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1. Int. J. Business Governance and Ethics, Vol. 12, No. 4, 2017 349
Copyright © 2017 Inderscience Enterprises Ltd.
A study of accountants’ whistle-blowing intention:
evidence from Iran
Mohammad Namazi and Fahime Ebrahimi*
Shiraz University,
Shiraz, Postcode 71946-85111, Iran
Fax: +98-71-36460520
Email: mnamazi@rose.shirazu.ac.ir
Email: f_ebrahimi596@yahoo.com
*Corresponding author
Abstract: The present research is aimed at identifying the most important
variables affecting whistle-blowing and prioritise them in the intention of
internal reporting of frauds in the financial statements by accountants. For this
purpose, the effect of organisational justice, attitude toward whistle-blowing,
personal cost of reporting, proactive personality traits, religiosity and moral
intensity are studied. This research is based on a survey research and the
statistical population of the study consists of the accountants of the 400
companies listed on the Tehran Stock Exchange in 2015. The hypotheses were
tested using OLS regression and the results indicate that among preceding
factors, only organisational justice, attitude toward whistle-blowing, religiosity
and moral intensity have positive and significant effects on the intention of
reporting fraud. The results of prioritising effective factors of whistle-blowing
intentions show that organisational justice, religiosity and then gender have the
most impact on the intention to whistle-blow in financial statements.
Keywords: internal whistle-blowing; organisational justice; proactive
personality trait; religiosity; moral intensity; accountants in Iran; Iran.
Reference to this paper should be made as follows: Namazi, M. and
Ebrahimi, F. (2017) ‘A study of accountants’ whistle-blowing intention:
evidence from Iran’, Int. J. Business Governance and Ethics, Vol. 12, No. 4,
pp.349–373.
Biographical notes: Mohammad Namazi (PhD, ICPA, CMA) is the first
Professor of Accounting (after Islamic revolution) in Iran who is teaching at
Shiraz University. He holds a BS in Banking from Iran, an MBA (with
concentration in Accounting) from California and a PhD in Accounting from
the University of Nebraska (Lincoln). He has served as a faculty member at the
University of Nebraska and as an Assistant Professor at the Pennsylvania State
University. He is the author and translator of more than 12 national and
international books and monographs. He has served as the editor of several
journals. He has also published more than 150 professional articles. He has also
served in different positions including Vice-Chancellor of Administrative and
Finance and the Dean of the College of Social Sciences and Humanities of
Shiraz University. He has conducted several national and international research
projects and has extensive practical experience in different aspects of
accounting.
Fahime Ebrahimi is a PhD graduate in Accounting from Shiraz University. She
acquired her Bachelor’s and Master’s in Accounting from the Shiraz University
in 2009 and 2011, respectively. Her research is published in various national

2. 350 M. Namazi and F. Ebrahimi
and international journals and she has worked as a Lecturer at the Accounting
Department of a variety of universities. Her research interests include ethics in
accounting.
1 Introduction
The numerous large-scale corporate scandals (e.g., Enron, Tyco and WorldCom) have
had a devastating impact on a wide range of individual investors, employees, creditors
and other market stakeholders and have constituted a great degree of fraud. In 2004, the
Association of Certified Fraud Examiners (ACFE) announced that 6% of the income of
American companies was lost to fraud, which resulted in a $660 billion reduction in gross
domestic product (GDP) (Seifert, 2006). Apart from the obvious costs, these fraudulent
activities jeopardise the health, welfare and security of organisation members, customers
and, in general, society. The loss incurred by major frauds automatically affects the entire
economy, down to its macroeconomic variables and consequently each and every
member of society is affected. Furthermore, the psyche of society is affected by the
occurrence of major frauds. Therefore, because of the extent of the adverse effects and
high costs of fraud, it is of paramount importance to discover it.
Undoubtedly, scandals in the beginning of the third millennium were so shocking and
catastrophic that accountants and auditors will forever remember the millennium’s early
years and the professional scandals that occurred. However, what reduced to a certain
extent the heaviness of such scandals for the profession of accounting was the heroic
report by three women (Sherron Watkins, CPA and vice president of corporate
development at the Enron Corporation; Cynthia Cooper, CPA and vice president of
internal auditor at WorldCom; Coleen Rowley, American former FBI agent). They were
subsequently chosen as Time magazine’s Persons of the Year 2002 and were treated as
international heroines because whistle-blowing by employees then enjoyed public
popularity more than ever. Regulators worldwide have recognised the importance of
whistle-blowing in the deterrence and detection of fiscal malfeasance and have instituted
legislation intended to promote employees’ reporting of corporate fraud. According to
Section 302 of the SOX Act, “Each audit committee shall establish procedures for the
confidential, anonymous submission by employees of the issuer of concerns regarding
questionable accounting or auditing matters.” Section 806 of the Act also states that “...no
publicly traded company, or any officer, employee, contractor, subcontractor or agent of
such company may discharge, demote, suspend, threaten, harass, or in any other manner
discriminate against an employee in the terms and conditions of employment because of
any lawful act done by the employee.” The newly added Section 18 U.S.C. 1513(e)
makes it a criminal offense to retaliate against whistle-blowers, carrying penalties of ten
years in prison. The examination of reports given by the Association of Certified Fraud
Examiners (ACFE, 2010) also indicates that most cases of fraud discovery in companies
occur through whistle-blowing by employees. Therefore, whistle-blowing by employees
is considered an internal control mechanism and the accounting profession and other
regulatory bodies are calling for “whistle-blowing to be a prominent part of
organisational culture” [Alleyne et al., (2013), p.10] and encourages employees to serve
as “internal monitors of their companies” [Brennan and Kelly, (2007), p. 61]. However, a
question arises in that regard: Why will some observers of fraud blow the whistle and

