UNIVERSITY OF WEST LONDON 

| date
Contents
1. Introduction.........................................................................................................................................3
I. Background......................................................................................................................................3
II. Professional Accountants in business in Sri Lanka...........................................................................4
2. Research Problem................................................................................................................................4
3. Research Questions.............................................................................................................................5
4. Objectives of the research...................................................................................................................5
5. Literature Review................................................................................................................................6
I. Whistleblowing................................................................................................................................6
II. Internal vs external whistleblowing.................................................................................................6
III. Whistleblowing Intention............................................................................................................7
IV. Demographic Variables................................................................................................................8
V. Organizational variables..................................................................................................................9
6. Methodology.....................................................................................................................................11
I. Conceptual Framework..................................................................................................................11
II. Hypothesis Formulation.................................................................................................................11
III. Research Design.........................................................................................................................12
IV. Sample Selection........................................................................................................................13
V. Data collection and analysis...........................................................................................................13
VI. Limitations of the study.............................................................................................................13
7. Time plan...........................................................................................................................................13
8. References.........................................................................................................................................14

List of Figures
Figure 1: Conceptual Framework...............................................................................................................11
Figure 2: Research Onion Model...............................................................................................................12

UNIVERSITY OF WEST LONDON | date

 1. Introduction
I. Background

Several international corporate giants who were believed to have lucrative earnings and was striving
success were heard collapsed overnight or declared insolvent due to their involvement in fraud or
unethical conduct deceiving the shareholders and stakeholders at large. Corporate scandals such as
Enron scandal 2001, Lehman Brothers filling Bankruptcy in 2008, WorldCom 2001 manipulation of
financials are ideal examples of these malpractices happening in the corporate world. (Hail, Tahoun and
Wang, 2018). Most of these devastating cases reported around the globe has happened with the
knowledge and involvement of the top management who has failed to act in good faith to it’s
stakeholders and public, deceiving them by producing manipulated financial reports to cover the real
status of the company. Furthermore, all these instances were operated out of the radar of the
regulatory frameworks, where the relevant authorities including the professional accountants in public
practice were in fail to prevent the turmoil. (Rajeevan, 2019).

According to 2020 Report on nations published by the Association of Certified Fraud Examiners, 5% of
the global corporate frauds are happening in south Asian region. Financial crimes and scandals are no
new terms to the sri Lankan corporates. Several associated incidents were reported over the past two
decades in relations to organizations such as Lanka Marine Services Ltd, Pramuka Bank, Golden Key
Credit Card Company, S. R. Property Sharing Investment (Private) Limited, where public wealth were
largely mishandled or stolen, and manipulated financial reports to obtain undue personal or corporate
advantages. (Rajeevan, 2019). ACFE 2020 Report to the Nations highlights that on average basis
companies around the world loose close to 5% of their revenue each year due to fraud.

According to SLAUS 240 the term fraud in corporate context involves fraudulent financial reporting
and /or misappropriation of assets. Fraud can be detected by several means, such as a tip or a
complaint, by conducting an audit procedure, monitoring or by chance etc (Fraud examiners manual,
2017) According to the ACFE 2020 Report to the Nations Close to 43% of the frauds being detected are
owing to a tip given by an employee, customer, or vendor. Out of which more than 50% are from
internal employees. Fraud investigations carried out using the tips given by employees are considered as

UNIVERSITY OF WEST LONDON | date

the most effective, as the employees are aware of the operation and activities of the organization (ACFE,
rep. 2010; Dyck et al. 2010)
As per the section 360 of The Code of Ethics issued by Institute of Chartered Accountants of Sri Lanka
responding to NOCLAR, If a professional accountant in business encounter or be made aware of any
fraud, corruption or bribery, he has the responsibility of reporting the matter to the appropriate
authority or alerting the related parties and act on public interest to comply with the fundamental
principal of integrity and be fully indemnified by the code in case of confidentiality breach

II. Professional Accountants in business in Sri Lanka

There are close to 3Mn of professional accountants in the word belongs to IFAC Member bodies.
Majority of them are accountants of business. In the Sri Lankan context, IFAC member bodies includes
members of Institute of Chartered Accountants of Sri Lanka , Association of Accounting Technicians of
Sri Lanka ,Institute of Certified Management Accountants of Sri Lanka (CMA Sri Lanka) . (IFAC, 2020).
Apart from this, there are thousands of accounting professional working in sri Lankan organizations who
are members of IFAC recognized bodies such as Chartered institute of management accountants UK,
Association of Chartered Certified Accountants UK etc. According to Gunasena, (2019) there are 13,040
qualified accountants in Sri Lanka working in both government and corporate sector.

