The Impact of Responsibility to Report and Fraud Rationalization on Internal Whistleblowing Intentions

ABSTRACT Employees who witness financial accounting fraud often describe not having responsibility for reporting fraud or rationalizations for the fraudulent activity as justifications for remaining silent. Prior research shows that an employee’s acceptance of personal responsibility to report increases their propensity to blow the whistle on misconduct. However, prior research has not addressed the impact of rationalizations for the fraud on the employee’s willingness to blow the whistle on misconduct. I predict and find, using an experiment, that perceived personal responsibility to report fraud increases internal whistleblowing intentions, but this effect is eliminated when rationalizations for the fraud are offered. This study extends existing research on personal responsibility to report by examining the interaction of personal responsibility and fraud rationalizations on internal whistleblowing intentions. Data Availability: Data are available from the author upon request. JEL Classifications: M14; M19; M40.