3. A study of accountants’ whistle-blowing intention 351
others ignore it? What motivates whistle-blowers to risk their careers? The response to
these questions, particularly in the profession of accounting, which seeks to revive the
missing confidence of society and the improvement of public imagination, is very
important. For example, with Enron’s collapse, which resulted in the end of the auditing
firm Arthur Andersen, one must ask why none of the auditors at Arthur Andersen or none
of the other accountants of Enron Corporation reported the occurrence of major frauds in
the financial statements?
Whistle-blowing has enormous potential as a mechanism for exposing and controlling
organisational misconduct. The extant studies in this sphere, however, indicate that some
cost and benefits are involved in the whistle-blowing decisions (Brody et al., 1999;
Miethe and Rothschild, 1994). A person might commit whistle-blowing when:
a the harm of the fraud to the organisation, other people and society is felt or realised
by him or her
b attention, fame, promotion and monetary reward are part of the individual’s goals.
A whistle-blower may feel threatened with losing his or her job or other forms of
retaliation. In these situations, the risk of blowing the whistle is greater than its benefits
(Hwang et al., 2008). Previous studies (Brennan and Kelly, 2007; Alleyne et al., 2013)
have also shown that the decision in regard to whistle-blowing is difficult and subject to
various organisational, personal and situational factors.
Based on the preceding points and considering the importance of whistle-blowing by
employees as part of the internal control system (Brennan and Kelly, 2007), a pertinent
inquiry is this:
• What factors result in whistle-blowing by accountants?
• What induces them to commit the whistle blowing?
Despite the importance of whistle-blowing in achieving organisational effective controls
and preventing fraud, (Hooks et al., 1994; Seifert et al., 2010), these issues have been
rarely discussed in the accounting literature and have not been not been discussed in
research studies related to accounting literatures of Iran at all. In effect, the preceding
inquires and also peculiarities of organisational and personal characteristic of the
employees required for whistle blowing are unexplored. The major incentive of this study
is to respond to the preceding issues in whistle- blowing. The importance of this study
lays on the fact that research that examines the predictors of whistle-blowing can extract
significant organisational and personal factors and encourage whistle-blowing. For
example, if certain types of accountants’ characteristics, such as gender or experience of
service, are associated with reluctance to blowing the whistle, employers may be able to
direct special efforts to encourage these employees to come forward (Miceli and Near,
1988). Moreover, no understanding of the relative role of these factors will make it
difficult, if not impossible, to improve the reporting behaviour of the accountants. For
example, the organisational response would be very different if accountants were
reluctant to blow the whistle because of a perception that the personal costs are very high,
as opposed to a belief that they have no personal responsibility for reporting [Kaplan and
Whitecottonan, (2001), p.46]. Hence, exploring the significant imputes that would lead to
whistle-blowing in an organisation, would provide a solid basis for understanding the
structure of the whistle-blowing system, [Bhal and Dandhich, (2011), p.485], particularly

4. 352 M. Namazi and F. Ebrahimi
in Iran. Therefore, in this research the factors that affect the accountants’ intentions of
reporting fraud in financial statements are identified for the first time in Iran and then
prioritise them. Dealing with this issue can also result in significant outcomes for the
maintenance of organisational financial health, prevention of fraud and embezzlement,
reinforcement of companies’ internal control systems, increase in the social
responsibilities of accountants and upgrade of the status of the profession of accounting
in society. It may also empirically reveal the difference between the statuses of
whistle-blowing in a developing country as opposed to developed countries.
The paper is organised as follows: first the theoretical development and literature
reviews of this subject are presented in Section 2. Then the hypotheses and research
method are explained in Sections 3 and 4, respectively. The research variables and
findings are analysed in Sections 5 and 6, respectively. Sections 7 to 9 are devoted to the
discussions and conclusions, suggestions and limitations of the study accordingly.
2 Theoretical development
2.1 Whistle-blowing
A growing body of literature on ‘whistle-blowing’ began to emerge [Keil et al., (2010),
p.789] in the 1980s and researchers have defined this term in different ways. For
example, Near and Miceli (1985, p.4) define whistle-blowing as “the disclosure by
organisation members of illegal, immoral, or illegitimate practices under the control of
their employers, to persons or organisations that may be able to effect action.”
Whistle-blowing can be exercised for people both inside and outside an organisation;
on this account, it is classified into two types, internal and external. Researchers (Seifert,
2006; MacGregor and Stuebs, 2014) contend that internal whistle-blowing is preferred
because it allows the organisation to deal with the matters domestically and efficiently
before they are made public, resulting in the promotion of corporate governance by
paving the way for eliminating fraud internally. Furthermore, the Sarbanes-Oxley Act of
2002 creates a strong impetus for internally reporting wrongdoing by mandating that
public-held companies develop anonymous, internal whistle-blowing channels (Sarbanes-
Oxley Act, 2002). Near and Miceli (1995) also maintain that managers prefer the use of
internal routes of whistle-blowing by reporters to the use of external routes.
Given the points discussed, which mostly suggest the preference of internal whistle-
blowing to external ones, the present study examines the internal whistle-blowing in
financial statements in accordance with previous studies (Kaplan et al., 2009; Seifert
et al., 2010; Dalton and Radtke, 2013). This approach is selected because whistle-
blowing, as a corporate governance mechanism, can play important roles in minimising
agency problems and there is no other mechanism which would be more effective in
ending an ongoing fraud than the whistle-blowing (Macgregor and Stuebs, 2014).
2.2 Prior studies
Until now, there has been no empirical research about whistle-blowing by accountants
and auditors in Iran. In other countries, some models and theories have been presented by
researchers. For example, Near and Miceli (1985) stated that whistle-blowing represents
a process and investigated the effective factors of whistle-blowing and its consequences.

5. A study of accountants’ whistle-blowing intention 353
Based on this model, whistle-blowing comprised four elements: The whistle-blower, the
whistle-blowing act, the complaint receiver and the organisation. According to them,
because whistle-blowing involves the use of power in organisations and persons’
motivations to make whistle-blowing attempts, theories of power, dependency and
motivation are appropriate. Loeb and Cory (1989) represented a framework for whistle-
blowing by management accountants. They suggested a three-step whistle-blowing
process that management accountants could use when faced with a conflict between a
proposed or an existing policy, action, or directive of an employer and professional
standards. The Discretionary Reporting model of Graham (1986) and Schultz et al.
(1993) proposed a negative relationship between the likelihood of reporting and personal
cost of reporting and a positive relationship between reporting and both the seriousness of
the wrongdoing and the observer’s attribution of personal responsibility to report.
Jones (1991) criticised ethical decision-making models because they failed to
consider ethical issue-related values and he introduced a moral intensity construct model
in decision-making studies. He proposed six dimensions:
1 magnitude of consequences
2 social consensus
3 temporal immediacy
4 concentration of effect
5 probability of effect
6 proximity.
Generally, three major legislative models are intended to motivate whistle-blowing
(Seifert et al., 2010): the Reward model, which provides monetary payments for
whistle-blowing; the anti-retaliation model, which assumes that the fear of retaliation
prevents most observers of fraud to report it; and the structural model, which is premised
on the assumption that when a company establishes a visible, earnest and formal internal
channel for disclosing fraud, employees are more likely to report fraud.
Besides models, various theories have also been presented in whistle-blowing
literature. Seifert et al. (2010), for instance, investigated the effective factors of
whistle-blowing by exerting organisational justice theory. According to this theory,
organisational justice has three dimensions: distributive, procedural and interactional.
Each dimension has the potential to affect whistle-blowing. Fredin (2011) also
applied two emotion-based psychology theories to the study of whistle-blowing. These
theories – decision avoidance and affective forecasting – suggest that one’s anticipated
emotions may play a role causing observers’ decisions to remain silent. Recently,
Trongmateerut and Sweeney (2013) applied the theory of reasoned action for determining
predictors of whistle-blowing. The theory of reasoned action proposes that one’s
behavioural intention will predict a voluntary behaviour and that intentions are
determined by subjective norms and one’s attitude toward the behaviour. Alleyne et al.
(2013) also applied justice and institutional theories on whistle-blowing intentions among
external auditors where an auditor’s individual factors (attitudes toward whistle-blowing,
perceived behavioural control, independence commitment, personal responsibility for
reporting and personal cost of reporting) exhibit a direct influence on his or her intentions
to whistle-blow, but are moderated by isomorphic factors (perceived organisational