2. Research Problem

With the rise of corporate scandals, whistleblowing is recognized as an important monitoring

mechanism to detect and prevent fraud. Emergence of major financial frauds in the sri Lankan
corporate context such as, Pramuka Bank, S. R. Property Sharing Investment (Private) Limited,
Sampath Bank PLC, Golden Key Credit card company suggests that, embedding a whistleblowing
practice to the Sri Lankan corporate culture is crucial to avoid businesses going bankrupt in the
blink of an eye and public money being mishandled when there were ample of ways to avoid such
disasters . Hence, it is crucial to first recognize prevalence of what factors would enable the
organization to successfully incorporate whistleblowing culture in the organization. Professionals in
the finance field has an ethical duty to act in good faith of the public and put one step ahead in
mitigating these types of crises.

UNIVERSITY OF WEST LONDON | date

Even though number of studies have been carried out to derive whistleblowing intentions of the
financial professionals most of them were focused on accountants in public practice/ Externa
Auditors. Very limited research has been done to cover the whistleblowing intention of the
accountants working inside the businesses. Further with reference to the research done by
Association of Certified Fraud Examiners, the report to nations 2020 states, more than 50 % of tips of
fraud comes from internal employees. Existing literature suggests that willingness to report fraud comes
from personal attributes and organizational factors

There exists an empirical research gap identified in Rajeevan (2019) to test the impact of organizational
variables on whistleblowing intention among the accountants in the Mercantile sector of Sri lanka which
was suggested as a future research area to proceed with. Thus this study intends to address this gap in
the academic literature.

Hence the problem statement can be derived as;

“How does Demographic variables and Organizational variables can have an impact over external and
internal whistleblowing intention of accountants in business in Sri Lanka”

3. Research Questions

Based on the research gap found, the derived research questions are as follows,

1. What is the nature of relationship between personal and organizational factors on

whistleblowing intentions of Accountants In Business in Sri Lanka?
2. What are the key factors affecting the whistleblowing intentions of Accountants In Business in
Sri Lanka?
3. What recommendations can be given to embed whistleblowing culture in Sri Lankan
Corporates?

4. Objectives of the research

UNIVERSITY OF WEST LONDON | date

 1. To understand the relationship between personal and organizational variables on
whistleblowing intentions of Accountants in business

2. To understand the key factors affecting the whistleblowing intentions of Accountants in business
in Sri Lanka.
3. To provide recommendations on how to embed whistleblowing culture in Sri Lankan Corporates.

5. Literature Review

I. Whistleblowing

The birth of whistleblowing comes from sports, where the referees blow the whistle to indicate any
violation of rules (Qusqas and Kleiner, 2001). The ideal definition for whistleblowing in accounting
research was derived in the study of Near and Miceli, 1985. According to this study whistleblowing has 4
elements whistleblower the whistle blowing act, the party to whom the complaint has been made and
the relevant organization. Since then number of scholars have defined the act of whistleblowing with
reference to different aspects within business organization. In the study of Park et al. (2008) defined
Whistleblowing as reporting of a wrongdoing to an individual or organization believed to have the
power to act against it. Robinson et al. (2011) Defines whistleblowing as a “communication process,
which focuses on reporting potentially illegal or inappropriate acts related to a specific organization, to
agents acting on behalf of the organization, or to an empowered entity”.

II. Internal vs external whistleblowing

Whistleblowing can be internal or external depending on the party to whom the complaint is made
Erkmen et al. (2014). Whether the misconduct is disclosed to an individual inside the organization, such
as senior management, it is called internal whistleblowing and if the complaint is made to an
independent body such as government or law enforcement department, it is called external
whistleblowing (Dasgupta and Kesharwani, 2010). In the study of Latan, Ringle and Jabbour (2016) it
evaluated the relationship between individual levels of antecedents and how the internal and external
whist blowing intentions were affected by them.

UNIVERSITY OF WEST LONDON | date

III. Whistleblowing Intention

Various studies has examined several determinants of whistleblowing intention and has developed
several academic models to evaluate it based on the foundation laid from the study of Near and Miceli s
1985. These models have been used to identify and test personal characteristics and attitudes of the
whistleblower, organizational variables and situational factors against the whistleblowing intention of
individual in both internal and external context.

The below table represents a summary of determinants considered by different authors for
whistleblowing intentions.
Author Determinants
Near and Miceli, (1985) Motivation for action, the circumstances surrounding
the questionable activity, individual characteristics,
power relations.

