Whistle-blowing regulation: A uniform or tailored approach?

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Over one-third of corporate fraud is reported through tips: commonly referred to as whistle-blowing. Whistle-blowing protections, regulations and strategies are sporadic. While the United States has comprehensive whistle-blowing legislation, other well-developed capital markets such as Australia, Germany, the UK, and Canada have adopted less comprehensive whistle-blowing strategies and countries such as France and Sweden provide very limited legislative support for whistle-blowing (Wolfe et al., 2012). In light of the diverse strategies employed, the proposed study seeks to answer the following research question: Do countries need different legal approaches to whistle-blowing regulation or does a one size fits all approach work? This project will investigate the impact of regulatory mechanisms designed to encourage the decision to blow the whistle on the whistle-blowing or silence decision of accountants in different corporate governance systems (exit and voice systems). In particular, we will consider the impact of anti-retaliation protection and financial rewards on professional accountants intention to remain silent, to whistle-blow internally (to their employer), or externally (to the relevant government authority). Investigating each of these facets together will offer insight into the unique role of accountants in relation to the very type of fraud they are likely to discover, financial statement fraud.