The Effect of Moral Reasoning, Retaliation and Negative Emotions on Whistleblowing of Internal Auditors
Abstract
The purpose of this study is to investigate the effect of moral reasoning, retaliation and negative emotions (guilt and shame) on the tendency of internal auditors to conduct whistleblowing. This study uses a survey method, with questionnaires distributed to 56 internal auditors working at universities in Yogyakarta. Participants were asked to rate the questionnaire with a five-point Likert scale. All the questionnaires collected were analysed using multiple regression. The results of this study prove empirically that moral reasoning and guilt have a significantly positive influence on the tendency of internal auditors to conduct whistleblowing. Meanwhile, retaliation has a significantly negative effect on the tendency of internal auditors to conduct whistleblowing, but shame does not have a significant effect on the tendency of internal auditors to conduct whistleblowing. This research is expected to provide a basis for organisations to consider establishing whistleblowing systems for fraud and wrongdoing prevention.
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References
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Baker, C. R., Cohanier, B., & Leo, N. J. (2017). Breakdowns in internal controls in bank trading information systems: The case of the fraud at Société Générale. International Journal of Accounting Information Systems, 26(June), 20–31. https://doi.org/10.1016/j.accinf.2017.06.002
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Jr, J. F. H., Black, W. C., Babin, B. J., Anderson, R. E., Black, W. C., & Anderson, R. E. (2018). Multivariate Data Analysis. https://doi.org/10.1002/9781119409137.ch4
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Liyanarachchi, G. A., & Adler, R. (2011). Accountants’ Whistle-Blowing Intentions: The Impact of Retaliation, Age, and Gender. Australian Accounting Review, 21(2), 167–182. https://doi.org/10.1111/j.1835-2561.2011.00134.x
Liyanarachchi, G., & Newdick, C. (2009). The impact of moral reasoning and retaliation on whistle-blowing: New Zealand evidence. Journal of Business Ethics, 89(1), 37–57. https://doi.org/10.1007/s10551-008-9983-x
Mesmer-Magnus, J. R., & Viswesvaran, C. (2005). Whistleblowing in organizations: An examination of correlates of whistleblowing intentions, actions, and retaliation. Journal of Business Ethics, 62(3), 277–297. https://doi.org/10.1007/s10551-005-0849-1
Miceli, M. P., & Near, J. P. (2005). Research in Personnel and Human Resources Management Article information : Research in Personnel and Human Resources Management, 34, 1–41.
Norman, C. S., Rose, A. M., & Rose, J. M. (2010). Internal audit reporting lines, fraud risk decomposition, and assessments of fraud risk. Accounting, Organizations and Society, 35(5), 546–557. https://doi.org/10.1016/j.aos.2009.12.003
Oppong, M., Owiredu, A., Abedana, V. N., & Asante, E. (2016). The Impact of Internal Control on the Performance of Faith-Based NGOs in Accra. Research Journal of Finance and Accounting, 7(12), 110–125.
PONEMON, L. A., & GABHART, D. R. L. (1990). Auditor independence judgments: A cognitive‐developmental model and experimental evidence. Contemporary Accounting Research, 7(1), 227–251. https://doi.org/10.1111/j.1911-3846.1990.tb00812.x
Rocha, E., Kleiner, B. H., & Ter Rocha, E. (2003). To Blow or Not To Blow the Whis tle? That is the Ques tion. Management Research News Managerial Auditing Journal Iss Managerial Auditing Journal, 2812(5), 80–87.
Roussy, M. (2013). Internal auditors’ roles: From watchdogs to helpers and protectors of the top manager. Critical Perspectives on Accounting, 24(7–8), 550–571. https://doi.org/10.1016/j.cpa.2013.08.004
Tangney, J. P., Stuewig, J., & Mashek, D. J. (2007). Moral Emotions and Moral Behavior. Annual Review of Psychology, 58(1), 345–372. https://doi.org/10.1146/annurev.psych.56.091103.070145
Trevino, L. K. (1986). Ethical Decision Making in Organizations: A Person-Situation Interactionist Model. Academy of Management Review, 11(3), 601–617. https://doi.org/10.5465/amr.1986.4306235
Welton, R. E., & Lagrone, R. M. (1994). Promoting the moral development of accounting graduate students: An instructional design and assessment. Accounting Education, 3(1), 35–50. https://doi.org/10.1080/09639289400000004
Baker, C. R., Cohanier, B., & Leo, N. J. (2017). Breakdowns in internal controls in bank trading information systems: The case of the fraud at Société Générale. International Journal of Accounting Information Systems, 26(June), 20–31. https://doi.org/10.1016/j.accinf.2017.06.002
Baumeister, R. F., Stillwell, A. M., & Heatherton, T. F. (1994). Guilt: An Interpersonal Approach. Psychological Bulletin, 115(2), 243–267. https://doi.org/10.1037/0033-2909.115.2.243
Berry, B. (2004). Organizational culture: A framework and strategies for facilitating employee whistleblowing. Employee Responsibilities and Rights Journal, 16(1), 1–11. https://doi.org/10.1023/B:ERRJ.0000017516.40437.b1
Bjørkelo, B., Matthiesen, & Berge, S. (2012). Preventing and dealing with retaliation against whistleblowers. Whistleblowing and Democratic Values, December 2015, 127–149.
