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    The influence of organizational justice on accountant...
    research summary posted October 20, 2015 by Jennifer M Mueller-Phillips, tagged 14.0 Corporate Matters, 14.02 Corporate Whistle Blowers 
    The influence of organizational justice on accountant whistleblowing.
    Practical Implications:

    This research study makes important contributions to the literature and has implications for management intent on designing structural mechanisms that are effective in promoting whistleblowing. First, the results suggest that whistleblowing policies and procedures, as well as related supervisor exchanges with employees, that are consistent with the dimensions of organizational justice may positively impact the likelihood that organizational accountants will report potential incidents of financial statement fraud. Second, the authors limited the sample to management accountants and internal auditors because these are the organizational accountants who are likely to have early knowledge of financial statement fraud, and minimizing the costs of financial statement fraud requires timely disclosure. Organizational accountants can effectively act as corporate fraud sentinels, and the results of this study contribute to the understanding of how accountants may be motivated to disclose fraud. Third, by framing the discussion under the rewards, anti-retaliation, and structural legislative models, the authors provide accounting researchers with a framework for guiding their thinking about whistleblowing.


    Seifert, D. L., J. T. Sweeney, J. Joireman, and J. M. Thornton. 2010. The influence of organizational justice on accountant whistleblowing. Accounting, Organizations & Society 35 (7): 707-717.

    organizational justice, whistleblowing, whistleblowers, business ethics, internal auditors, financial statements, distributive justice
    Purpose of the Study:

    In the preceding decade, the enormous economic and social costs of financial statement fraud has shaken markets, devastated investment portfolios, and reduced confidence in financial reporting. Many of these frauds were revealed not by external auditors or analysts, but by the disclosures of employees who were privy to accounting information. As a consequence, regulators worldwide have recognized the importance of whistleblowing in both deterring and detecting financial malfeasance, and have instituted legislation intended to promote employee reporting of corporate fraud.

    A core assumption of much of this legislation, such as the Sarbanes-Oxley Act in the United States, is that well-designed structural mechanisms can be influential in motivating whistleblowing. The authors test this proposition by applying the tenets of organizational justice to the construction of whistleblowing policies and procedures. In a between-subjects experiment, the authors manipulate two levels (high/low) of the procedural, interactional, and distributive fairness dimensions of organizational whistleblowing across eight case scenarios involving financial statement fraud.

    Design/Method/ Approach:

    The final sample of 447 subjects represents 17% of the experimental instruments distributed to IIA and IMA chapters in the United States. The final sample consists of 232 internal auditors and 215 management accountants. The internal auditor group averaging 19 years of professional work experience, and the management accountants’ averaging almost 21 years. Over 58% of the participants were in either supervisory, management, or executive positions. 49% reported that they had previously disclosed some type of wrongdoing within their organization. This data was gathered prior to 2010.


    The results indicate that when organizational policies and procedures for whistleblowing are designed to incorporate the dimensions of fairness or justice, organizational accountants perceive a higher likelihood that financial statement fraud will be disclosed by a whistleblower. The authors found that higher levels of procedural justice, interactional justice, and distributive justice each significantly increase the perceived likelihood of whistleblowing. The results also reveal a main effect for gender, with female organizational accountants perceiving a higher likelihood of employee disclosure of financial statement fraud.

    The results of the study are important because they suggest that management can take actions that may positively impact the likelihood that organizational accountants will report financial statement fraud. The results of this study indicate that fair policies and procedures may increase the likelihood of whistleblowing; however, the establishment of formal mechanisms for reporting misconduct does not guarantee an environment that encourages whistleblowing. To be effective in promoting whistleblowing, the results indicate that employees must perceive that the procedures in place are fair and reasonable, that management is supportive of whistleblowing, and that management will take appropriate action in resolving the alleged misconduct.

    Corporate Matters
    Corporate Whistle Blowers