The intention to report fraud: Anonymous reporting channel in a China company

Abstract

With the increase of financial fraud occurred in companies and the rising difficulty to detect, it is significant for companies to set up internal reporting program. As previous study shows that anonymous reporting channels encourage more employees to report, at least the intention to report, so this study addresses the related field and extends it to other issues may influence reporting intention. This study examines whether the reporting intention is increased by anonymous reporting channels under the influence of an environmental factor (tone at the top) and an individual factor (proactivity). The results prove that reporting intention is higher for anonymous reporting channels than non-anonymous channels. In the meantime, if a company has aggressive tone at the top, anonymous reporting channels are more preferred; if a whistleblower has low proactive, they are more willing to choose anonymous channels. The ancillary result is no major difference is found between non-anonymous channel and anonymous to a supervisor, which is different from results found by the westerns.