The role of power in financial statement fraud schemes

In this paper, we investigate a large-scale financial statement fraud to better understand the process by which individuals are recruited to participate in financial statement fraud schemes. The case reveals that perpetrators often use power to recruit others to participate in fraudulent acts. To illustrate how power is used, we propose a model, based upon the classical French and Raven taxonomy of power, that explains how one individual influences another individual to participate in financial statement fraud. We also provide propositions for future research

Whistleblowing as a protracted process: a study of UK whistleblower journeys

This paper provides an exploration of whistleblowing as a protracted process, using secondary da-ta from 868 cases from a whistleblower advice line in the UK. Previous research on whistleblow-ing has mainly studied this phenomenon as a one-off decision by someone perceiving wrongdoing within an organisation to raise a concern or to remain silent. Earlier suggestions that whistleblowing is a process and that people find themselves inadvertently turned into whistleblowers by management responses, has not been followed up by a systematic study tracking the path of how a concern is repeatedly raised by whistleblowers. This paper provides a quantitative exploration of whistleblowing as a protracted process, rather than a one-off decision. Our research finds that the whistleblowing process generally entails two or even three internal at-tempts to raise a concern before an external attempt is made, if it is made at all. We also find that it is necessary to distinguish further between different internal (e.g. line manager, higher management, specialist channels) as well as external whistleblowing recipients (e.g. regulators, professional bodies, journalists). Our findings suggest that whistleblowing is a protracted process and that this process is internally more protracted than previously documented. The overall pattern is that whistleblowers tend to search for a more independent recipient at each successive attempt to raise their concern. Formal whistleblower power seems to determine which of the available recipients are perceived as viable, and also what the initial responses are in terms of retaliation and effectiveness

Laddered motivations of external whistleblowers: The truth about attributes, consequences, and values

The purpose of this study was to explore the motivational structures of external whistleblowers involved in the decision to blow the whistle by applying MEC theory and the laddering technique. Using both soft and hard laddering methods, data were collected from 37 Korean external whistleblowers. Results revealed that the means-end chain of external whistleblow-ers was the hierarchical linkage among two concrete attributes (the power of external whistleblowing to make changes and its warning about the seriousness of wrongdoing to the public), two functional consequences (correcting a wrongdoing and making those who violated laws admit their offenses), and one terminal value (the truth). The extant whistleblowing literature has either made assumptions about whistleblowers’ motivations when developing models or has drawn indirect inferences from measures of other variables. Our study is the first with an explicit and empirical focus on whistleblowers’ motivations. The findings provide evidence of the motivational structures of external whistleblowers that consist of a set of complex paths linked by multi-layered motivators. This research will be helpful in designing and reviewing whistleblowing programs for organizations, regulatory agencies, and journalists