Sims, R. L., & Keenan, J. P. (1998) Organizational variables (Degree of supportiveness,

the role formal and informal company policies )
Interpersonal variables ( gender, age, education,
organizational tenure, degree organizational
commitment, job satisfaction, and individual values.
Kaptein (2010) Gender, age , tenure, hierarchical level, size of their
organization and eight dimensions of ethical culture of
an organization Clarity, Congruency local
management , Congruency senior management
,Feasibility , Supportability -,Transparency
,Discussability ,Sanctionability,

Gregory A. Liyanarachchi & Ralph Adler Demographic characteristics of the whistleblower

(2011)
Alleyne, P., Hudaib, M., & Pike, R. (2013)
Gao, Lei & Brink, Alisa. (2017).
(gender & age group)
Attitudes toward whistleblowing, Perceived behavioral
controls, independence commitment, personal
responsibility for reporting, and Personal cost of
reporting.
characteristics of the whistleblower, characteristics of

UNIVERSITY OF WEST LONDON | date

 the report recipient, characteristics of the wrongdoer.
characteristics of the organization
Rajeevan (2019) employee training on ethics, availability of reporting
channel, organizational policies and climate,
safeguards for whistleblowing, organizational climate
and process

IV. Demographic Variables

There exists number of studies conducted with much attention given to demographic factors/ personal
characteristics of individuals and their propensity to whistle blow. The following table gives a summary
of some important findings of few authors in the existing literature on demographic variables and its
impact on whistleblowing intention.

Variable Source Finding

Gender Sims and Keenan Gender is considered as an important predictor of whistle blowing
(1998) preference, age, organizational tenure, were not found to be
significant factor affecting the whistleblowing intention.
Age Gregory A. Middle-aged accountants are unlikely to blow the whistle Though,
Liyanarachchi & male accountants who are in the carrier's early stages more prone to
Ralph Adler blow the whistle than female accountants.
(2011)
Tenure Kaptein, M. There is a strong connection between tenure and whistleblowing,
(2010) since younger driven employees tend to be more focused on
progressing their jobs within the organization

V. Organizational variables

Research on whistleblowing and influence of organizational variables are emerging as a distinctive area
of study as prior researches conducted are often inconclusive. Following table illustrates how the
organizational variables and its impact on whistleblowing has been tested in the existing literature.

Employee Training Program

Source Finding

UNIVERSITY OF WEST LONDON | date

 Latan, H., Ringle, C. and
Jabbour, C., 2016
Shanmugavel Rajeevan
(2019)
Bolli, T. and Hof, S. (2014),
Availability of Reporting channel.
Source
Kaplan and Schultz (2007
Brennan, Niamh M. and
Kelly John, 2007
Utami, Ni, Irianto Gugus
and Prihatiningtias Yeney.
(2020)
Organizational policies
Source
Sims and Keenan (1998)
Barnett, Cochran and
Taylor (1990)
Shanmugavel Rajeevan
(2019)
Safeguards for whistleblowing
Source
Suggested that a training curriculum is required to provide auditors
with advice about how to overcome the ethical problems and
strengthen their professional attitude.
Study found that in-house training alone is not necessary to promote a
whistleblowing attitude. Employees with professional education and
training in audit firms are more aligned with whistleblowing intentions
Indicated that training programs and apprenticeship has an impact on
moral judgement of an individual and intern affect the whistleblowing
intention.
Finding
Noted that the presence of an anonymous reporting channel promotes
misconduct disclosure compared to non-anonymous reporting
Emphasized establishing an effective internal reporting channels is
important to encourage employees to reveal come forward and reveal
any misconduct
Found that individuals in organizations where there is a defined channel
of reporting of misconduct was positively related to whistleblowing
intention
Finding
Emphasize the importance of clear organizational policies when resolving
ethical issues in the organization.
Found that existence of defined policies and practices will result in
lessened fear of retaliation in the face of any misconduct.
It was revealed that company policies would encourage them externally
blow the whistle and helps in successfully resolve ethical dilemmas
Finding
UNIVERSITY OF WEST LONDON | date
 Latan, H., Ringle, C. and
Jabbour, C., 2016
Kaplan, S.E., Pany, K.,
Samuels, J.A. and Zhang, J.
(2009)
Shanmugavel Rajeevan
(2019)
Organizational climate and processes
Source
Kaptein, Muel. (2011).
Taylor and Curtis, 2013
Gao, Lei & Brink, Alisa.
(2017)
Audit firms need to put safety net to protect the whistleblowers and
reduce their fear for reporting. Anonymity need to be encouraged
Intentions to disclose a fraudulent act is higher with poorer state of
safeguards than with better protections being present. It also revealed
that willingness to report a misconduct under an internally administered
hotline was stronger.
Study revealed that having safeguards are not effective to determine the
whistleblowing intention of individuals
Finding
Discussed the influence of organization’s ethical culture on employee
responses to observed misconducts
Revealed that, employees in organizations which have a sound adherence
to ethics and taking swift actions against any fraudulent activity are more
likely to report and blow the whistle in the face of any misconduct.
The study revealed that presence of monetary rewards from the
organization for reporting any misconduct has a higher impact on
employees willingness to report it.
UNIVERSITY OF WEST LONDON | date
 6. Methodology
I. Conceptual Framework

