Intentions to report questionable acts: An examination of the influence of anonymous reporting channel, internal audit quality, and setting

Steven Kaplan, Joseph J. Schultz

Research output: Contribution to journalArticlepeer-review

90 Scopus citations


The Sarbanes-Oxley Act of 2002 requires audit committees of public companies' boards of directors to install an anonymous reporting channel to assist in deterring and detecting accounting fraud and control weaknesses. While it is generally accepted that the availability of such a reporting channel may reduce the reporting cost of the observer of a questionable act, there is concern that the addition of such a channel may decrease the overall effectiveness compared to a system employing only non-anonymous reporting options. The rationale underlying this concern involves the would-be reporter's likelihood of reporting, the seriousness with which the organization treats an anonymous report, and the organization's ability to thoroughly follow-up the report. Thus, we explore the extent to which the availability of an anonymous reporting channel influences intended use of non-anonymous reporting channels. Further, in response to Sarbanes-Oxley and the environment of financial scandals that led to its passage, many firms are strengthening their internal audit departments, and providing them with greater independence from upper management's direct control. Accordingly, our examination tests whether the intended use of the internal audit department as an internal reporting channel is greater when the internal audit department is of "high" versus "low" quality. Finally, the study investigates intended reporting behavior across three different cases (e.g., settings). Results show that the existence of an anonymous channel does reduce the likelihood of reporting to non-anonymous channels, that generally the internal audit department quality does not affect reporting to non-anonymous channels, and that case-setting affects the type of channel to be used. Implications from the study are discussed.

Original languageEnglish (US)
Pages (from-to)109-124
Number of pages16
JournalJournal of Business Ethics
Issue number2
StatePublished - Mar 2007


  • Internal audit department quality
  • Questionable acts
  • Reporting intentions

ASJC Scopus subject areas

  • Business and International Management
  • General Business, Management and Accounting
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law


Dive into the research topics of 'Intentions to report questionable acts: An examination of the influence of anonymous reporting channel, internal audit quality, and setting'. Together they form a unique fingerprint.

Cite this