whistle is usually blown to get attention that will lead to subsequent action
relating to the reason for which the whistle is blown. The person who blows the
whistle could be referred to as a whistle-blower.  The act of blowing the whistle to get
attention, so as to highlight a situation, which will lead to an action, could
be referred to as whistleblowing.  The terms whistle-blower and whistleblowing
are two relatively new phenomena that have recently entered the corridors of
many organisations.  According to Gray
(n.d.) “whistleblowing as a metaphor refers to the act of disclosing
information concerning conduct with or by an organisation that the whistle
blower believes to be unethical, illegal, or dangerous with the intent of
having the conduct reviewed and stopped. He further purports that
“whistleblowing occurs in two contexts; internal whistle blowing involves
disclosure to higher authorities within an organisation and eternal whistleblowing
involves disclosure to outside enforcement authorities and or the press”.  

(n.d.) posited that “although this statement (definition) has been widely
accepted, researchers have indicated problems with this definition. Farrell and
Petersen (1982), for instance, perceived whistleblowing as occurring only when
information is leaked to parties outside the organization. That is,
whistleblowing can only occur when parties external to the organization are
informed of illegal or unlawful wrongdoing within an organization. These
individuals may be members of the media, government officials, members of
public support groups, or various other parties external to the organization who
can bring about change”.  The author
further stated that “Near and Miceli’s (1985) definition of whistleblowing,
however, describes it as taking place when a person reports individual or
corporate wrongdoing to sources either internal or external”.

review of literature focuses primarily on internal whistleblowing.  This direction is pursued in response to the
growing need in organisations to improve internal efficiencies, effectiveness
and transparency, incorporating the recognition and adherence of
standards.  Whilst the aim is to improve
the efficiencies in an enterprise, questions arise as to the level of
effectiveness of whistleblowing and the methodology used to arrive at this.  Effective whistleblowing is defined as “the
extent to which the questionable or wrongful practice (or omission) is
terminated at least partly because of whistle blowing and within a reasonable
timeframe” (Near & Miceli, 1995, p. 681). 
(for example Nieweler (2005)  have argued that a correlation appears to
exist between internal whistleblowing and the effectiveness of the entity.  The strength of the correlation will allow
for the easy discernment of the effectiveness. That is the stronger the
correlation, the more observable its effectiveness appears. 

Nieweler (2005) posited that “there is a relationship between blowing
the whistle and an organization’s culture. A strong and effective internal
ethics program is an important component of a healthy corporate culture; effective
whistleblowing depends on the right corporate culture that encourages concerns
to be raised”.   The writer further alluded that “whistleblowing
acts as a deterrent to corrupt practices, encourages openness, promotes
transparency, establishes the risk management systems, and helps protect the
reputation of an organization”. “Whistleblowing should be seen as a safety
valve, an essential one at that, and should be part of an organization’s
internal controls. Having a whistleblowing process in place does not mean
failure. Boards need to consider the effectiveness of whistleblowing policies
and procedures as part of their oversight of internal controls, and internal
audit plays an important role in supporting boards in this area”.  “Employees who sound the alarm about
misconduct early enough can help to ensure that problems come to light before
it is too late, helping to prevent disasters from taking over. An
organization’s whistleblowing procedures should encourage individuals to
disclose concerns using appropriate channels before those concerns become
serious problems, damaging an organization’s reputation through negative
publicity, regulatory investigation, violations and fines”.

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            Throughout this
research various sub-themes will be examined so as to provide a more detailed
and in depth application of whistleblowing as a tool of internal control. These sub-themes include Risk
Assessment, Ethics, Socialization and Culture.

