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Evidence on the Use and Efficacy of Internal Whistleblowing Systems
Author(s) -
STUBBEN STEPHEN R.,
WELCH KYLE T.
Publication year - 2020
Publication title -
journal of accounting research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 6.767
H-Index - 141
eISSN - 1475-679X
pISSN - 0021-8456
DOI - 10.1111/1475-679x.12303
Subject(s) - business , accounting , volume (thermodynamics) , internal audit , government (linguistics) , descriptive statistics , set (abstract data type) , operations management , actuarial science , audit , computer science , statistics , economics , mathematics , linguistics , philosophy , physics , quantum mechanics , programming language
Using a proprietary data set from a provider of internal whistleblowing (WB) systems, we analyze nearly two million internal WB reports submitted to over 1,000 publicly traded U.S. firms. We provide descriptive statistics, over time and across report types, on the amount and summary details of information provided, how extensively management reviews reports, the amount of time until reviews were completed, and the outcome of these reviews. Further, we examine the characteristics of firms with more actively used systems (i.e., a higher volume of reports, more information provided in reports, and reports that are more frequently reviewed by management). Finally, we show that internal WB report volume is associated with fewer and lower amounts of government fines and material lawsuits.