Figure 1: Conceptual Framework

Source: Compiled by the author

II. Hypothesis Formulation

The following hypothesis are deduced with the reference to the developed conceptual framework.

H1: There is a direct relationship between Employee Training and whistleblowing intention of
Accountants in Business.

H2: There is a direct relationship between Availability of a Reporting Channel and whistleblowing
intention of Accountants in Business.

H3: There is a direct relationship between Organizational Policies and whistleblowing intention of
Accountants in Business.

H4: There is a direct relationship between Safeguards for whistleblowing and whistleblowing intention
of Accountants in Business.

H5: There is a direct relationship between Organization climate & process and whistleblowing intention
of Accountants in Business.

H6: There is a direct relationship between Gender and whistleblowing intention of Accountants in
Business.

H7: There is a direct relationship between Age group and whistleblowing intention of Accountants in
Business.

H8: There is a direct relationship between Tenure and whistleblowing intention of Accountants in
Business.

UNIVERSITY OF WEST LONDON | date

III. Research Design

The applicable philosophy and methodology used in this study will be discussed with reference to the
research onion model. According to Cools and Bellens, (2012) Onion model assist in distinguishing the
research concepts and provide a meaningful approach to conduct studies.

Figure 2: Research Onion Model

Source: Cools and Bellens, (2012)

Layer Technique Justification

Philosophy Positivism This is an empirical study to find a relationship between
two variables using a quantitative approach of data analysis
Approach Deductive This study explores variables of established academic
models and apply it to the sri Lankan context to test the
validity.
Methodological Choice Mono The study intends to use Quantitative approach to collect
Method
and analyze data
Quantitative
Strategy Survey A self-administered questioner will be used to gather data
Time Horizon Cross The study focuses on survey results generated at a specific
Sectional
period

UNIVERSITY OF WEST LONDON | date

 IV. Sample Selection

There are 13,040 qualified accountants in sri Lanka who are members of either one of the three IFAC
member bodies in Sri Lanka namely Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka),
Institute of Certified Management Accountants of Sri Lanka (CMA Sri Lanka) and the Association of
Accounting Technician of Sri Lanka (AAT Sri Lanka) (Gunasena, 2019). According to the online sample
generator (https:/www.surveysystem.com/), the recommended sample size is 373 (confidence level:
95%) sample would be randomly chosen.

V. Data collection and analysis

A detailed self-administrated questionnaire is to be developed using scales from previous studies which
have been tested for reliability and variability, to collect the data. The study intends to use a
quantitative analytical approach and therefore expects to utilize Statistical package for Social Sciences
(SPSS) in order to analyze the data to be collected through the survey questionnaire. The researcher
intends to use both descriptive statistics, and inferential statistics to derive conclusions for the study.

VI. Limitations of the study

The study is limited to only five catalysts as far as organization is concerned and three demographic
components. However, the study fails to take into account the emotional and psychological dimensions
of employees and their effect on the decision to blow the whistles in the face of wrongful act.

The study is only limited to assess the whistleblowing intention of Accountants in Business however the
role and involvement of other professionals in the business was not taken into consideration.

7. Time plan

Task June July Aug Sep

Meet supervisor to discuss the research topic
Supervisor meeting and progress reporting
Developing the questionnaire
Supervisor meeting and progress reporting
Data Collection
Data Analyzing
Supervisor meeting and progress reporting
Submission of the draft

UNIVERSITY OF WEST LONDON | date

Completion and submission

8. References

Alleyne, P., Hudaib, M., & Pike, R. (2013). Towards a conceptual model of whistle-blowing intentions
among external auditors. The British Accounting Review, 45(1), 10–23.

Brennan, Niamh M. and Kelly, John, A Study of Whistleblowing Among Trainee Auditors (2007). British
Accounting Review, Vol. 39, No. 1, pp. 61-87, March 2007. Available at
SSRN: https://ssrn.com/abstract=2257479

Bolli, T. and Hof, S. (2014), “The Impact of Apprenticeship Training on Personality Traits: An
Instrumental Variable Approach”, SSRN

Cools, E. and Bellens, K., 2012. The onion model: Myth or reality in the field of individual differences
psychology?. Learning and Individual Differences, 22(4), pp.455-462.

