Evaluating the paradox of whistleblower protections: how explicit safeguards influence reporting behavior among independent auditors

Purpose This study aims to examine the paradoxical effects of explicit whistleblower protection mechanisms on auditors’ propensity to report unethical conduct in audit firms. Specifically, it seeks to determine whether these protections, while intended to foster ethical reporting, inadvertently suppress whistleblowing due to the perceived risks to auditors’ career progression. Design/methodology/approach This study employed a rigorous experimental design. It involved 561 auditors systematically assigned to 1 of 4 distinct scenarios, each featuring varying degrees of whistleblower protection. Advanced statistical techniques, including Analysis of Variance (ANOVA) and ordered logistic regressions, were used to robustly evaluate the relationship between explicit protections and the likelihood of reporting misconduct. Findings This study uncovers a counterintuitive outcome: explicit protections, rather than encouraging whistleblowing, may diminish auditors’ willingness to report unethical behavior. The results indicate that when explicit protections are emphasized, auditors perceive more career-related risks and reduce reporting intentions. These findings underscore the necessity of a nuanced approach to developing whistleblower policies. Practical implications The findings provide actionable insights for audit firms in crafting whistleblower policies that promote ethical behavior. This study highlights the importance of designing protections to mitigate perceived career risks without unintentionally deterring whistleblowing. Originality/value This study significantly contributes to the whistleblowing literature by challenging the assumption that explicit protections invariably promote ethical reporting. It offers a novel perspective on the intricate dynamics between protective measures and auditors’ ethical decision-making, advancing our understanding of how such mechanisms function in professional practice.