Fraud Detection, Conservatism and Political Economy of Whistle-Blowing

Academic Journal of Interdisciplinary Studies 5 (3), 17-24

22 Pages Posted: 10 Nov 2016

See all articles by Peterson K Ozili

Peterson K Ozili

University of Essex - Essex Business School; Central Bank of Nigeria

Date Written: 2016

Abstract

This paper presents a discussion on whistle-blowing and take the view that whistle-blowing is an important fraud detection technique. A discussion of some factors that influence whistle-blowers’ incentive to blow the whistle or to remain silent in the face of persuasive fraud red flags, is also presented. The paper suggests that the tradeoff between the cost and benefit of whistle-blowing may compel the whistle-blower to apply some degree of conservatism in their whistle-blowing activities. Also, some discussion on how whistle-blowing might be influenced by firm-level politics, country-level political economy, firm ownership and other institutional factors is presented. Finally, although the provision of incentives can increase the appeal to encourage whistle-blowing, the appeal to blow the whistle may be weakened when the whistle-blower takes into account the larger context that influence the decision to blow the whistle or to remain silent.

Keywords: Forensic Accounting, Fraud Detection, Whistle Blowing, Politics, Conservatism, Ownership Control, Political Economy, Fraud

Suggested Citation

Ozili, Peterson Kitakogelu, Fraud Detection, Conservatism and Political Economy of Whistle-Blowing (2016). Academic Journal of Interdisciplinary Studies 5 (3), 17-24. Available at SSRN: https://ssrn.com/abstract=2867492

Peterson Kitakogelu Ozili (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Central Bank of Nigeria ( email )

Plot 33, Abubakar Tafawa Balewa Way
Central Business District, Cadastral Zone
Abuja
Nigeria

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