6. 354 M. Namazi and F. Ebrahimi
support and team norms) and issue-specific factors (perceived moral intensity). In other
studies, theories such as theory of planned behaviour (Ajzen, 1991), expectancy theory
(Miceli and Near, 1984; Near and Miceli, 1985), conformity theory (Miceli and Near,
1988) and reinforcement theory (Near and Miceli, 1985) have been used.
Some other studies have concentrated on examining the effects of some influential
contextual factors affecting whistle-blowing for instance, Arnold and Ponemon (1991)
examined the internal auditor's perceptions of whistle-blowing within the context of his
or her level of moral reasoning. The findings revealed that internal auditors with
relatively low levels of moral reasoning were unlikely to predict whistle-blowing as a
means to disclose wrongdoing. They also indicated that the organisational position of the
individual contemplating the whistle-blowing act influences internal auditors' predictions,
with external auditors considered most likely to act, internal auditors next and marketing
analysts least likely to act. Hwang et al. (2008) examined the impact of culture on current
and future accounting and auditing professionals’ intent to be whistle-blowers in a
Chinese cultural society. It was found that most respondents believe that a general sense
of morality was the most important factor to encourage whistle-blowing, with abiding by
the policy of their organisation as the second. It was also found that guanxi, fear of
retaliation and media coverage, may discourage whistle-blowing in Chinese society.
Menk (2011) examined the impact of personality traits, ethical position and materiality of
a problem on an individual’s decision to engage in whistle-blowing activities. The results
of this study indicated that the ethical position of an individual is the most strongly
related to an individual’s intention to engage in whistle-blowing activities. The presence
of more pro-social personality traits in the decision-maker is also positively related to the
decision to whistle-blow but not as significantly as the ethical position. Drawing on
organisational justice theories and the theory of planned behaviour, Young (2013)
investigated factors most likely to impact the employee’s intention to comply with
internal whistle-blower policies. The findings suggested that the overriding factor
impacting employee’s attitude toward internal disclosure policies is their concerns about
negative consequences they may experience if they report and that perceptions of fairness
does not appear to decrease the employee’s concerns. Recently, Seifert et al. (2014)
examined whether trust provides a mechanism connecting organisational justice to the
likelihood of whistle-blowing. They hypothesised and found that supervisor trust and
organisational trust mediate the relationship between organisational justice and the
likelihood of whistle-blowing. Bartlett (2015) also found that both types of fraud and
contextual factors, such as whistle-blower anonymity and materiality, do influence an
employee’s decision to report or not report fraud. Soni et al. (2015), via the
organisational justice theory, examined variations in the propensity of trainee auditors to
blow the whistle internally on misconduct by an engagement leader. The study found that
the likelihood of trainee auditors reporting an engagement leader for misconduct
increases when there is a high level of distributive, interactional and procedural justice.
Gender, age, seniority, the importance of religion and performance ratings does not
appear to have effects on the propensity to whistle-blowing.
The findings of previous studies indicate that although different variables, theories
and various models have been implemented in these studies with the utilisation of
managerial and organisational, economic and psychological theories to determine
effective factors in whistle-blowing by members of the accounting profession, most
studies have focused on only one class of organisational, personal and situational
variables, failing to encompass all significant elements of whistle-blowing in their

7. A study of accountants’ whistle-blowing intention 355
studies. Furthermore, most of these studies have investigated the process of whistle-
blowing in developed countries and despite cultural, political, social and economic
differences between these countries and developing countries, the issue of whistle-
blowing in developing countries has been less investigated. Also, such studies have failed
to deal with the importance of the effect of religiosity on whistle-blowing. In this study,
an attempt has been made to fill these gaps as much as possible by studying whistle-
blowing in Iran.
2.3 Population and background of the study
The population of this study is Tehran Stock Exchange (TSE) market. TSE is the only
Iran’s largest stock exchange, a member of the World Federation of Exchanges and a
founding member of the Federation of Euro-Asian Stock Exchanges. Moreover, it has
been categorised as an emerging market. The number of firms listed on the TSE has also
been increasing during the past 5 years and now has reached to about 400 active firms in
2014. (Namazi and Khansalar, 2011).
Corporate governance in Iran is not yet well developed, but in the past few decades,
the government has taken steps to make marginal improvements. A modern concept of
corporate governance was not recognised until the government sought to improve the
competitive position of Iranian companies in the world’s capital markets to attract foreign
investments. In early 2000, the management of the TSE, the Islamic Parliament Research
Centre and the Economic and Finance Ministry, began efforts to improve corporate
governance in Iran. Until recently, the Iranian government controlled most businesses in
Iran, either directly or indirectly, and has made significant efforts to expand the capital
market. Its actions indicate an interest in enhancing the current system to include external
governance structures. For example, the Third and the Fourth Economic Development
Plans place a great deal of importance on the privatisation of governmental organisations.
Recent policies have also been aimed at increasing the number of external control
mechanisms in place. Thus it can be argued that Iran should be considered a code-law
country.
The ‘Administrative Health Promotion and Anti-Corruption Law’, approved in 2011,
has assigned certain obligations to the employees for reporting any form of corruptions as
mentioned in this law and has assigned certain obligations to the government for legally
supporting, providing security and compensation for damages caused to whistle-blowers.
The Securities and Exchange Organisation also approved in 2012 the instruction for
‘Internal Control of Publishers Approved in TSE and Iran Fara Bourse’ to support the
rights of investors, prevent the occurrence of fraud and organise and develop a fair and
transparent market. This measure is considered the first step for the capital market to
move toward internal auditing and reinforcing internal control.
Nevertheless, in Iran, company fraud cases are rarely disclosed by whistle-blowers.
Even though whistle-blowing fraud is considered by the Association of Certified Fraud
Examiners as the most common method of discovering fraud (ACFE, 2010), incidental
discovery has been mentioned to be the most important mechanism of discovering fraud
in Iran. Accounting authorities believe that a major cause of the occurrence of such cases
of fraud, which has exerted particular psychological and spiritual damage to the people’s
trust, is poor internal controls. Thus reinforcing internal controls and supporting whistle-
blowers are the best major strategies to prevent and discover fraud. They attribute the

