The Effect of the Dodd-Frank Act on Corporate Whistleblowing

• In Event: Public Interest

Abstract

The Sarbanes-Oxley Act of 2002 introduced anti-retaliation protection to corporate whistleblowers. The discussion of whistleblower incentives was again revisited in 2008 with the passage of the Dodd-Frank Act. The new legislation contains strengthened anti-retaliation protection as well as the introduction of a reward incentive. This study evaluates the effects of key factors such as anonymity, anti-retaliation protection, and reward incentive. Findings suggest that while anti-retaliation protection and reward incentive do not have a main effect on reporting intentions, perceived benefit and perceived cost serve to mediate their effect on reporting intentions. In addition, findings suggest strengthened anti-retaliation protection increases perceived cost while reward incentive reduces both perceived benefit and perceived cost. These findings are contrary to expectations as strengthened anti-retaliation protection and reward incentive are the two key components of the new whistleblower legislation.

Author

• Aaron Wilson, Ohio University