The Impact of Professional Skepticism on the Likelihood of Blowing the Whistle under Different Retaliation Conditions

• In Event: Continental Breakfast - Research and Education Forum
  In Roundtable Session: Table 16: Professional Skepticism 2

Abstract

The Sarbanes Oxley Act (SOX) of 2002 requires companies to provide whistleblowers with anonymity protection. This study investigates the effect of the retaliation level on the perception of an internal auditor blowing the whistle when presented with an accounting fraud situation as perceived by undergraduate accounting students. The study also links the likelihood of blowing the whistle on an observed classroom cheating incident with the likelihood of whistleblowing on accounting fraud. The results show that retaliation threat was negatively related to the likelihood of blowing the whistle in accounting situations but not in classroom situations. The study finally looks at the concept of professional skepticism in auditing. The results show that professional skepticism is positively related to the likelihood of blowing the whistle in accounting fraud situations but only under weak retaliation conditions.

Authors

• Rafik Z. Elias, California State University, Los Angeles

• Magdy S. Farag, California State Polytechnic University, Pomona