Dasgupta, S. and Kesharwani, A. (2010), “Whistleblowing: a survey of literature”, The IUP Journal of
Corporate Governance, Vol. 9 No. 4, pp. 57-70.

Erkmen, T., Özsözgün Çalışkan, A. and Esen, E. (2014), "An empirical research about whistleblowing
behavior in accounting context", Journal of Accounting & Organizational Change, Vol. 10 No. 2, pp. 229-
243. https://doi.org/10.1108/JAOC-03-2012-0028

Gao, Lei & Brink, Alisa. (2017). Whistleblowing Studies in Accounting Research: A Review of
Experimental Studies on the Determinants of Whistleblowing. Journal of Accounting Literature. 38.
10.1016/j.acclit.2017.05.001.

Gunasena, H., 2019. Critical review of accountancy education in Sri Lanka. Daily Financial Times,.

HAIL, L., TAHOUN, A. and WANG, C., 2018. Corporate Scandals and Regulation. Journal of Accounting
Research, 56(2), pp.617-671.

IFAC. 2020. IFAC. [online] Available at: <https://www.ifac.org/> [Accessed 5 May 2020].

IFAC. 2020. Sri Lanka. [online] Available at: <https://www.ifac.org/about-ifac/membership/country/sri-

lanka> [Accessed 7 May 2020].

Kaptein, Muel. (2011). From Inaction to External Whistleblowing: The Influence of the Ethical Culture of
Organizations on Employee Responses to Observed Wrongdoing. Journal of Business Ethics. 98. 513–
530. 10.1007/s10551-010-0591-1.

Kaplan, S.E., Pany, K., Samuels, J.A. and Zhang, J. (2009), “An Examination of the Effects of
Procedural Safeguards on Intentions to Anonymously Report Fraud”, AUDITING: A
Journal of Practice & Theory, Vol. 28 No. 2, pp. 273–28

UNIVERSITY OF WEST LONDON | date

Latan, H., Ringle, C. and Jabbour, C., 2016. Whistleblowing Intentions Among Public Accountants in
Indonesia: Testing for the Moderation Effects. Journal of Business Ethics, 152(2), pp.573-588.

Near, J. and Miceli, M., 1985. Organizational dissidence: The case of whistle-blowing. Journal of Business
Ethics, 4(1), pp.1-16.

Near, J.P., Baucus, M.S., Miceli, M.P., 1993. The relationship between values and practice: Organizational
climates for whistleblowing. Administration & Society 25 (2), 204-226

Park, H., Blenkinsopp, J., Oktem, M.K. and Omurgonulsen, U. (2008), “Cultural orientation and attitudes
toward different forms of whistleblowing: a comparison of South Korea, Turkey, and the UK”, Journal of
Business Ethics, Vol. 82, pp. 929-939.

Qusqas, F. and Kleiner, B.H. (2001), “The difficulties of whistleblowers finding employment”,
Management Research News, Vol. 24 Nos 3/4, pp. 97-100.
Rajeevan, S., 2019. Building a bulletproof whistleblowing environment: an accountant’s
perspective. Asian Journal of Accounting Research, ahead-of-print(ahead-of-print).

Robinson, Shani & Robertson, Jesse & Curtis, Mary. (2012). The Effects of Contextual and Wrongdoing
Attributes on Organizational Employees’ Whistleblowing Intentions Following Fraud. Journal of Business
Ethics. 106. 213-227. 10.1007/s10551-011-0990-y.

Sims, R.L., Keenan, J.P. Predictors of External Whistleblowing: Organizational and Intrapersonal
Variables. Journal of Business Ethics 17, 411–421 (1998). https://doi.org/10.1023/A:1005763807868

Taylor, E.Z. and Curtis, M.B. (2013), “Whistleblowing in Audit Firms: Organizational Response
and Power Distance”, Behavioral Research in Accounting, Vol. 25 No. 2, pp. 21–43.

Utami, Ni & Irianto, Gugus & Prihatiningtias, Yeney. (2020). Analyzing the effect of financial reward,
personal cost and reporting channel on whistleblowing intentions utilizing an experimental study.
International Journal of Research in Business and Social Science (2147- 4478). 9. 125-132.
10.20525/ijrbs.v9i2.614.

2015. The Roles And Domain Of The Professional Accountant In Business. Professional Accountants in
Business Committee- International Federation of Accountants.

2017. Fraud Examiners Manual. Austin: Assn Of Certified Fraud E .

UNIVERSITY OF WEST LONDON | date