Did the Dodd-Frank Whistleblower Provision Deter Accounting Fraud?

• 成果类型: Article
• 署名作者: Berger, Philip G.; Lee, Heemin
• 署名单位: University of Chicago; City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12421
• 发表日期: 2022
• 页码: 1337-1378
• 关键词: corporate; earnings; FIRMS

摘要

We examine the deterrence effect of the Dodd-Frank whistleblower provision on accounting fraud. To facilitate causal inference, we use state False Claims Acts (FCAs), under which whistleblowing about accounting fraud at a firm invested in by a state's pension fund can result in monetary rewards from that state's government. We divide our sample into firms exposed and not exposed to whistleblowing risk from a state FCA during the 2008-2010 period that preceded the 2011 SEC implementation of the Dodd-Frank whistleblowing provision. We hypothesize that firms already exposed to a state FCA whistleblower law are less affected by the Dodd-Frank whistleblower provision. Using the companies exposed to a state FCA as control firms in our Dodd-Frank tests, the remaining firms constitute the treatment sample. We find that exposure to Dodd-Frank reduces the likelihood of accounting fraud of treatment firms by 12%-22% relative to control firms, but do not find that it affects audit fees.