8. 356 M. Namazi and F. Ebrahimi
lack of success in cases of whistle-blowing in Iran to different reasons. For example,
whistle-blowing in Iran is considered a cultural issue considered equal to being a
stoolpigeon and informer (Eskandar Bayati et al., 2011).
3 Hypotheses development
Based on the literature and the contextual variables dominated in Iran, the following
criterion is selected for developing hypotheses.
3.1 Organisational justice
Organisational justice refers to people’s perceptions of fairness within organisational
contexts [Whiteside and Barclay, (2013), p.253] and provides a framework for the design
of structural mechanisms intended to increase the likelihood of the internal
whistle-blowing. Based on the social exchange theory (Blau, 1964), perception of
organisational justice by inciting employees through the description of relations with the
organisation with which they have social interaction can affect whistle-blowing. In a
process of social exchange, employees perceive the just behaviour and confidence in
managers, going beyond the official job requirements and deliberately perform acts that
bring profit to the organisation (Seifert, 2006; Whiteside and Barclay, 2013).
Organisational justice is comprised of three dimensions (Greenberg, 1993):
distributive, procedural and interactional fairness and each dimension has the potential to
affect the likelihood of the internal employee disclosure of wrongdoing. Surveys of
whistle-blowers and anecdotal evidence have indicated that in addition to the seriousness
of the wrongdoing and the presence of strong evidence, the factors most important in
motivating whistle-blowing are clear channels for reporting the wrongdoing, an
atmosphere that encourages disclosure and the perceived likelihood that management will
correct the practice (Callahan and Dworkin, 1994; Miceli and Near, 1984). The last three
factors are structural in nature, controllable by company management and consistent with
procedural, interactional and distributive fairness, respectively.
Prior research studies (Seifert et al., 2010; Whiteside and Barclay, 2013; Seifert et al.,
2014; Soni et al., 2015) have found that organisational justice have positive and
significant impact on whistle-blowing. Thus organisational justice is expected to have a
positive and significant effect on the intention for accountants to whistle-blow in
financial statements. On this basis, the first research hypothesis is given as follows:
H1 Organisational justice has a positive and significant effect on the intention to report
fraud in financial statements by accountants.
3.2 Personal factors
3.2.1 Attitude toward whistle-blowing
According to theories of decision-making appeared in the social psychology (e.g., the
theory of reasoned action, Ajzen and Fishbein, 1980 and the theory of planned behaviour,
Ajzen, 1991), an individual’s behavioural intentions will predict a voluntary behaviour
and that those intentions are affected by subjective norms and individual’s attitude toward
the behaviour. Generally, the stronger the intention to engage in a behaviour, the more

9. A study of accountants’ whistle-blowing intention 357
likely its performance should be. Attitude toward a behaviour is defined as an
individual’s positive or negative feelings (evaluative effect) about performing the target
behaviour (Ajzen, 2001). The actor’s attitude is a function of all the beliefs regarding the
consequences of the behaviour, weighted by their importance. On this basis, the more
desirable one evaluates an intended behaviour, the more likely he will intend to perform
it. Previous research (Alleyne et al., 2013; Trongmateerut and Sweeney, 2013) proposed
that intentions to whistle-blow by accountants and auditors are a function of the beliefs
regarding the consequences of the behaviour. The results achieved by Buchan (2005) are
also compatible with these findings. Thus it is expected that attitude toward
whistle-blowing will have a positive and significant effect on the intention to whistle-
blow in financial statements by accountants. On this basis, the second research hypothesis
is given as follows:
H2 Attitude toward whistle-blowing has a positive and significant effect on the
intention to report fraud in financial statements by accountants.
3.2.2 Personal cost of reporting
Personal cost of reporting is another potential effective factor on whistle-blowing and
retaliation risk from organisation members is the most important personal cost [Kaplan
and Whitecottonan, (2001), p.50]. Personal costs of reporting refer to “the perceived
harm or discomfort that could result from reporting wrongdoing” [Dalton and Radtke,
(2013), p.156). Graham (1986) and Schultz et al. (1993) used the personal cost of
reporting variable in their model, arguing that personal perception of the risk of
retaliation by organisation members can negatively affect the intention of whistle-
blowing. Ponemon (1994, p.123) notes, “The nature and extent of the retaliations or
sanctions imposed by management or co-workers against the whistle-blower is perhaps
the most significant determinant to the prospective whistle-blower’s decision in the
communication of organisational wrongdoing.”
Evidence suggests that retaliation is part of a rational and planned process initiated by
authority not only to eliminate the whistle-blower as a witness, but also to suppress future
whistle-blowing decisions. In retaliating against the whistle-blowers, management
attempts to signal to others that confronting authority creates high risk and can ruin one’s
career (Xu and Ziegenfuss, 2008). Prior researchers (Schultz et al., 1993; Hooks et al.,
1994; Kaplan and Whitecottonan, 2001; Alleyne et al., 2013) have found that personal
costs of reporting have negative and significant impacts on whistle-blowing. Thus it is
expected that the personal cost of reporting will have a negative and significant effect on
the intention to whistle-blow in financial statements by accountants. On this basis, the
third research hypothesis is given as follows:
H3 The personal cost of reporting has a negative and significant effect on the intention
to report fraud in financial statements by accountants.
3.2.3 Proactive personality traits
Prior research studies (Crant, 1995; Menk, 2011) have found that personality traits may
influence whistle-blowing. Bateman and Crant (1993) proposed specifically that whistle-
blowers would be more proactive than other persons who have observed wrongdoing. A
proactive personality is the disposition that identifies whether or not an individual is

10. 358 M. Namazi and F. Ebrahimi
relatively unconstrained and acts to influence or change his or her environment
[Schermerhorn et al., (2010), p.34]. According to Bateman and Crant, (1993, p.104) the
“prototypic proactive personality” is “relatively unconstrained by situational forces
and...effects environmental change.” Thus, when a highly proactive person observes
wrongdoing, he or she will be more likely than other organisational members to blow the
whistle. Observers with higher levels of proactive personality will believe it is their
responsibility to act because they are more likely to see fraud. Highly proactive persons
also may believe they will succeed in getting wrongdoing stopped and that they will
avoid retaliation and other costs. That is because they have succeeded in problem solving
previously and because they may be less sensitive to environmental cues, suggesting
otherwise than are observers who score lower on the pro-activity scale [Miceli et al.,
(2008), p.56; Miceli et al. (2012), p.932]. Therefore, it is expected that proactive
personality traits will have a positive and significant effect on the intention to
whistle-blow in financial statements by accountants. On this basis, the fourth research
hypothesis is given as follows:
H4 Proactive personality traits have a positive and significant effect on the intention to
report fraud in financial statements by accountants.
3.2.4 Religiosity
Discussions of religious ethics bring forth the viewpoint that the root of ethics has its
identity in the existence of God (Keller et al., 2007). On this basis, ethics is a natural
thing in religious thought and is in accordance with human nature. A great majority of the
population (nearly 99%) in Iran are Muslims [Oktem and Shahbazi, (2012), p.945]; So in
this research the concept of religiosity is mainly referred to Islam.
In religious and Islamic ethics-based decision-making, a religious person makes
decisions with a strong resolve and confident heart and in accordance with Islamic ethics
instructions, based on Islamic values and beliefs, as well as he/she can by adhering to
determined stages, by applying his knowledge and information and that of qualified and
competent people and by relying on God and seeking His help. He is immune from a
shaking spirit, anxiety, doubt and the confidence from his reliance on God will reinforce
the rational dimension of decision-making. Religious teachings encourage people to
perform appropriate tasks, even if these tasks have costs for them [Wise, (1995), p.6].
Because whistle-blowing is considered to be ethical decision-making (Near and
Jensen, 1983), religiosity is expected to cause an increase in inclination to whistle-blow.
For instance, Miceli and Near (1992) found that religious values are the major
determinants of whistle-blowing. Wise (1995) also found that there is a positive and
significant relationship between intrinsic religiosity and whistle-blowing. Thus it is
expected that religiosity will have a positive and significant effect on the intention to
whistle-blow in financial statements by accountants. On this basis, the fifth research
hypothesis is given as follows:
H5 Religiosity has a positive and significant effect on the intention to report fraud in
financial statements by accountants.

