Are Secondhand Internal Whistleblowing Reports Credible?

30 Pages Posted: 8 Nov 2019

See all articles by Stephen Stubben

Stephen Stubben

University of Utah

Kyle Welch

George Washington University; George Washington University - Department of Accountancy

Date Written: October 29, 2019

Abstract

This study examines the characteristics, credibility, and value of internal whistleblowing reports based on secondhand information. We analyze over two million reports submitted to over one thousand publicly traded U.S. firms between 2004 and 2017 and find that claims in secondhand reports are 47.7% more likely than firsthand reports to be substantiated by management, which suggests that management views many secondhand reports as credible. Further, we find negative associations between the number of secondhand reports and negative outcomes including lawsuits and government fines. These findings are consistent with secondhand reports providing valuable information that allows management to identify and address issues before they become more costly to the firm.

Keywords: whistleblowing, employee hotlines, secondhand information

JEL Classification: G34, G38, J53, J88, M54

Suggested Citation

Stubben, Stephen and Welch, Kyle, Are Secondhand Internal Whistleblowing Reports Credible? (October 29, 2019). Available at SSRN: https://ssrn.com/abstract=3477551 or http://dx.doi.org/10.2139/ssrn.3477551

Stephen Stubben (Contact Author)

University of Utah ( email )

1655 E. Campus Center
Salt Lake City, UT 84112
United States

Kyle Welch

George Washington University ( email )

School of Business and Public Management
Washington, DC 20052
United States

HOME PAGE: http://https://business.gwu.edu/kyle-welch

George Washington University - Department of Accountancy ( email )

School of Business and Public Management
Washington, DC 20052
United States

HOME PAGE: http://https://business.gwu.edu/kyle-welch

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