Attributes of Whistleblowing System and Detection of Occupational Frauds with the Moderating Role of Audit Committee

Abstract

This study aims to investigate the effect of the attributes of the whistleblowing system, i.e., anonymous reporting channel (ARC), job security (JS) for the whistleblowers, and previous outcome of the whistleblowing (PWB), on the detection of occupational fraud (DOF), and the moderating role of the audit committee (AC) in the relationship between these attributes and DOF. A data sample of 413 individuals working in the accounts, finance, and audit departments of companies listed on the Pakistan Stock Exchange (PSX) was collected. For data analysis, the PLS-SEM technique was chosen by using Smart PLS software. The findings of the study showed that ARC, JS for the whistleblowers, and PWB positively and significantly affect the DOF in the organization. The AC also plays a significant role as a moderator in the relationship between these attributes and DOF. The current study highlights the implications and guidelines for managers, audit firms, investors, policymakers, and regulatory authorities to understand the crucial role and significance of the whistleblowing system in detecting occupational fraud and to identify ways to enhance its effectiveness and efficiency.