11. A study of accountants’ whistle-blowing intention 359
3.3 Situational determinant of moral intensity
Prior research studies (Graham, 1986; Schultz et al., 1993; Ayers and Kaplan, 2005;
Mesmer-Magnus and Viswesvaran, 2005; Taylor and Curtis, 2010) proposed the
significant impact of ethical issue-related constructs on whistle-blowing. Constructs of
perceived moral intensity, perceived seriousness and materiality, which have similar
concepts, are the most important ethical issue-related constructs.
Near and Miceli (1996, p.508) suggested that “whistle-blowing is warranted if the
whistle-blower believes, in good faith, that some portion of society is endangered by the
organisation’s actions.” Furthermore, ethicists have indicated that whistle-blowers should
“perceive serious danger that can result from the violation” [Bowie, (1982), p.143], or
else the act of reporting is not moral. Thus it is expected that moral intensity will have
positive and significant effect on the intention to whistle-blow in financial statements by
accountants. On this basis, the sixth research hypothesis is given as follows:
H6 Moral intensity has a positive and significant effects on the intention to report fraud
in financial statements by accountants.
4 Research methodology
The major purpose of this research is identifying and modelling effective factors affecting
the whistle-blowing intention of reporting financial fraudulent by accountants. This study
adopts a quantitative methodology research and its population encompasses accountants
of the whole 400 companies listed in TSE in 2015. In order to increase the validity of the
research and also to include more companies in the study, no sampling was made.
The questionnaire method was used to collect the data regarding research variables.
The questionnaires prepared by Park and Blenkinsopp (2009), Schultz et al. (1993),
Fredin (2011) and Bateman and Crant (1993) and specially Fredin (2011) were used
initially. However, since our respondents were in Iran, these questionnaires were, of
course, translated to Farsi and they were modified slightly in such a way to reflect
cultural and social aspects of Iran. The ‘face validity’ method was used in this study to
ensure the validity of the questionnaire and the questions in the questionnaire were
revised and finalised at several stages in accordance with the requirements of the country
and with views of the qualified accounting professors and PhD accounting students who
are totally familiar with English and accounting. To assess the reliability of the
questionnaires, Cronbach’s alpha method was used. These rates were achieved by
running SPSS.
In this research, for distributing questionnaires the addresses, e-mails and telephone
numbers of the 400 TSE listed companies, were prepared and questionnaires were sent to
their accountants (financial managers, cost accountants and financial accountants) via
e-mail and posting address, depending on the available information. Hence no sampling
was attempted to increase the rate of the total responses. Among the 400 questionnaires
delivered to respondents, 183 were completed and usable questionnaires which were
returned to the researchers. Of these 183 questionnaires, 94 were related to high
organisational justice and 89 to low organisational justice companies. For data analysis,
the SPSS and Excel software programs were used to analyse the data and ordinary least
squares regression was also exerted to test the results.

12. 360 M. Namazi and F. Ebrahimi
5 Research variables
In the present research, to investigate effective factors with the intention of whistle-
blowing in financial statements by accountants, the variables of organisational justice,
attitude toward whistle-blowing, personal costs of reporting, proactive personality traits,
religiosity and moral intensity were used as the independent variables. Following
Brennan and Kelly (2007) and Young (2013), the “intention of internal whistle-blowing
in financial statements”, which indicates the probability of whistle-blowing in the
hypothetical vignettes by the respondent, has been used as the dependent variable. In first
and second questions, participants assessed the likelihood that they would report the
mentioned fraud in the vignette to the next higher level of management and audit
committee on a five-point Likert scale with 1 = unlikely and 5 = likely. Furthermore, in
this study the third person response perspective has also been used to mitigate the social
desirability response bias (e.g., Schultz et al., 1993; Dalton and Radtke, 2013).
To control other possible factors effective in whistle-blowing in financial statements
by accountants, in accordance with previous research (Brennan and Kelly, 2007; Soni
et al., 2015), the effect of such factors as gender (1 if the respondent is man, 0 if woman),
age, experience, education level, major and marital status of whistle-blower and the
number of employees as an index of company size (Brennan and Kelly, 2007) were
considered as control variables, which are mentioned in the first section of the
questionnaire.
To investigate the effect of independent variables on the intention of internal whistle-
blowing in financial statements by accountants, as in Fredin (2011), first a vignette was
used in which the hypothetical boss of an accountant is faced with a case of fraud in the
financial statement. A sample of this vignette is shown in the appendix. Then, for
investigating the effect of organisational justice on whistle-blowing intention, the
vignettes related to higher and lower organisational justice were presented, giving rise to
the creation of two types of questionnaires. A sample of the vignette is also shown in the
Appendix. These questionnaires were randomly distributed among the participants. The
variable of organisational justice used in this study was treated as a dummy variable, such
that if the organisational justice was high, it was given a score of 1 and if the
organisational justice was low, it was given a score of 0. To assess the variables of
attitude toward whistle-blowing, personal cost of reporting and moral intensity in this
research, the scale introduced by Park and Blenkinsopp (2009), Schultz et al. (1993) and
Fredin (2011) was used and respondents were also required to evaluate their agreements
to each consequence of whistle-blowing by responding to the questions on the five-point
Likert scale. Proactive personality traits and religiosity were measured using Bateman
and Crant (1993) and Khodayarifard (2009) scales. However, to make them compatible
with Iran’s situation and culture and to be understandable for Iranians’ accountants, all
these questionnaires were modified and translated to Farsi.
6 Results
6.1 Descriptive results
Table 1 shows the descriptive statistics of the study’s variables, including the mean and
the standard deviation. The variables of proactive personality traits and organisational

