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Department of Accounting Studies, School of Management, 2 Cynthia Cooper was the whistleblower in the WorldCom fraud.
Universite´ du Que´bec a` Montre´al, Montreal, Canada Sherron Watkins was the whistleblower in the Enron fraud.
96 N. Smaili, P. Arroyo
to the SEC involves corporate disclosures and financials individual to blow the whistle. Using 11 Canadian firms
(16.9%). exposed by different whistleblowers for fraudulent finanRecent studies have examined whistleblower types cial statements, we compare the three elements of the tri-
(Chen and Lai 2014; Watts and Buckley 2015; Culiberg angle by type of whistleblower (insiders and outsiders). In
and Mihelic 2016). Watts and Buckley (2015) argue that addition, we establish a new categorization of whistlerecognizing that different types of whistleblowers exist blowers and delve into their decision-making process.
may help explain inconsistent results obtained in regard to Canada offers an interesting context for the study of
whistleblowing intentions. Chen and Lai (2014) suggest whistleblowing because Canadian regulatory responses to
classifying whistleblowers into four conceptual types (in- financial scandals better reflect the status of international
different, rebel, mature, and spoiled). As this prior litera- regulations on this issue. In addition, reaction to financial
ture is limited to the study of inside whistleblowers scandals in Canada has been less aggressive than in the
(employees), Culiberg and Mihelic (2016) emphasize that USA. For instance, in the USA, the SEC enhanced the role
‘‘introducing different types of whistleblowers provides of the whistleblower through the Sarbanes–Oxley Act in
additional opportunities for inspection,’’ suggesting that 2002 to provide stronger encouragement and enhanced
‘‘more comparative studies of internal/external whistle- protection for whistleblowers. In 2010 section 922 of the
blowing be undertaken.’’ Dodd–Frank Wall Street Reform and Consumer Protection
Given the importance of whistleblowing in detecting Act established important new provisions for whistlefraudulent financial statements and the increase of different blowers. In Canada, Multilateral Instrument 52-110,
types of whistleblowers, the following legitimate questions approved in 2003, mainly concerns audit committees,
arise about these actors and whistleblowing itself: (1) Who which must adopt procedures regarding ‘‘the confidential,
are the whistleblowers (identity/type)? (2) What channels anonymous submission by employees of the issuer of
are used by whistleblower type? and (3) What are concerns regarding questionable accounting or auditing
whistleblowers’ incentives/pressures, opportunities, and matters’’ (OSC 2004). Similarly to the Sarbanes–Oxley
rationalization, and how do these factors impact their Act, Multilateral Instrument 52-110 emphasizes the role of
selection of whistleblowing channel? In line with prior the audit committee in whistleblowing, thereby assuming
literature, we posit that these questions should be examined that the audit committee has sufficient power and can act
together and over time to shed light on the whistleblowing with some degree of independence (OSC 2004).3
decision-making process, as suggested by Culiberg and Although prior studies that examined whistleblowing in
Mihelic (2016). Canada mainly featured comparative cultural and regulaThese questions have already received considerable tory analyses (MacNab and Wortley 2008; MacNab et al.
individual attention in academic circles, with researchers 2007; Thomas 2005; Lindsay et al. 1996), they also disexamining the antecedents of whistleblowing and sug- cussed federal whistleblower protection (Saunders and
gesting that individual, situational, and environmental Thibault 2010; Luframboise 1991). Our study, coinciding
factors impact whistleblower behavior (Near and Miceli with the implementation of two separate whistleblower
1985; Miceli and Near 1992, 1994; Mesmer-Magnus and policies enacted, respectively, by the Ontario Securities
Viswesvaran 2005; Latan et al. 2016; Culiberg and Mihelic Commission (OSC) and the Autorite´ des Marche´s Finan2016). Other studies have concentrated on the type of ciers (AMF—the financial market authority of the Province
whistleblowing channels selected by whistleblowers of Que´bec, Canada), extends state-of-the art research on
(Dworkin and Baucus 1998; MacNab and Worthley 2008; whistleblowing by providing evidence from Canadian
Miceli et al. 2001; Culiberg and Mihelic 2016), with their financial statement fraud cases.
primary focus being on insiders (former or current We contribute to the whistleblowing literature in several
employees), although a few did include outsiders as well ways. First, our study helps fill the gap recently pointed out
(Ayers and Kaplan 2005; Taylor and Curtis 2010; Dyck in the whistleblowing literature (Culiberg and Mihelic
et al. 2010; Miceli et al. 2014; Culiberg and Mihelic 2016). 2016) by investigating the antecedents and decisionWe agree that further work is needed to examine the
motivations that prompt different types of whistleblowers 3 In October 2015, the OSC published the ‘‘Proposed OSC Policy to expose fraudulent financial statements. The objective of 15-601 Whistleblower Program’’ (OSC 2015), designed to encourage the current study is thus to expand existing knowledge the report of instances of serious securities-related misconduct in
about whistleblower behavior by conducting a comparative Ontario to the OSC. Under the proposed policy, ‘‘if there is an award
analysis to examine the incentives/pressures, opportunities, eligible outcome, eligible whistleblowers could receive up to a
maximum of $1.5 million regardless of whether the OSC recovers and rationalization involved. For the purpose of our sanction monies ordered, and up to a maximum of $5 million if the research objective, we propose using the whistleblowing OSC does recover funds.’’ The OSC launched the whistleblower
triangle as a model to explain the factors that can induce an program in 2016.
Categorization of Whistleblowers Using the Whistleblowing Triangle 97
making process of different types of whistleblowers using mainly from the identity of the recipient of the complaint
an integrative approach. It examines the identity and types (reporting channel). For instance, if the whistleblower
of whistleblowers, the whistleblowing channel chosen by directs his or her revelations to persons within the orgatype of whistleblower, and whistleblowers’ pressures/in- nization such as top management, the audit committee, or
centives, opportunities, and rationalization. Second, this direct supervisors, the complainant is called an internal
investigation takes prior studies one step further by iden- whistleblower. If the whistleblower turns to an external
tifying whistleblowers not only by their intrinsic charac- body such as the media, the government, or any law
teristics, but also by their motivations. Accordingly, we enforcement agency, the complainant is considered an
introduce a new categorization of whistleblowers. In external whistleblower (Bouville 2007; Near and Miceli
addition, by comparing whistleblower types, we provide 1996; Ponnu et al. 2008). However, recent studies also
new insight into the motivations that prompt each category suggest classifying whistleblowers as insiders or outsiders
of whistleblower to reveal wrongdoing. Third, as pointed based on the position from which they observe an act of
out by Culiberg and Mihelic (2016), we investigate actual wrongdoing (Dyck et al. 2010; Culiberg and Mihelic 2016).
whistleblowing cases rather than hypothetical ones. We One of the most widely adopted definitions originates
conduct comparative analyses over time to obtain an in- from Near and Miceli (1985), who describe whistleblowing
depth picture, an approach that provides new awareness of as ‘‘the disclosure by organization members (current or
the dynamic relation between whistleblowers. We note former) of illegal, immoral or illegitimate practices under
when a case involves more than one whistleblower and the control of their employers, to persons or organizations
observe the influence of previous whistleblowers’ disclo- that may be able to effect action’’ (p. 4). Other scholars,
sures in further accusations. including De Maria

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