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LEARNING THE ELEMENTS OF QUALITATIVE APPLIED BUSINESS RESEARCHReview the Smaili and Arroyo article, Categorization of Whistleblowers Using the Whistleblowing Triangle, attached.Compose a formal, APA-formatted paper of no more than 700 words (word count excluding title and reference pages) that:Assesses the article by providing justification for regarding it as peer reviewed.Articulates the business problem identified by the source and argues why the study is an example of applied business research by presenting the context and setting as described by the author.Constructs an understanding of the authors research purpose based on the stated business problem.Include an APA-formatted figure, in addition to the written synthesis, to demonstrate fully your ability to synthesize ideas.Incorporate the figure into the body of the composition, not presented as an attachment or appendix document.Identifies the specific research method of the study and articulates the authors reasoning for this selection as appropriate for the studys purpose.Critiques the authors rationale for the worth or value of researching the business problem.Critiques the authors academic foundation for the study in that the research upon which the study seeks to build is appropriate for the business problem.ADDITIONAL REQUIREMENTSAssignment should meet the following requirements:Written Communication: Written communication is free of errors that detract from the overall message, follows standard American English usage, and uses language appropriate for the intended business and scholarly doctoral audiences.APA format: Paper, references, and citations are formatted according to current APA style and formatting guidelines.Length: 700 words, double-spaced.Font and font size: Times New Roman, 12 point. cf_categorization_of_whistleblowers.pdf Unformatted Attachment Preview J Bus Ethics (2019) 157:95–117 DOI 10.1007/s10551-017-3663-7 ORIGINAL PAPER Categorization of Whistleblowers Using the Whistleblowing Triangle Nadia Smaili1 • Paulina Arroyo1 Received: 17 August 2016 / Accepted: 31 July 2017 / Published online: 5 August 2017  Springer Science+Business Media B.V. 2017 Abstract In view of recent studies that identified certain interest groups as potential whistleblowers, we propose an integrative conceptual framework to examine whistleblower behavior by whistleblower type. The framework, dubbed the whistleblowing triangle, is modeled on the fraud triangle and is comprised of three factors that condition the act of whistleblowing: pressure, opportunity, and rationalization. For a rich examination, we use a qualitative research framework to analyze 11 whistleblowing cases of corporate financial statement fraud in Canada that were publicly denounced between 1995 and 2012. Our analysis indicates that whistleblowers are not only insiders (employees, managers, and shareholders involved in management) but also outsiders [financial analysts (short sellers), auditing firms, journalists, politicians, customers, and investors]. It also suggests that a dynamic relation may exist between whistleblowers. In addition, our findings show that most whistleblowers opt for external channels when they fail to receive an adequate response from management, seek media exposure, are interested in financial benefits resulting from the act of whistleblowing (short sellers), or are interested in protecting their investment. Lastly, we propose categorizing whistleblowers into four conceptual types: protective, skeptical, role-prescribed, and self-interested. Keywords Whistleblower type  Whistleblowing channel  Financial statement fraud Introduction According to a 2016 report published by the Association of Certified Fraud Examiners (ACFE) (2016), which has analyzed at least 2410 cases of occupational fraud1 in more than 114 countries, 39.1\% of fraud cases are detected by a whistleblower. The report states that employees are the source of almost half of all whistleblowing cases that lead to detection of fraud, followed by customers (17.8\%), anonymous (14\%), vendors (9.9\%), shareholders/owners (2.7\%), and competitors (1.6\%). Whistleblowing therefore appears to be an efficient means of shining the spotlight on occupational fraud. Media reports also indicate that whistleblowing has made an impression on public affairs, as demonstrated in Time Magazine’s designation of whistleblowers Cynthia Cooper, Coleen Rowley, and Sherron Watkins as 2002 Persons of the Year.2 Since 2011, whistleblowing cases have skyrocketed in the USA. The Securities and Exchange Commission (SEC) received 3620 whistleblower complaints in 2014 alone, representing a tenfold increase over the 334 complaints received in 2011. According to the 2014 Annual Report to Congress on the Dodd–Frank Whistleblower Program (SEC 2014), the most common whistleblowing complaint & Paulina Arroyo arroyo_pardo.paulina@uqam.ca Nadia Smaili smaili.nadia@uqam.ca 1 Department of Accounting Studies, School of Management, Université du Québec à Montréal, Montreal, Canada 1 The ACFE defines occupational fraud as the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the organization’s resources or assets. 2 Cynthia Cooper was the whistleblower in the WorldCom fraud. Sherron Watkins was the whistleblower in the Enron fraud. 