13. A study of accountants’ whistle-blowing intention 361
justice posit the highest and the lowest means, respectively. Moral intensity and attitude
toward whistle-blowing show the lowest and highest dispersion, respectively.
Table 1 The descriptive statistics of the variables of the study
Variables Minimum Maximum Mean Std. deviation
Whistle-blowing 1.000 5.000 3.437 1.001
Organisational justice 0.000 1.000 0.540 0.500
Attitude toward whistle-blowing 1.400 5.000 3.522 0.854
Personal cost of reporting 1.000 5.000 2.862 0.820
Proactive personality traits 2.286 5.000 3.783 0.426
Religiosity 1.846 5.000 3.761 0.493
Moral intensity 2.083 5.000 3.478 0.393
Results of the analysis of the questionnaire’s general questions indicate that
approximately 67% of the respondents are males and the rest are females. Moreover,
about 67% of the respondents have an educational certificate in the field of accounting,
23% in the field of management, 9% in the field of economy and 1% in other fields.
Sixty-eight percent of the respondents possess bachelor’s degree and 32% have masters.
Therefore, the respondents are in appropriate conditions for this research.
6.2 Normality test of the model
In this study, Kolmogorov-Smirnov test was employed to examine normality of the
research variables. The results are shown in Table 2 revealing that the significance
statistics of all variables (except organisational justice) are greater than 5%. This
indicates that all research variables (except organisational justice) of the study are
following the normality condition.
Table 2 The results of test of normality
Variables Kolmogorov-Smirnov Z Sig.
whistle-blowing 1.273 0.078
Organisational Justice 1.588 0.013
Attitude toward whistle-blowing 1.016 0.253
Personal cost of reporting 1.269 0.080
Proactive personality traits 0.652 0.789
Religious 1.354 0.051
Moral intensity 0.833 0.492
6.3 Reliability and confirmatory factor analysis
The reliability of the questionnaires and the significance of the research constructs were
also tested based on the Cronbach’s alpha and confirmatory factor analysis accordingly.
Table 3 shows the result.

14. 362 M. Namazi and F. Ebrahimi
Table 3 The result of the Cronbach’s alpha and confirmatory factorial analysis
Questionnaire Questions of the questionnaire T
Cronbach’s
alpha
Attitude toward
whistle-blowing
1 Blowing the whistle of CFO would help
prevent serious harm to the company.
9.512
0.774
2 Reporting CFO’s action is helpful in
controlling unethical behaviour.
8.720
3 Whistle-blowing on CFO enhances the
public interest.
8.218
4 Reporting CFO’s action in the workplace is a
way for an employee to do his or her duty.
7.411
5 Whistle-blowing on CFO is the moral thing
to do.
5.306
Personal cost of
reporting
1 What is the extent of the revenge that the
financial manager might exert (for example,
reduction of your job status) against you to
decrease your job status?
5.342
0.826
2 What is the extent of the actions that the
financial manager might take (for example,
reduction of pay raise) to harm you
financially?
5.173
3 What is the extent of the revenges that other
managers might take against you?
3.000
Proactive
personality traits
1 I am constantly on the lookout for new ways
to improve my life.
12.447
0.912
2 I feel driven to make a difference in my
community and maybe the world.
9.458
3 Wherever I have been, I have been a
powerful force for constructive change.
6.826
4 I enjoy facing and overcoming obstacles to
my ideas.
9.222
5 Nothing is more exciting than seeing my
ideas turn into reality.
5.480
6 No matter what the odds, if I believe in
something I will make it happen.
9.800
7 If I see something I don’t like, I fix it. 8.588
8 I love being a champion for my ideas, even
against others’ opposition.
8.708
9 I excel at identifying opportunities. 7.804
10 I am always looking for better ways to do
things.
8.933
11 When I have a problem, I tackle it head-on. 7.363

15. A study of accountants’ whistle-blowing intention 363
Table 3 The result of the Cronbach’s alpha and confirmatory factorial analysis (continued)
Questionnaire Questions of the questionnaire T
Cronbach’s
alpha
Proactive
personality traits
12 I am great at turning problems into
opportunities.
7.332 0.912
13 I can spot a good opportunity long before
others can.
6.716
14 If I see someone in trouble, I help out in any
way I can.
7.175
Religiosity
1 God is aware of every secret affaire. 1.773
0.905
2 In dooms day, God may forgive you for his
share (right), but he will not forgive you for
other people’s shares (rights).
0.944
3 The existence of Dooms day is necessary for
implementing justice.
2.416
4 In making revenues, I pay attention to the
dissolver issue.
1.326
5 In making revenues, I pay attention to
religiously prohibited issues.
0.798
6 Every things good which reaches to human
being, is from the God, while everything bad
is from the human being.
5.227
7 God’s religions are designed to satisfy
individuals as well as society’s needs.
8.821
8 In performing my job, I recourse to the God. 3.466
9 I try to worship with other people. 18.479
10 In order to protect my religion’s belief, I am
willing to take a risk.
19.905
11 If the right situation exists, I will perform my
religious guideline.
15.128
12 I will prefer to solve other people’s
problems, rather than my own problem.
6.845
13 I try to perform my job based on God’s
orders.
5.165
Moral intensity
1 Others will be harmed by CFO’s decision. 9.125
0.774
2 CFO’s decision will have serious
consequences for other people.
9.517
3 The expected effect of CFO’s decision is
likely to occur.
5.083
4 CFO’s decision will definitely harm others. 7.036
5 CFO’s decision will affect people in the local
community.
7.544
6 CFO’s decision will impact his/her
co-workers.
9.883
7 CFO’s decision will cause harm in the
immediate future.
7.349

16. 364 M. Namazi and F. Ebrahimi
Table 3 The result of the Cronbach’s alpha and confirmatory factorial analysis (continued)
Questionnaire Questions of the questionnaire T
Cronbach’s
alpha
Moral intensity
8 The consequences of CFO’s decision will
occur in the near future.
5.886
0.774
9 The consequences of CFO’s decision will
impact a small number of people in a major
way.
2.934
10 A few individuals will bear the brunt of
CFO’s decision.
5.098
11 Others in accounting profession would
support CFO’s decision.
1.509
12 Please assess your personal responsibility for
informing higher management (competence
managers inside the firm) of CFO’s act.
8.134
Intention of
whistle-blowing
1 How likely is it that you would inform higher
management of CFO’s act?
15.958
0.830
2 How likely is it that other accountants in the
company who have become aware of CFO’s
act would inform higher management?
11.669
3 How likely is it that you would inform
internal audit department or audit committee
of CFO’s act?
14.716
4 How likely is it that other accountants in the
company who have become aware of CFO’s
act would inform internal audit department
or audit committee?
10.399
Table 3 reveals that the t statistics regarding factorial analysis of the questions of attitude
towards whistle-blowing, personal cost of reporting, proactive personality traits, intention
of whistle-blowing, religiosity and moral intensity, are greater than 1.96 and their effects
are statistically significant at the 95% confidence level. The only exceptions of the
factorial analysis are items 1, 2, 4 and 5 of the religiosity and item 11 of the moral
intensity constructs. Consequently, in order to measure the constructs of the preceding
variables, the weighted average of the significant factorial elements of the constructs was
calculated. Table 3 also shows that Cronbach’s alpha of the constructs is greater than
0.70; thus, the reliability of the designated constructs was also confirmed.
6.4 Correlation analysis
In order to determine the direction and relationship among various constructs of the
whistle-blowing, Pearson correlation coefficient test was performed. The result is shown
in Table 4.
Table 4 shows that among various variables affecting whistle-blowing, organisational
justice (r = 0.565) and moral intensity (r = 0.503) respectively demonstrate the highest,
while personal cost of reporting (–0.129) exhibits the lowest relationship with
whistle-blowing. In addition, all designated variables in Table 4, reveal a positive

