The deterrent effect of the SEC Whistleblower Program on financial reporting securities violations

IF 3.2 3区 管理学 Q1 BUSINESS, FINANCE
Christine Wiedman, Chunmei Zhu
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Abstract

The stated goal of the SEC Whistleblower Program introduced as part of the Dodd-Frank Act was to deter securities violations and thereby to strengthen investor protection. We document significant reductions in the likelihood of financial reporting fraud by US firms following the introduction of this program. The reductions are robust to controlling for other regulatory changes in the Dodd-Frank Act and economic trends. Given that employees of firms with weaker internal compliance and reporting programs are more likely to report irregularities directly to the SEC rather than internally, we predict and find that these firms are more likely to change their reporting behavior. We also show that the observed reductions are attributable to an improvement in internal whistleblower programs and the hiring of more capable audit committee members after the program's inception. Collectively, these findings provide important large-sample evidence of significant benefits of the SEC Whistleblower Program for deterring financial reporting fraud and of the efficacy of bounty-type whistleblower programs.

Abstract Image

美国证券交易委员会举报计划对财务报告证券违法行为的威慑作用
作为多德-弗兰克法案的一部分,美国证券交易委员会举报人计划的既定目标是阻止证券违规行为,从而加强对投资者的保护。我们记录了引入该计划后美国公司财务报告欺诈可能性的显著降低。这些削减措施对于控制《多德-弗兰克法案》(Dodd-Frank Act)中的其他监管变化和经济趋势来说是强有力的。鉴于内部合规和报告程序较弱的公司的员工更有可能直接向SEC报告违规行为,而不是在内部报告,我们预测并发现这些公司更有可能改变他们的报告行为。我们还表明,观察到的减少可归因于内部举报人计划的改进以及该计划启动后聘请了更有能力的审计委员会成员。总的来说,这些发现提供了重要的大样本证据,证明了SEC举报人计划在阻止财务报告欺诈方面的重大好处,以及赏金型举报人计划的有效性。
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来源期刊
CiteScore
6.20
自引率
11.10%
发文量
97
期刊介绍: Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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