Effects of Advice on Auditor Whistleblowing Propensity: Do Advice Source and Advisor Reassurance Matter?

1 Pages Posted: 11 Jun 2013 Last revised: 10 Sep 2020

See all articles by El'fred Boo

El'fred Boo

Nanyang Business School, Nanyang Technological University

Terence Bu-Peow Ng

Nanyang Technological University - Division of Accounting

Premila Gowri Shankar

Nanyang Technological University (NTU) - Division of Accounting

Date Written: July 2, 2011

Abstract

We conduct an experiment to investigate the joint effects of advisor reassurance and advice source in enhancing the impact of advice on auditors’ whistleblowing propensity. Participants from a Big 4 firm assess the likelihood that a questionable act involving a superior will be reported, both before and after receiving advice. We manipulate, between-participants, the advice source (the technical department, an authoritative source vs. a colleague, a non-authoritative source) and advisor reassurance (with vs. without) on the firm’s policy on whistleblower protection, holding constant the advice recommendation. Our study is underpinned by the premise that moral agents may require an impetus to do the right thing in the form of advice whose effects may vary by its source and nature. Results are consistent with our hypothesis. Specifically, while auditors’ propensity to report a questionable act increases after receiving advice, the increase is significantly higher when the advice is received with reassurance on whistleblower protection than without reassurance, with the effect of reassurance being greater when the advice is from an authoritative source (the technical department) than from a non-authoritative source (a colleague). These results underscore the importance of advice in promoting whistleblowing and demonstrate how the impact of advice is jointly determined by its source and reassurance on whistleblower protection.

Keywords: Advice source; reassurance; questionable act reporting; whistleblowing; fraud detection

JEL Classification: M40, M42

Suggested Citation

Boo, El'fred Hian Yong and Ng, Terence Bu-Peow and Gowri Shankar, Premila, Effects of Advice on Auditor Whistleblowing Propensity: Do Advice Source and Advisor Reassurance Matter? (July 2, 2011). Available at SSRN: https://ssrn.com/abstract=1905008 or http://dx.doi.org/10.2139/ssrn.1905008

El'fred Hian Yong Boo (Contact Author)

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

Terence Bu-Peow Ng

Nanyang Technological University - Division of Accounting ( email )

S3 B2-c110 Nanyang Avenue
Singapore 639798
Singapore
+65-67906144 (Phone)

Premila Gowri Shankar

Nanyang Technological University (NTU) - Division of Accounting ( email )

Nanyang Business School
Singapore, 639798
Singapore

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