Moderating Role of Gender on the Relationship between Accountants’ Level of Moral Development and Their Whistleblowing Intentions

EXTENDED ABSTRACT
Introduction
AS a significant socioeconomic issue worldwide, financial wrongdoings have adverse consequences for a wide range of stakeholders. Whistleblowing is one of the most important monitoring mechanisms in organizations and plays a key role in deterring financial wrongdoings. According to the report by the Association of Certified Fraud Examiners (ACFE), tips from employees is the most common way of detecting fraud. There is always a concern that disclosure of financial wrongdoings will undermine public confidence and hurt the economy. However, as knowledge and experience of combating fraud increases, disclosures can be helpful by informing, identifying weaknesses, raising awareness of common types of fraud, and limiting opportunities for further violations. 
There have been many studies on whistleblowing. Most of these studies have investigated different factors that affect intentions to report financial wrongdoings. Gobert and Punch (2000) believe that whistleblowing intentions are driven by psychological and sociological factors. Therefore, to minimize the negative consequences of financial wrongdoings and prevent their reoccurrence, special attention must be given to the factors affecting whistleblowing intentions, especially among accountants who play a significant role in business governance (Axtell, Smith & Tervo, 2017). What distinguishes accountants from other employees is having the necessary skills to understand the existence, materiality, and nature of financial wrongdoings. Therefore, it is important for them to report violations because of their irreplaceable role in detecting and discouraging wrongdoings.
However, given the diversity of the workforce in the accounting profession in terms of demographic characteristics such as gender, age, and education, one cannot expect accountants’ ethical behaviors to be similar under the same circumstances. Although complete information is not available on the gender composition of Iranian accountants, the available evidence indicates an increase in representation of women in the field of accounting and auditing in both public and private sectors. Therefore, it is interesting to study how this demographic change has affected accountants’ behavior in the workplace. Gender is one of these factors that has been less studied in relation to accountants’ whistleblowing intentions. According to Taylor and Curtis (2013), gender may have inconsistent effects on ethical decision making. Therefore, the main question of the present research is whether gender affects accountants’ whistleblowing intention as an ethical decision.   
In addition to demographic characteristics, it is important to identify other factors that encourage or discourage individuals from reporting financial wrongdoings. In particular, the present research examines moral reasoning as a potential driver of whistleblowing intention. According to the theory of moral reasoning, an individual’s level of moral reasoning affects their action and behavior. Individuals with lower levels of moral reasoning primarily think of their interests in the decision-making process for a particular action, even if that action does not conform to norms, while those with higher levels of moral reasoning act in accordance with prevailing norms, even if those actions do not serve their personal interests. Prior research has found a testable link between moral reasoning and the decision to report financial wrongdoings. For example, Arnold and Ponemon (1991) found that internal auditors with relatively low levels of moral reasoning were less likely to report wrongdoings, and that the likelihood of retaliation further reduces whistleblowing intentions. This finding can be explained using Kohlberg’s (1969) theory of moral development, where lower levels of moral reasoning are focused on avoiding punishment (Stage 1) or serving one’s own interests (Stage 2). 
In addition to examining the individual effects of gender and moral reasoning on whistleblowing intentions, the present study examines the moderating effect of gender on the relationship between accountants’ moral reasoning and whistleblowing intention. Thus, other questions that this study seeks to answer are as follows: Does accountants’ level of moral reasoning affect their whistleblowing intention? Does gender directly affect whistleblowing intentions, or does it play a moderating role in the relationship between moral reasoning and whistleblowing intention? This study is an attempt to fill the gaps in the literature on whistleblowing in the field of accounting by examining the effect of gender and moral reasoning on accountants’ intention to report wrongdoings. 
The contributions of this research are twofold. Previous studies have mostly used Rest’s (1986) Defining Issues Test (DIT) or Lind’s (1985) Moral Judgment Test (MJT) with P-scores, while the present research uses MJT with the C-index to measure accountants’ different levels of moral reasoning. Lind (2000) found that participants in DIT or MJT could obtain higher P-scores by repeating the tests, while the same sample failed to raise their C-scores through repetition. Moreover, most studies in the past have examined the effect of various factors on whistleblowing to internal authorities, while there have been few studies on whistleblowing to external authorities. This study provides useful information about the determinants of whistleblowing by accountants, and its implications can guide recruitment policies as well as plans to develop the ethical principles of the accounting profession. 