123 96 to the SEC involves corporate disclosures and financials (16.9\%). Recent studies have examined whistleblower types (Chen and Lai 2014; Watts and Buckley 2015; Culiberg and Mihelic 2016). Watts and Buckley (2015) argue that recognizing that different types of whistleblowers exist may help explain inconsistent results obtained in regard to whistleblowing intentions. Chen and Lai (2014) suggest classifying whistleblowers into four conceptual types (indifferent, rebel, mature, and spoiled). As this prior literature is limited to the study of inside whistleblowers (employees), Culiberg and Mihelic (2016) emphasize that ‘‘introducing different types of whistleblowers provides additional opportunities for inspection,’’ suggesting that ‘‘more comparative studies of internal/external whistleblowing be undertaken.’’ Given the importance of whistleblowing in detecting fraudulent financial statements and the increase of different types of whistleblowers, the following legitimate questions arise about these actors and whistleblowing itself: (1) Who are the whistleblowers (identity/type)? (2) What channels are used by whistleblower type? and (3) What are whistleblowers’ incentives/pressures, opportunities, and rationalization, and how do these factors impact their selection of whistleblowing channel? In line with prior literature, we posit that these questions should be examined together and over time to shed light on the whistleblowing decision-making process, as suggested by Culiberg and Mihelic (2016). These questions have already received considerable individual attention in academic circles, with researchers examining the antecedents of whistleblowing and suggesting that individual, situational, and environmental factors impact whistleblower behavior (Near and Miceli 1985; Miceli and Near 1992, 1994; Mesmer-Magnus and Viswesvaran 2005; Latan et al. 2016; Culiberg and Mihelic 2016). Other studies have concentrated on the type of whistleblowing channels selected by whistleblowers (Dworkin and Baucus 1998; MacNab and Worthley 2008; Miceli et al. 2001; Culiberg and Mihelic 2016), with their primary focus being on insiders (former or current employees), although a few did include outsiders as well (Ayers and Kaplan 2005; Taylor and Curtis 2010; Dyck et al. 2010; Miceli et al. 2014; Culiberg and Mihelic 2016). We agree that further work is needed to examine the motivations that prompt different types of whistleblowers to expose fraudulent financial statements. The objective of the current study is thus to expand existing knowledge about whistleblower behavior by conducting a comparative analysis to examine the incentives/pressures, opportunities, and rationalization involved. For the purpose of our research objective, we propose using the whistleblowing triangle as a model to explain the factors that can induce an 123 N. Smaili, P. Arroyo individual to blow the whistle. Using 11 Canadian firms exposed by different whistleblowers for fraudulent financial statements, we compare the three elements of the triangle by type of whistleblower (insiders and outsiders). In addition, we establish a new categorization of whistleblowers and delve into their decision-making process. Canada offers an interesting context for the study of whistleblowing because Canadian regulatory responses to financial scandals better reflect the status of international regulations on this issue. In addition, reaction to financial scandals in Canada has been less aggressive than in the USA. For instance, in the USA, the SEC enhanced the role of the whistleblower through the Sarbanes–Oxley Act in 2002 to provide stronger encouragement and enhanced protection for whistleblowers. In 2010 section 922 of the Dodd–Frank Wall Street Reform and Consumer Protection Act established important new provisions for whistleblowers. In Canada, Multilateral Instrument 52-110, approved in 2003, mainly concerns audit committees, which must adopt procedures regarding ‘‘the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters’’ (OSC 2004). Similarly to the Sarbanes–Oxley Act, Multilateral Instrument 52-110 emphasizes the role of the audit committee in whistleblowing, thereby assuming that the audit committee has sufficient power and can act with some degree of independence (OSC 2004).3 Although prior studies that examined whistleblowing in Canada mainly featured comparative cultural and regulatory analyses (MacNab and Wortley 2008; MacNab et al. 2007; Thomas 2005; Lindsay et al. 1996), they also discussed federal whistleblower protection (Saunders and Thibault 2010; Luframboise 1991). Our study, coinciding with the implementation of two separate whistleblower policies enacted, respectively, by the Ontario Securities Commission (OSC) and the Autorité des Marchés Financiers (AMF—the financial market authority of the Province of Québec, Canada), extends state-of-the art research on whistleblowing by providing evidence from Canadian financial statement fraud cases. We contribute to the whistleblowing literature in several ways. First, our study helps fill the gap recently pointed out in the whistleblowing literature (Culiberg and Mihelic 2016) by investigating the antecedents and decision3 In October 2015, the OSC published the ‘‘Proposed OSC Policy 15-601 Whistleblower Program’’ (OSC 2015), designed to encourage the report of instances of serious securities-related misconduct in Ontario to the OSC. Under the proposed policy, ‘‘if there is an award eligible outcome, eligible whistleblowers could receive up to a maximum of $1.5 million regardless of whether the OSC recovers sanction monies ordered, and up to a maximum of $5 million if the OSC does recover funds.’’ The OSC launched the whistleblower program in 2016. Categorization of Whistleblowers Using the Whistleblowing Triangle making process of different types of whistleblowers using an integrative approach. It examines the identity and types of whistleblowers, the whistleblowing channel chosen by type of whistleblower, and whistleblowers’ pressures/incentives, opportunities, and rationalization. Second, this investigation takes prior studies one step further by identifying whistleblowers not only by their intrinsic characteristics, but also by their motivations. Accordingly, we introduce a new categorization of whistleblowers. In addition, by comparing whistleblower types, we provide new insight into the motivations that prompt each category of whistleblower to reveal wrongdoing. Third, as pointed out by Culiberg and Mihelic (2016), we investigate actual whistleblowing cases rather than hypothetical ones. We conduct comparative analyses over time to obtain an indepth picture, an approach that provides new awareness of the dynamic relation between whistleblowers. We note when a case involves more than one whistleblower and observe the influence of previous whistleblowers’ disclosures in further accusations. The whistleblowing triangle makes three main contributions to practitioners. First, it sheds light on the process by which a person chooses to blow the whistle or, conversely, decides not to reveal the wrongdoing, and, in the first case, on how the individual chooses a reporting channel. Second, regulatory authorities can use the triangle to provide a more effective framework for whistleblowing. Finally, it helps decision makers inside the firm. In fact, according to the whistleblowing triangle, a firm can encourage whistleblowing as an efficient means to detect corporate fraud by acting on diverse resources available in the firm that can play a critical role in this effort, such as internal controls, code of business ethics, and corporate governance. In the remainder of this paper, we examine the whistleblowing classification that has been a mainstay of the literature for more than three decades as well as the classification that has emerged in recent years. We then propose our conceptual framework and present our research method. Finally, we present the 11 case studies on Canadian firms, analyze the findings through the conceptual framework proposed, highlight our main theoretical and practical contributions, and acknowledge the limitations of our study. Whistleblowing and Whistleblower Classifications In general, whistleblowing involves the disclosure of perceived wrongdoing (Trevino and Victor 1992), and the whistleblower is the one who reports the wrongdoing. In the current whistleblowing literature, the distinction between internal and external whistleblowing derives 97 mainly from the identity of the recipient of the complaint (reporting channel). For instance, if the whistleblower directs his or her revelations to persons within the organization such as top management, the audit committee, or direct supervisors, the complainant is called an internal whistleblower. If the whistleblower turns to an external body such as the media, the government, or any law enforcement agency, the complainant is considered an external whistleblower (Bouville 2007; Near and Miceli 1996; Ponnu et al. 2008). However, recent studies also suggest classifying whistleblowers as insiders or outsiders based on the position from which they observe an act of wrongdoing (Dyck et al. 2010; Culiberg and Mihelic 2016). One of the most widely adopted definitions originates from Near and Miceli (1985), who describe whistleblowing as ‘‘the disclosure by organization members (current or former) of illegal, immoral or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action’’ (p. 4). Other scholars, including De Maria (1994), Jubb (1999, 2000), Dyck et al. (2010) and Culiberg and Mihelic (2016), hold a different view of the act of whistleblowing and whistleblowers, as summarized in Fig. 1. The broader notion of whistleblowing portrays the whistleblower as ‘‘a concerned citizen’’ (De Maria 1994), ‘‘an actor who brings each fraud to light’’ (Dyck et al. 2010), and as belonging to the categories of ‘‘insiders and outsiders’’ (Culiberg and Mihelic 2016). There are therefore no restrictions regarding identity (insider or outsider) or reporting channels (internal or external). A number of scholars continue nonetheless to restrict whistleblowers to ‘‘current or former organization members,’’ in line with Near and Miceli’s (1985) definition, recently reaffirmed by Miceli et al. (2014). Jubb (2000) limits the definition of whistleblowers even further by describing them as ‘‘insiders who seek to rectify perceived organizational wrongdoing’’ (Jubb 2000). The latter’s view of whistleblowing as an act of dissent assumes that insiders must face an ethical dilemma of divided loyalties to be considered whistleblowers. However, Near