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Ethical Awareness, Ethical Judgment and Whistleblowing: A Moderated Mediation Analysis

Author

Listed:
  • Hengky Latan

    (STIE Bank BPD Jateng
    HLC Consulting)

  • Charbel Jose Chiappetta Jabbour

    (University of Stirling)

  • Ana Beatriz Lopes de Sousa Jabbour

    (University of Strathclyde)

Abstract

This study aims to examine the ethical decision-making (EDM) model proposed by Schwartz (J Bus Ethics, doi: 10.1007/s10551-015-2886-8 , 2016), where we consider the factors of non-rationality and aspects that affect ethical judgments of auditors to make the decision to blow the whistle. In this paper, we argue that the intention of whistleblowing depends on ethical awareness (EAW) and ethical judgment (EJW) as well as there is a mediation–moderation due to emotion (EMT) and perceived moral intensity (PMI) of auditors. Data were collected using an online survey with 162 external auditors who worked on audit firms in Indonesia as well as 173 internal auditors working in the manufacturing and financial services. The result of multigroup analysis shows that emotion (EMT) can mediate the relationship between EAW and EJW. The nature of this relationship is more complex and then tested by adding moderating variables using consistent partial least squares approach. We found that EMT and PMI can improve the relationship between ethical judgments and whistleblowing intentions. These findings indicate that internal auditors are more likely to blow the whistle than external auditors; and reporting wrongdoing internally and anonymously are the preferred way of professional accountants to blow the whistle in Indonesia.

Suggested Citation

  • Hengky Latan & Charbel Jose Chiappetta Jabbour & Ana Beatriz Lopes de Sousa Jabbour, 2019. "Ethical Awareness, Ethical Judgment and Whistleblowing: A Moderated Mediation Analysis," Journal of Business Ethics, Springer, vol. 155(1), pages 289-304, March.
    • Handle: RePEc:kap:jbuset:v:155:y:2019:i:1:d:10.1007_s10551-017-3534-2
    DOI: 10.1007/s10551-017-3534-2
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    References listed on IDEAS

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    7. Hengky Latan & Charbel Jose Chiappetta Jabbour & Ana Beatriz Lopes de Sousa Jabbour, 2021. "To Blow or Not to Blow the Whistle: The Role of Rationalization in the Perceived Seriousness of Threats and Wrongdoing," Journal of Business Ethics, Springer, vol. 169(3), pages 517-535, March.
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