risk Management is defined as a process, effected by an entity’s board of
directors, management and other personnel, applied in strategy setting and
across the enterprise, designed to identify potential events that may affect
the entity, and manage risk to be within its risk appetite, to provide
reasonable assurance regarding the achievement of entity objectives.  (COSO, 2004). The Committee of Sponsoring
Organizations of the Treadway Commission (COSO) states that in assessing risk,
management considers expected and unexpected events. Management assesses the
risk of unexpected potential events and expected events that can have a
significant impact on the entity. Although the term “risk assessment” sometimes
has been used in connection with a one-time activity, in the context of
enterprise risk management the risk assessment component is a continuous and
iterative interplay of actions that take place throughout the entity. (COSO,

a research article Lewis & Vandeckerckhove 2011, the editor in comparing
whistle blowing and risk manager, states that even though they are some
similarities between the two, they appear to be independent and have different
process and objectives. The primary focus of whistleblowing is protecting the
whistle blower and the compliance with legal and regulatory frameworks with
little focus on the potential organisational benefits of whistleblowing in
identifying and managing risk. 
(Whistleblowing and Democratic Values, 2011, p. 56)


 Despite the correlation between whistleblowing
and risk management, there are very few examples where this relationship is
identified and discussed in the literature. Moeller (2011) is one of those who
discuss whistleblowing in relation to ERM. He states that whistleblowing
programs can be a useful tool for ERM but also that ‘whistleblowing cases can
inflict serious damage to an enterprise’s reputation as well as on the careers
of accused managers’ (p. 204). Moeller emphasises the risk that the ineffective
management of whistleblowing programs may create while mentioning that
‘whistleblowing provisions are primarily designed to protect employees rather
than provisions to increase enterprise internal controls or to cover identified
risks’ (p. 205).( Lewis David & Wim Vandeckerckhove)

(2011) in his article states that The Association of Certified Fraud Examiners
(ACFE), for example, indicates that ‘tips’ have been found to be the most
common form of fraud detection in all their research undertaken since 2002. The
ACFE research examines occupational fraud, which involves any case where an
occupational position is used for personal gain, in all levels of the
organisation. In 2010, tips accounted for 40.2% of the initial detection of
fraud. Management review was the second form uncovering 15% while internal
audit was third uncovering 14% of frauds. The ACFE 2010 report, which is based
on 1,843 cases of fraud reported by the Certified Fraud Examiners in more than
100 countries, found that 49.2% of fraud tips were provide by employees and
13.4% were provided anonymously. Organisations that had fraud hotlines where
employees can report suspected wrongdoing without fear of retaliation had a
higher fraud detection rate (47%) than those that did not (34%). ).( Lewis
David & Wim Vandeckerckhove).

the years, it has been noted that whistle blowing used as a tool of internal
control, leads to a reduction of under-reporting of internal wrongdoings.
Studies have shown that there is a direct correlation between ethics and
whistleblowing and a person’s socio-cultural background and whistleblowing. As
it relates to ethics, an individual will be more inclined to follow after
morally accepted principles and report wrong doings, if she or he’s moral
identity is high. According to Aquino & Reed, 2002, moral identity is the
extent to which individuals consider themselves to be a moral person.
Therefore, if a person’s moral identity is high, then that person will be quick
to report instances of wrong doings. If the moral identity is low, then that
person will not be so willing to report wrong doings. Chung et al. 2004, Paul
and Townsend 1996, stated that a good internal whistle-blowing system will lead
to the timely detection of fraud, permitting the company to correct the
wrongdoing and minimise the costs of the fraud. It is further argued by Coram
et al. 2008 that fraud has increased in recent years in terms of the frequency
and costs, with employees and management being the greatest perpetrators. One
way to mitigate against this is the implementation of an internal
whistle-blowing system that complements the companies’ code of ethics as recommended
by the Standards Australia 2003.                                                                                                                                                                                                                        

to Bowden and Smythe 2009; Miceli et al. 2009; Paul and Townsend 1996, when
employees are encouraged to act within the code of ethics, the safety and
well-being of the organisation is increased, damage claims and legal regulation
avoided, the satisfaction of employees increased which will foster greater work
commitments and loyalty. Mayer, Aquino, Greenbaum, and Kuenzi (2012) found that
ethical leadership reduces employees’ unethical behavior and conflict in a work
group. Den Hartog and Belschak (2012) also showed that ethical leadership
influences employee initiative as well as counterproductive work behavior.
Therefore, adherence to the code of ethics must be from the top and then move
downwards in organizations.