Blenkinsopp, J., & Edwards, M. S. (2008). Chapter 8 On not blowing the whistle: quiescent silence as an emotion episode. Research on Emotion in Organizations, 4, 181–206. https://doi.org/10.1016/S1746-9791(08)04008-X
Brabeck, M. (1984). Ethical characteristics of whistle blowers. Journal of Research in Personality, 18(1), 41–53. https://doi.org/10.1016/0092-6566(84)90037-0
Cohen, T. R., Wolf, S. T., Panter, A. T., & Insko, C. A. (2011). Introducing the GASP Scale: A New Measure of Guilt and Shame Proneness. Journal of Personality and Social Psychology, 100(5), 947–966. https://doi.org/10.1037/a0022641
Emerson, T. L. N., Conroy, S. J., & Stanley, C. W. (2007). Ethical attitudes of accountants: Recent evidence from a practitioners’ survey. Journal of Business Ethics, 71(1), 73–87. https://doi.org/10.1007/s10551-006-9125-2
Everett, J., & Tremblay, M. S. (2014). Ethics and internal audit: Moral will and moral skill in a heteronomous field. Critical Perspectives on Accounting, 25(3), 181–196. https://doi.org/10.1016/j.cpa.2013.10.002
James, K. L. (2003). The effects of internal audit structure on perceived financial statement fraud prevention. Accounting Horizons, 17(4), 315–327. https://doi.org/10.2308/acch.2003.17.4.315
Jr, J. F. H., Black, W. C., Babin, B. J., Anderson, R. E., Black, W. C., & Anderson, R. E. (2018). Multivariate Data Analysis. https://doi.org/10.1002/9781119409137.ch4
Leith, K. P., & Baumeister, R. F. (1998). Empathy, Shame, Guilt, and Narratives of Interpersonal Conflicts: Guilt-Prone People Are Better at Perspective Taking. Journal of Personality, 66(1), 1–37. https://doi.org/10.1111/1467-6494.00001
Lewis, M. (2022). The Self-Conscious Emotions. 1–7.
Liyanarachchi, G. A., & Adler, R. (2011). Accountants’ Whistle-Blowing Intentions: The Impact of Retaliation, Age, and Gender. Australian Accounting Review, 21(2), 167–182. https://doi.org/10.1111/j.1835-2561.2011.00134.x
Liyanarachchi, G., & Newdick, C. (2009). The impact of moral reasoning and retaliation on whistle-blowing: New Zealand evidence. Journal of Business Ethics, 89(1), 37–57. https://doi.org/10.1007/s10551-008-9983-x
Mesmer-Magnus, J. R., & Viswesvaran, C. (2005). Whistleblowing in organizations: An examination of correlates of whistleblowing intentions, actions, and retaliation. Journal of Business Ethics, 62(3), 277–297. https://doi.org/10.1007/s10551-005-0849-1
Miceli, M. P., & Near, J. P. (2005). Research in Personnel and Human Resources Management Article information : Research in Personnel and Human Resources Management, 34, 1–41.
Norman, C. S., Rose, A. M., & Rose, J. M. (2010). Internal audit reporting lines, fraud risk decomposition, and assessments of fraud risk. Accounting, Organizations and Society, 35(5), 546–557. https://doi.org/10.1016/j.aos.2009.12.003
Oppong, M., Owiredu, A., Abedana, V. N., & Asante, E. (2016). The Impact of Internal Control on the Performance of Faith-Based NGOs in Accra. Research Journal of Finance and Accounting, 7(12), 110–125.
PONEMON, L. A., & GABHART, D. R. L. (1990). Auditor independence judgments: A cognitive‐developmental model and experimental evidence. Contemporary Accounting Research, 7(1), 227–251. https://doi.org/10.1111/j.1911-3846.1990.tb00812.x
Rocha, E., Kleiner, B. H., & Ter Rocha, E. (2003). To Blow or Not To Blow the Whis tle? That is the Ques tion. Management Research News Managerial Auditing Journal Iss Managerial Auditing Journal, 2812(5), 80–87.
Roussy, M. (2013). Internal auditors’ roles: From watchdogs to helpers and protectors of the top manager. Critical Perspectives on Accounting, 24(7–8), 550–571. https://doi.org/10.1016/j.cpa.2013.08.004
Tangney, J. P., Stuewig, J., & Mashek, D. J. (2007). Moral Emotions and Moral Behavior. Annual Review of Psychology, 58(1), 345–372. https://doi.org/10.1146/annurev.psych.56.091103.070145
Trevino, L. K. (1986). Ethical Decision Making in Organizations: A Person-Situation Interactionist Model. Academy of Management Review, 11(3), 601–617. https://doi.org/10.5465/amr.1986.4306235
Welton, R. E., & Lagrone, R. M. (1994). Promoting the moral development of accounting graduate students: An instructional design and assessment. Accounting Education, 3(1), 35–50. https://doi.org/10.1080/09639289400000004
Authors
Mukri, C., & Larasati, M. (2024). The Effect of Moral Reasoning, Retaliation and Negative Emotions on Whistleblowing of Internal Auditors. Agregat: Jurnal Ekonomi Dan Bisnis, 7(2), 131–142. https://doi.org/10.22236/agregat_vol7.i2/12728
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