17. A study of accountants’ whistle-blowing intention 365
relationship (at the 5% confidence level) with whistle-blowing except personal cost of
reporting, which is not significant and negatively affects whistle-blowing.
Table 4 The results of correlation coefficient test
Variables
Whistle-blowing
Organisational
justice
Attitude
toward
whistle-blowing
Personal
cost
of
reporting
Proactive
personality
traits
Religiosity
Moral
intensity
Whistle-blowing 1
Organisational justice .565** 1
Attitude toward whistle-blowing .311** .216** 1
Personal cost of reporting –.129 .060 .214** 1
Proactive personality traits .325** .359** .265** .135 1
Religious .262** .237** .133 –.057 .452** 1
Moral intensity .503** .357** .322** .126 .407** .309** 1
Note: **Correlation is significant at the 0.01 level (one-tailed).
6.5 Hypothesis testing
The coefficients, the value of the t statistic and the significance related to control
variables shown in Table 5 suggest that the intention to report is significantly more in
men than in women, that the level of education has a positive and significant effect and
that the experience of respondents has a negative and significant effect on the intention to
report the fraud in financial statements. The impacts of age, education major, marital
status and company size on the intention to report the fraud in financial statements are not
statistically significant.
Table 5 Results of testing the control variables of the study
Variables B Std. error T Sig.
Gender .315 .145 2.176 .036
Age –.022 .031 –.734 .464
Experience –.017 .007 –2.607 .028
Education level .360 .125 2.888 .021
Major –.035 .108 –.321 .748
Marital status –.173 .162 –1.070 .286
Size –.041 .071 –.576 .565
Constant 2.165 .860 2.519 .013
R square
Adjusted R
square
Durbin-Watson F Sig.
.357 .323 1.772 13.250 .000

18. 366 M. Namazi and F. Ebrahimi
Table 6 Results of testing the hypotheses
Variables B Std. error T Sig.
Standard
coefficients
Organisational justice 1.173 .139 8.462 .000 .586
Attitude toward
whistle-blowing
.035 .010 3.594 .000 .030
Personal cost of reporting –.173 .178 –.974 .362 –.144
Proactive personality traits .144 .158 .906 .366 .062
Religiosity .275 .116 2.377 .029 .137
Moral intensity .015 .007 2.221 .032 .006
Gender .159 .061 2.624 .015 .075
Age –.019 .025 –.753 .452 –.142
Experience –.002 .001 –3.003 .005 –.013
Education level .011 .003 3.387 .000 .005
Major –.008 .090 –.085 .933 –.005
Marital status –.040 .133 –.302 .763 –.019
Size –.008 .058 –.135 .893 –.008
Constant .271 1.001 .270 .787 ---
R Square
Adjusted R
square
Durbin-Watson F Sig.
.725 .709 1.832 32.647 .000
The results of testing the hypotheses are presented in Table 6. The coefficient, the value
of the t statistic and the significance related to the variables suggest that organisational
justice, attitude toward whistle-blowing, religiosity and moral intensity exhibit a positive
and significant effect on the intention to report the fraud in the financial statements by
accountants. The personal cost of reporting reveals a negative and insignificant effect on
the intention to report the fraud in the financial statements by accountants. Proactive
personality traits posit positive and insignificant effects on the intention to report the
fraud in the financial statements by accountants. Thus, the first, second, fifth and sixth
hypotheses are confirmed at 95% confidence interval and – the third and fourth
hypotheses are rejected at 95% confidence interval.
In order to prioritise and determine significant and important independent and control
variables in the model, the absolute value of the standard coefficients was used. As can
be seen in Table 6, organisational justice (.586), religiosity (.137) and then gender (.075)
show the most impact on the intention to whistle-blow in the financial statements.
Attitude toward whistle-blowing (.030), experience (.013), moral intensity (.006) and
level of education (.005) are in the next ranks.
7 Conclusions and discussion
The purpose of this research was to identify factors that affect the accountants’ intentions
of reporting fraud in financial statements and to present a model of these factors and
prioritise them in Iran. For this purpose, six hypotheses were presented. The result of

19. A study of accountants’ whistle-blowing intention 367
testing the first hypothesis showed that organisational justice posits a significant positive
effect on the accountants’ intentions to internally report fraud in financial statements.
Thus the first hypothesis was confirmed. This result agrees with almost all previous
studies, such as those of Seifert et al. (2010), Seifert et al. (2014) and Soni et al. (2015),
but it disagrees with Young’s study (2013). The result of prioritising variables shows that
organisational justice has the most impact on the intention to whistle-blow in the
financial statements. The reason for achieving this result could be a result of the
perception of organisational justice that plays a highly significant role in shaping attitudes
and behaviour of the employees (Ronald, 2005). The existence of organisational justice in
the workplace indicates that the organisation considers its employees as important. In
such a condition, the employees also feel committed to the organisation and a mutual
treaty is formed between the employees and the organisation on the basis of the social
exchange theory, which would result in pro-social behaviour, such as whistle-blowing
(Seifert, 2006).
The result of testing the second hypothesis shows that attitude toward whistle-
blowing also exhibits significant positive effects on the accountants’ intentions to
internally report fraud in the financial statements. Thus the second hypothesis also was
confirmed. This result is consistent with Park and Blenkinsopp (2009), Alleyne et al.
(2013) and Trongmateerut and Sweeney (2013). The result of prioritising variables shows
that after organisational justice, religiosity and gender, attitude toward whistle-blowing
have the most impact on the intention to whistle-blow in the financial statements. The
reason for achieving this result could be that the accountants under study maintained a
desirable assessment of the outcomes of reports of fraud and believed that reporting the
fraud has several consequences:
a preventing harm to the company
b controlling unethical behaviour
c enhancing the interest of the public
d performing an employee’s duty
e moral satisfaction [Park and Blenkinsopp, (2009), p.550].
The result of testing the third hypothesis showed that the personal cost of reporting has
insignificant negative effects on the accountants’ intentions to internally report fraud in
financial statements. Thus the third hypothesis could not be accepted. This result is
inconsistent with previous researches (Schultz et al., 1993; Kaplan and Whitecottonan,
2001; Dalton and Radtke, 2013). The reason for achieving this result could be that in
Iran, some accountants are not afraid of the negative consequence of whistle-blowing and
ultimately losing their jobs, because either is supported by some internal or external
groups and/or they can easily find a new job elsewhere.
Also, the finding could result from this notion that religious beliefs of the accountants
are so strong that is would, with recourse to God, release them from the consequences of
the retaliation. Hence they feel it is their spiritual duty to commit whistle-blowing and not
to be afraid of its negative consequences.
The result of testing the fourth hypothesis showed that proactive personality traits
have insignificant positive effects on the accountants’ intentions to internally report fraud
in the financial statements. Thus the fourth hypothesis could not be accepted. This result

