The Motivation And Mechanisms Of Employee Exposing Accounting Fraud In Chinese Listed Company

Since the UK’s first case of the public company accounting fraud”South SeaCompany”occurred,accounting fraud issue has become a focus of attention ofinvestors and creditors.In recent years,the United States exposed theEnron,WorldCom and a series of fraud scandals,and among the listed companies inChina，a series of accounting fraud cases have also taken place such as JoanSource,Yinguangxia,Blue Sky and so on.They are a serious impediment to thehealthy development of the capital markets and they cause harm to the relevantinterest groups.But the research abroad shows that the traditional accounting fraudwhistleblowers including auditors and securities regulators do not constitute themain body of the accounting fraud whistleblowers.While the non-traditional fraudwhistleblowers， such as employees， media， account for a considerableproportion.Therefore,the exposing mechanisms and motivation of thenon-traditional whistleblowers has been a hot research scholars abroad.This articlelooks from the perspective of exposing accounting fraud of employees and looksfor the factors and the mechanisms that affect employees exposing accountingfraud,in order to provide a theoretical basis for the development of China’s relevantlaws.Based on the carding of the domestic and abroad literature,using empiricalquestionnaires and scale analysis as the research method, and using the employeesin Beijing and Tianjin that include general accounting/financialpractitioners,accounting/financial officers,internal auditors,general managers andmiddle managers as the research object,we systematically investigate the factorsthat affect employees exposing accounting fraud and the motivations thatemployees exposed or not to expose accounting fraud.We withdrew a total of503valid questionnaires, analysised the data through SPSS19.0and got the followingconclusions:(1)There is a positive relationship between proactive personality and exposing accounting fraud.There is a positive relationship between negativeemotions and exposing accounting fraud.There is a negative relationship betweencollectivism and exposing accounting fraud.(2)Different types or amounts ofaccounting fraud involved,the likehood of being exposed is different.(3)Legalprotection policies and financial incentives will increase the likehood of employeesexposing.(4)The motivations of employees of different positions who expose or notto expose accounting fraud are different.(5)The vast majority of whistleblowersexposed the accounting fraud to the internal management and very few peopleexposed to the outside organization.(6)Employees are more inclined to use thecomplaint letters,email or cyberspace to exposing accounting fraud.Based on the above conclusions,the paper proposes some suggestions againstexposing of accounting fraud from the view of accounting legal systemconstruction:(1)Improve the laws and policies which protect the whistleblowerseffectively.(2)Establish the laws and policies which motive the whistleblower usingmoney.(3)The Commission should establish a special legal institution,set up amailbox,a email and a cyberspace to specifically receive the information ofexposing and implement a specific investigation.