and Miceli (1985) contend that ‘‘employee deviance’’ is not a consistent or generalizable perception and therefore consider that an internal auditor can be a whistleblower, contrary to Jubb (2000), who maintains that reporting wrongdoing is a prescribed role of internal auditors. Legal provisions that affect whistleblowers appear to be more broadly articulated. For instance, section 922 of Dodd–Frank defines the whistleblower as ‘‘any individual who provides, or two or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission’’ (p. 467). Moreover, OSC Policy 15-601, a law in Ontario, Canada, 123 98 N. Smaili, P. Arroyo Fig. 1 Whistleblowing classification also known as the ‘‘Whistleblower Program,’’ defines the whistleblower as ‘‘an individual who provides, or two or more individuals acting jointly who provide, (a) voluntarily original information relating to a violation of Ontario securities law that has occurred, is ongoing or is about to occur, to the Commission; and (b) the information is submitted in the form described in sections 2 or 3 of this Policy.’’ Other programs also take a wider view of the whistleblower, including the AMF Whistleblower Program, which explicitly recognizes that the whistleblower can be an insider or an outsider by acknowledging that ‘‘a whistleblower has strategic access to privileged information. He or she may be a current or former employee, a director, a co-worker of the person committing the wrongdoing, a service provider or a friend or family member.’’ This particular piece of legislation extends the notion of ‘‘complainant’’ beyond that proposed by Near and Miceli (1985)4 and Jubb (2000), but in the same vein as Jubb (1999), considers the financial authorities to be the preferred disclosure channel (SEC, OSC, or AMF). Based on new legislation (Dodd–Frank Act, OSC Whistleblower Program, AMF Whistleblower Program) as well as the whistleblower concept implicitly suggested by Dyck et al. (2010) and explicitly advocated by Culiberg 4 The importance of outsider whistleblowers has been recently highlighted by Miceli et al. (2014). However, these authors insist that whistleblowers are only insiders, and therefore outsiders are only ‘bell-ringers.’ 123 and Mihelic (2016), we also adopt a wider view of whistleblowing which considers the disclosure made by insiders or outsiders (the whistleblowers) through internal or external channels. We do not expect that the disclosure of information is necessarily motivated by dissent or entails loyalty conflicts. The whistleblower, who could be an employee, an external auditor, a competitor, or a customer, chooses between two whistleblowing channels, internal or external. The first channel, consisting of internal parties such as the audit committee or the immediate supervisor, is primarily used by employees, managers, or other insiders. Outsiders are not restricted to this channel. The second channel is an external party such as a financial market authority, a professional association, or the media. This channel is used by insiders or outsiders. Prior literature suggests that the whistleblower chooses internal or external channels as a result of a multitude of factors (e.g., characteristics of the wrongdoing, organizational traits). For instance, the whistleblower may first decide to report the wrongdoing internally, and if dissatisfied by the organization’s response, he or she may then decide to report it externally (Dhamija 2014). Moreover, the whistleblower may also consider the consequences of the whistleblowing act at the time he or she selects the whistleblowing channel (Park and Blenkinsopp 2009). In Sect. 3, we present the theoretical background behind the development of the whistleblowing triangle, which is the conceptual framework guiding the examination of our 11 cases studies. Categorization of Whistleblowers Using the Whistleblowing Triangle Development of the Whistleblowing Triangle: Theoretical Background Whistleblowing Triangle Components More than three decades of research have shown that whistleblowing is a complex phenomenon. A considerable number of studies have examined various antecedents of whistleblowing (Miceli and Near 1992, 1994; Near and Miceli 1985; Mesmer-Magnus and Viswesvaran 2005; Cassematis and Wortley 2013; Culiberg and Mihelic 2016). Based on prior literature and theories on whistleblowing and whistleblower motivations, we propose another way of looking at this complex behavior. Our conceptual model is adapted from the fraud triangle, a model for explaining the factors that cause an individual to commit fraud (Cressey 1953). The three factors are pressure/incentive, opportunity, and rationalization. The differences between the meanings of the three components of the fraud and whistleblowing triangles are summarized in Table 1: The fraud triangle has been suggested and utilized by Li (2012) and Lo et al. (2017) as a tool for investigating the managerial use of complex disclosure. To the best of our knowledge, it has not been used for examining whistleblowing, except by MacGregor and Stuebs (2014), and recently by Brown et al. (2016). However, our study differs from these articles in terms of focus. While MacGregor and Stuebs (2014) use the fraud triangle for analyzing ‘‘how opportunities and i ... Purchase answer to see full attachment