 Hypothesis
Based on the discussions above, the following hypotheses are developed to examine the effect of gender and moral reasoning on whistleblowing intention:
H1. Moral development has a significant effect on intention to report wrongdoings to internal authorities.
H2. Moral development has a significant effect on intention to report wrongdoings to external authorities.
H3. Gender has a significant effect on the relationship between accountants’ level of Moral development and intention to report wrongdoings to internal authorities.
H4. Gender has a significant effect on the relationship between accountants’ level of Moral development and intention to report wrongdoings to external authorities.
Methods
This research is a survey carried out in 2020. The statistical sample consisted of 385 accounting graduates working in public and private firms who were selected using non-probabilistic sampling. The required data were collected using a questionnaire, and the hypotheses were tested using structural equation model (SEM) and SPSS. Excel and SmartPLS were also used to perform these analyses.
Results
Based on the reported t-statistic (greater than 1.96), the effect of accountants’ Moral development on their intention to report financial wrongdoings to internal authorities is significant and the first hypothesis is accepted at the 95% CI. The results also show that the effect of accountants’ Moral development on their intention to report wrongdoings to external authorities is significant and the second hypothesis is accepted at the 95% CI. Given that the t-statistic obtained for the parametric test and Welch-Satterthwaite t-test is less than 1.96, it can be concluded that gender does not moderate the relationship between accountants’ Moral development and their intention to report wrongdoings to internal authorities. Moreover, the value of t-statistic is greater than 1.96 in the Parametric test and Welch-Satterthwaite t-test, indicating that gender moderates the relationship between accountants’ Moral development and their willingness to report violations to external authorities.
Discussion and Conclusion
The growing prevalence of financial wrongdoings and the serious consequences they entail for organizations has led to the increasing expansion of research on whistleblowing. The results of several surveys by ACFE consistently indicate that whistleblowing is an effective mechanism for unearthing and preventing financial wrongdoings (ACFE, 2012, 2014, 2016, 2018, 2020). So far, the effect of various factors on whistleblowing intention has been investigated. However, to our knowledge, there has been no study that incorporates social learning theory, social role theory, gender socialization theory, and Moral development theory into the study of whistleblowing intention. The present study investigated the effect of accountants’ level of moral development on their whistleblowing intentions while examining the moderating role of gender on that relationship.
This study not only investigated the effect of Moral development on whistleblowing intention, but also examined whether gender plays a mediating role in the relationship between Moral development and whistleblowing both to internal and external authorities. The results presented in Table 7, while confirming the first and second hypotheses of the research, show that accountants’ level of Moral development affects their intention to report financial wrongdoings to authorities inside or outside the organization. Individuals with higher levels of moral development and reasoning are more likely to comply with social contracts and group rules and norms, and the prevailing assumption is that an individuals with high levels of Moral development want to be good members of the group or society. For this reason, these individuals quickly come oppose any violation of the law and are more likely to report wrongdoings to internal and/or external authorities. 
The results also indicate that gender moderates the relationship between accountants’ Moral development and their intention to report wrongdoings to external authorities. This can be explained using the social role theory, which proposes that the role defined by the society for each gender can be an important factor in an individual’s moral decisions. 
Based on the present findings, it can be argued that the basic theories of behavioral sciences and psychology are useful for explaining accountants’ whistleblowing intentions. Corruption has been a major global concern for stakeholders of organizations and officials, and highlights the need to pay more attention to morality and ethical standards. Organizations need to create a culture that is conducive to ethical behavior by accounting professionals, especially by encouraging whistleblowing, while taking into account various factors such as gender differences that affect whistleblowing intentions. By developing special motivational strategies that take into account gender differences, organizations can take steps to increase the propensity of accountants to report financial wrongdoings. It is also necessary for organizations to consider the level of moral development and reasoning of accountants when recruiting and assigning them to different positions. Given the differences in the Moral development of male and female accountants, training programs can be tailored to each gender and use concrete examples of financial scandals around the world to promote ethical behavior. Organizations should also develop and implement policies, procedures, and mechanisms that support whistleblowing, including confidential hotlines and highlight whistleblowing as an effective mechanism for promoting ethical values ​​in training programs and the code of ethics. In addition, organizations can use incentivize employees to report wrongdoings, while preventing any retaliation against whistleblowers. 
It must be noted that the present study has some limitations. A clear example is the limitation is the use of a hypothetical scenario to measure the research variables. In general, the use of questionnaires has inherent limitations, including the unfamiliarity of participants with the subject, insufficient participation by qualified individuals, different interpretation of the questionnaire items, and response bias among some participants.