The University of New South Wales last week announced an inquiry into "soft marking" for students paying full fees.
The move, the first of its kind in Australia, follows claims that academics have been pressured to lower standards.
Kevin McConkey, president of the academic board, told staff the university would offer protection to anyone who raised concerns.
Staff and students have been given four weeks to lodge reports of incidents that may have occurred over the past two years.
A public debate on whether universities were lowering standards for full-fee students was triggered in January by a preliminary report of a survey of social science academics organised by a Canberra-based independent think-tank, the Australia Institute.
In a memorandum to staff, Professor McConkey said that although the university had a well-developed system of checks and balances for marking procedures, grievance resolution and counselling services, it was important that staff and students felt the system was working. If it was not working, then it was important that "something be done".
"Your concerns will be taken seriously and will be treated in confidence as far as possible within the bounds of law," Professor McConkey said.
Students at the university said the mounting evidence that standards were falling had forced them to act. Academics said the majority of staff welcomed the inquiry.
Wollongong University last month sacked academic Ted Steele after he alleged he was told to upgrade students' work. The Australia Institute survey also quoted academics as saying they had been directed to "lower the bar" to allow substandard students to pass or enrol on a course.
The survey of more than 800 academics also found widespread concern over declining academic freedom as well as claims of soft marking for full-fee-paying students.
Academics who responded to the survey said the falling standards were largely a result of the financial squeeze on higher education.
"The focus now is on attracting external funding for research and full-fee-paying students," one academic said. "This focus determines which courses survive, what subjects are taught, who is promoted or retrenched and so on."
The institute report said 92 per cent of those surveyed expressed concern about academic freedom, with 37 per cent reporting major concern. Almost three in four believed there had been a deterioration in academic freedom over the past four years with 45 per cent saying the impact was major.
A small number, 17 per cent, said they had been prevented from publishing contentious research results while half said they were reluctant to criticise institutions that provided large research grants or other forms of support.
In a submission to a senate inquiry into higher education, the institute provided pages of quotes from academics complaining of the pressure to lower standards and pass full-fee-paying students.
"Student rights have been promoted over my professional judgement of their achievement," one academic wrote. "I have felt pushed into passing students who in my opinion should not pass."