The Effect of Social Confrontation on Individuals' Intentions to Internally Report

Abstract

Fraudulent activity is often first discovered by employees. Gaining an understanding of how meeting with the transgressor to discuss the apparent fraud ("social confrontation") influences individuals' likelihood of reporting fraud to internal recipients is particularly important for various stakeholders interested in the early reporting of fraud. Using an experimental approach, this study provides evidence on the extent to which unsuccessful social confrontation with one's supervisor regarding apparent fraud influences reporting intentions to two different, but plausible, internal report recipients: the supervisor's supervisor and an internal auditor.