Abstract
We examine the role of the audit committee in their oversight of whistle-blowing. Our study examines whether the quality of the audit committee, captured by its independence, expertise, and diligence, is associated with two whistle-blowing outcomes: the choice of reporting channel (external whistle-blowing versus internal reporting) and the likelihood of retaliation against the whistle-blower. Using a sample of internal and external whistle-blowing cases, we find that a high-quality audit committee reduces the probability that misconduct is reported externally relative to internally, and reduces the probability that a whistle-blower experiences retaliation. We further find that a higher-quality audit committee is associated with the implementation of a stronger internal whistle-blowing system, which in turn reduces the likelihood of external relative to internal reporting. Together, our findings suggest that a high-quality audit committee helps to ensure that whistle-blowing disclosures are received and resolved through internal channels.
Original language | English |
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Pages (from-to) | 167-189 |
Number of pages | 23 |
Journal | Auditing |
Volume | 37 |
Issue number | 1 |
DOIs | |
Publication status | Published - Feb 2018 |