ Values," Journal of Business Ethics, Springer, vol. 132(3), pages 493-504, December.
    9. Lee, Gladys & Xiao, Xinning, 2018. "Whistleblowing on accounting-related misconduct: A synthesis of the literature," Journal of Accounting Literature, Elsevier, vol. 41(C), pages 22-46.

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