"Who Blows the Whistle on Corporate Fraud?" released by the National Bureau of Economic Research found that between 1996 and 2002, 21 percent of corporate whistleblowers were employees. Since then, 16 percent of whistleblowers were employees.

"To those of us who study the impact of corporate culture on ethics and compliance, this news comes as no surprise," said David Gebler, President of Working Values Ltd., a business and ethics training company. "Having access to a hotline without a supportive culture is like dying of thirst while stranded on a life raft in the open ocean. The illusion of help is there but the reality can kill you."

According to the report, employees have little incentive to come forward, and in fact are afraid of retaliation if they do. The study looked at 230 alleged corporate fraud cases involving companies with at least $750 million in assets. Among those cases that named employee whistleblowers, 82 percent of employees that came forward alleged they were fired, quit under duress, or had significantly altered job responsibilities.

"It takes a tremendous amount of courage to stick one's neck out and report an allegation of fraud," said Gebler. "An organization needs to spend as much time ensuring that the culture encourages individual responsibility as it does setting up internal controls and processes to meet Sarbanes requirements."

While employees are less likely to report fraud, the study found that auditors are increasingly reporting wrongdoing. Pre-SOX, less than 10 percent of the fraud cases were detected by auditors. Post-SOX, that number jumped to 16.9 percent.

Other whistleblowers include journalists, at 14 percent, and regulators. But interestingly, the Securities and Exchange Commission detected only 6 percent of fraud cases between 1996 and 2004, states the report.

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