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‘Whistleblowing Triangle’: Framework and Empirical Evidence

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Abstract

This work empirically tests the concept of the ‘whistleblowing triangle,’ which is modeled on the three factors encapsulated by the fraud triangle (pressure or financial incentives, opportunity and rationalization), in the Indonesian context. Anchored in the proposition of an original research framework on the whistleblowing triangle and derived hypotheses, this work aims to expand the body of knowledge on this topic by providing empirical evidence. The sample used is taken from audit firms affiliated with both the big 4 and non-big 4 companies operating in Indonesia. The results of analysis using the PLS-PM method found a significant relationship between the components of the whistleblowing triangle and the intention of blowing the whistle. We found that financial incentives are the most significant predictor of auditors’ intention to blow the whistle in Indonesia. Other components, such as opportunity and rationalization, also play an important role in supporting auditors’ intention to blow the whistle. Our findings also suggest that related pressures are the top priority for audit firms in Indonesia to consider in increasing whistleblowing intention. We expand the previous literature on whistleblowing which has been derived from the components of the fraud triangle (Brown et al. in Account Public Interest 16(1):28–56, 2016; Smaili and Arroyo in J Bus Ethics, https://doi.org/10.1007/s10551-017-3663-7, 2017) by adding empirical evidence.

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Notes

  1. Vandekerckhove (2006) describes the whistleblowing system in several other countries, such as the USA, Australia, New Zealand, UK, South Africa, Japan, Belgium and Germany.

  2. Social desirability response bias is broadly understood as the tendency of individuals to deny socially undesirable traits and behaviors and to admit to socially desirable ones.

  3. The MLMV approach has several advantages compared to other techniques. To use this approach, the indicators should be included in the initial data collection.

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Authors and Affiliations

  1. Department of Accounting, STIE Bank BPD Jateng, Jl. Pemuda No 4 A, Semarang, 50139, Indonesia

    Hengky Latan

  2. HLC Consulting, Jl. Kertanegara Selatan V No. 5B, Semarang, 50241, Indonesia

    Hengky Latan

  3. Montpellier Business School, Montpellier Research in Management, 2300, Avenue des Moulins, 34185, Montpellier, Cédex 4, France

    Charbel Jose Chiappetta Jabbour & Ana Beatriz Lopes de Sousa Jabbour

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  1. Hengky Latan
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  2. Charbel Jose Chiappetta Jabbour
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Latan, H., Chiappetta Jabbour, C.J. & Lopes de Sousa Jabbour, A.B. ‘Whistleblowing Triangle’: Framework and Empirical Evidence. J Bus Ethics 160, 189–204 (2019). https://doi.org/10.1007/s10551-018-3862-x

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