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Journal of Business Ethics
Published in: Journal of Business Ethics 1/2019

18-04-2017 | Original Paper

Ethical Awareness, Ethical Judgment and Whistleblowing: A Moderated Mediation Analysis

Authors: Hengky Latan, Charbel Jose Chiappetta Jabbour, Ana Beatriz Lopes de Sousa Jabbour

Published in: Journal of Business Ethics | Issue 1/2019

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Abstract

This study aims to examine the ethical decision-making (EDM) model proposed by Schwartz (J Bus Ethics, doi: 10.​1007/​s10551-015-2886-8, 2016), where we consider the factors of non-rationality and aspects that affect ethical judgments of auditors to make the decision to blow the whistle. In this paper, we argue that the intention of whistleblowing depends on ethical awareness (EAW) and ethical judgment (EJW) as well as there is a mediation–moderation due to emotion (EMT) and perceived moral intensity (PMI) of auditors. Data were collected using an online survey with 162 external auditors who worked on audit firms in Indonesia as well as 173 internal auditors working in the manufacturing and financial services. The result of multigroup analysis shows that emotion (EMT) can mediate the relationship between EAW and EJW. The nature of this relationship is more complex and then tested by adding moderating variables using consistent partial least squares approach. We found that EMT and PMI can improve the relationship between ethical judgments and whistleblowing intentions. These findings indicate that internal auditors are more likely to blow the whistle than external auditors; and reporting wrongdoing internally and anonymously are the preferred way of professional accountants to blow the whistle in Indonesia.
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Footnotes
1
Jubb (2000) gives a detailed explanation of the roles of auditors as whistleblowers.
 
2
Miceli et al. (2014) provide a detailed distinction between internal and external whistleblowers. In this paper, we use the term external whistleblower compared to the “bell-ringers” proposed by them to be more familiar.
 
3
This study provides empirical evidence of EDM theoretical models developed by Schwartz (2016). Although not all of the variables considered, this provides sufficient preliminary evidence.
 
4
Shawver et al. (2015) combine the two groups into a single dataset. This makes the results of the analysis to become inaccurate and biased.
 
5
There is a similarity between the model of Trevino (1986) and the model of Ferrell and Gresham (1985), which consider individual and situational factors. The difference is the role of both, one as a predictor and the other as moderator.
 
6
See Leys and Vandekerckhove (2014) for an explanation of the rights and duties of a whistleblower for some type of wrongdoings.
 
7
Alleyne et al. (2016) and Latan et al. (2016) have used the moral intensity as a moderating variable in research related to the whistlwblowing intentions.
 
8
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.
 
9
The use of scenarios is more effective to give stimuli to the auditor in making ethical decisions when faced with certain situations.
 
10
Dijkstra and Henseler (2015) gives a detailed explanation related to PLSc.
 
11
Conceptually, measurement invariance expresses the idea that the measurement properties of X in relation to the target latent trait Wt are the same across populations.
 
12
Cepeda et al. (2018) proposes to use a spreadsheet to calculate the indirect effects.
 
13
Lehnert et al. (2015) were surprised only two studies using qualitative approach in their meta-analysis study of the EDM.
 
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Metadata
Title
Ethical Awareness, Ethical Judgment and Whistleblowing: A Moderated Mediation Analysis
Authors
Hengky Latan
Charbel Jose Chiappetta Jabbour
Ana Beatriz Lopes de Sousa Jabbour
Publication date
18-04-2017
Publisher
Springer Netherlands
Published in
Journal of Business Ethics / Issue 1/2019
Print ISSN: 0167-4544
Electronic ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-017-3534-2

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