According to Schultz et al. 1993, Brody et al. 1999,
Patel 2003, understanding culturally embedded norms that will affect whether or
not an individual participates and does not participate in whistleblowing can
assist organizations in the design and maintenance of effective internal
control environments globally. There are several behavioural theories that
supports this issue. One such theory is the theory of reasoned action which
states that a person’s behavioural intentions will predict a voluntary
behaviour and that intentions are determined by subjective norms and one’s
attitude towards the behaviour. Cialdini and Trost 1998
define subjective norms as an individual’s interpretation of the opinions of
important others regarding the behaviour in question. In other words, an individual’s
opinion who is held in high regard by another, will result in a particular
behaviour or reaction, than someone of less importance. According to Cialdini
and Trost, norms have the capacity to influence human actions because they make
clear the behaviours that are expected of individuals by those in their social

and Hong 2007 stated that culture functionally enables group members to
interpret and make sense of their world and experiences. It provides identity
and values which drives an individual’s decision making process and social
behaviour. As such, a corporation’s processes and policies that incorporates
the influence of subjective norms and attitudes will be more effective in the
utilisation of whistleblowing as a means of internal control. Whistleblowing
thrives in an environment of inclusiveness and collectivism.

            Culture is defined as the ideas, customs, and social behaviour of a particular
people or society, while socialisation is defined as the process of learning to
behave in a way that is acceptable to society. We look at the impact culture
and socialisation has on “blowing the whistle” in the organisation. According
to (Richard G. Brody; John M. Coulter; Suming Lin) “Society continues to be concerned about the impact of ethics on
decision making”, but we would need to go one step further and look closer at
how culture, norms and how our socialisation from birth and throughout our
adolescence and adult years helps to shape and impact our ethical and moral
decisions to embrace a whistleblowing phenomenon. 

With the highest of ethical standards that one may possess, what is
customary and normal, how things are done in and around us, in our country,
community, school or workplace, has the potential to outweigh any ethical or
moral high road we wish to walk.

Geert Hofstede a known Dutch researcher of culture defines culture as
“the collective programming of the mind which distinguishes the members of one
group or category of people from another. His cultural dimensions theory
describes the effects of a society’s culture on the values of its members and
how these values relate to behaviours”. 
His study focused on the multiple ways countries vary in terms of
culture (Brody; Coulter; Lin) e.g., USA and Taiwanese accounting students and their approach to
whistle blowing.

an extensive research program Hofstede (1980, 1991) particularly the
“Individualism” category between the US and Taiwanese accounting students, the
study found that Taiwan students had a low individual rating, indicating that
the focus was more on them and their individual achievement and protecting
their own interest, while the US scored highest on this measure. This result
indicates that Taiwan has a collective culture, wherein participation in and
protection of one’s in-group is a central value. This may affect audit practice
as the conclusion is that collectivist auditors may be less apt to ask clients
for “private” information or to report to an outside audit committee on
weaknesses in a client’s internal control system” (e.g., Cohen et al., 1993), (Brody; Coulter; Lin).

decision to “blow the whistle” (Miethe and Rothschild, 1994) on an organization
or an employee whether internally or externally has costs benefits associated
with such a decision. The fear of been branded the “Snitch” “Informer”,
side-lined, victimized or fired from the workplace are major factors an
individual will consider before he considers carrying out such an act. His
socialization, who his friends are, their opinion, what is normally uttered in
the streets, how his peers will view him are all factors of is culture and
socialization. The past examples of similar acts carried out by associates and
any subsequent unpleasant repercussions towards that individual undoubtedly
will play a major role in the decision to blow the whistle as well.


to these life altering, personal and professional implications, such as
dismissal or otherwise retaliated upon (e.g., Finn, 1995; Glazer and Glazer,
1989), coworkers who fear retaliation from management may also avoid
whistle-blowers (Miceli and Near, 1992) or feel that the whistle-blower has
betrayed a trust with the organisation (Dandekar, 1991). This again could be
seen as a direct link between cultural norms and socialisation – not desiring
to be labelled or associated with the “traitor” or as in the study on the
Taiwanese accounting students “saving face”.


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