20. 368 M. Namazi and F. Ebrahimi
confirms the findings of some studies such as Seibert et al. (2001), but disagrees with the
results of some studies, such as Menk (2011) and Miceli et al. (2012). The reason for
reaching this result could be that the proactive personality trait can lead to higher anxiety
and ambition about professional success. Therefore, accountants with the proactive
personality traits may discern the contradiction between whistle-blowing and achieving
success in their jobs when faced with fraud and they may resolve this contradiction in
line with proactive management of personal outcomes and avoid whistle-blowing.
The result of testing the fifth hypothesis showed that religiosity has significant
positive effects on the accountants’ intentions to internally report fraud in financial
statements. Thus the fifth hypothesis was confirmed. These results are consistent with
Wise (1995) and Miceli and Near (1992). However, they are inconsistent with the
findings of Soni et al. (2015). The result of prioritising variables showed that after
organisational justice, religiosity had the most impact on the intention to whistle-blow in
financial statements. The reason for achieving this result could be that religion is a potent
intrinsic construct dominated in Iran and is considered a foundation of ethics (Keller
et al., 2007), which will play a significant role in such decision-making (Near and Jensen,
1983).
The result of testing the sixth hypothesis shows that moral intensity has significant
positive effects on accountants’ intentions to internally report fraud in financial
statements. Thus the sixth hypothesis was confirmed. These results are in agreement with
the previous studies (Schultz et al., 1993; Menk, 2011). The result of prioritising
variables shows that after organisational justice, religiosity, gender, attitude toward
whistle-blowing and experience, moral intensity has the most impact on the intention to
whistle-blow in financial statements. The reason for achieving this result could be that the
accountants’ behaviour is issue-contingent, depending on their perception of moral
intensity.
This study contributes to the whistle-blowing literatures on several dimensions: First,
this paper is the first attempt to study empirically the internal reporting aspects of
whistle-blowing in Iran. Second, contrary to prior researches in developed countries, it
was found that the personal cost of reporting has no significant effects on the
accountants’ whistle-blowing intentions. Third, it showed the most important factors
affecting the whistle-blowing and ranked them accordingly.
8 Implications for practice
Based on the findings of the study, it is strongly suggested that managers and other
stakeholders pay attention to the effects of the constructs identified in this research,
particularly on the effect of organisational justice, attitude toward whistle-blowing,
religiosity and moral intensity on whistle-blowing. It is also suggested that the board of
directors of companies establish unbiased whistle-blowing procedures to strengthen
internal controls. They also promote whistle-blowing and respect whistle-blowers,
providing necessary motives for them and taking necessary measures as soon as they
receive reports of fraud. Furthermore, to increase the efficacy of these procedures, the
board of directors should focus on such strategies as the administration of educational
programs on ethics as well as cultural and religious programs, which can have positive
effects on attitude and religiosity. The TSE and other law-making bodies in the area of
upgrading corporate governance are also recommended to put on their agenda the

21. A study of accountants’ whistle-blowing intention 369
drawing up of laws that support whistle-blowing. It is suggested that universities also
develop strategies for the prevention of fraud and especially organisational justice and
such things in their accounting syllabus. Researchers are also recommended to conduct
more studies in the area of contextual variables affecting whistle-blowing.
9 Limitations of study
In this study, the intention toward whistle-blowing, as opposed to actual whistle-blowing
behaviour, was measured because of the limitation of research design, practical issues
and the inherently flawed nature of actual whistle-blowing data (Seifert et al., 2010;
Robinson et al., 2012). The instrument contained a hypothetical vignette that limits the
external validity.
Moreover, use of the questionnaire as a gathering information tool has innate
limitations, such as lack of familiarity of the respondents with the subject, different
interpretations of the terms and words used by respondents and conservativeness of some
respondents in answering the questions. However, we believe that none of these
limitations was significant in effecting the internal and external validity of this research.
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Appendix
1 A scenario of financial manipulation, partly borrowed from Fredin, (2011)
Suppose you are working in a company as a head of the accounting department and the
financial manager, as your boss, informs you in a company’s meeting that the CEO, as
the president of the company, has recently told the financial manager that the company
needs ample cash and liquidity. The required cash must be provided by borrowing a huge
amount of money from the bank. The financial manager requests from you to investigate
this issue. You, after the investigation of the matter, arrive at this conclusion that the
company is not in a suitable financial position and it is in the verge of the bankruptcy. In
addition, the accumulated loss of the company from prior years is also high and the
company has not been able to repay its accrued debts. You report this information
honestly to the financial manager, but the financial manager forces you to misrepresent
historical financial records of the company by manipulating financial documents and
information of the company in such a way to present a situation in which the company is
in a good financial position and it can repay its accrued debts. Despite of your objection,
you notice that manipulation of the documents and accounting journal books of the
company, which was deemed by the financial manager, has taken place. Now you are
thinking whether you should report the financial manager’s action to higher responsible
level of management or not?

25. A study of accountants’ whistle-blowing intention 373
2 Questionnaire of high/low organizational justice, mainly adopted by
Whiteside and Barclay (2013)
Suppose in the span of the time that you are employed in your organization, you have
noticed that the company generally treats its employees [fairly/unfairly]. For example,
you have found that employees [usually/seldom] have the ability to express their views
and feelings when decisions are being made. In general, decisions are [based/not based]
on accurate information and procedures [always/never] include ways that decisions can
be appealed if employees are dissatisfied or feel that something was overlooked. The
company [has never/has] been known to play favourites among employees and your
co-workers agree that the company generally acts [ethically/unethically]. It also seems
like employees [are/are not] rewarded in a way that reflects what they contribute on the
job. During your work-term, you have always felt like the company has acted
[professionally/unprofessionally], [treating/rarely treating] you with dignity and respect.
The company [has/has not] been committed to providing you with any information that
you need in a timely manner and the information is always [clear and easy to
understand/unclear and confusing].
Given the preceding scenario and the financial manager’s act, please indicate the
probability of the following issues:
1 How likely is it that you would inform higher management about CFO’s act?
2 How likely is it that other accountants in the company, who have become aware of
CFO’s act, would inform higher management?
3 How likely is it that you would inform internal audit department or audit committee
about CFO’s act?
4 How likely is it that other accountants in the company who have become aware of
CFO’s act, would inform internal audit department or audit committee?