The Quantitative Approach of Corporate Ethical Culture in Reducing Corporate Fraud

Abstract

Purpose This study aims to examine corporate ethical culture practices as to whether the existence of core ethical values, ethics programs, and ethical leadership infused throughout the organisation will reduce corporate fraud.
Design/methodology/approach This study used questionnaires to survey employees of publicly listed companies in Malaysia, and we analysed the data using a statistical test in SPSS. A total of 214 responses were received and were deemed as usable. Multiple regression was performed to achieve the objectives of this study.
Findings This study validates the need for more corporate ethical practices as part of corporate governance to reduce corporate fraud. Consequently, it provides the rationale for undertaking this research as well as the basis for generating research questions and hypotheses.
Research limitations/implications The organisation needs to develop knowledge and skills to help the employees make decisions in the best interest of their companies and to view corporate ethical practices as widespread throughout the organisation. One excellent approach to reducing corporate fraud is to examine core ethical values, implement ethics programs, and foster ethical leadership.
Theoretical/Practical Implication. This study provides the latest literature that supports the validated results of the inductive data analysis of the survey. From a practical perspective, a corporate ethical culture can enhance optimal productivity, minimise the cost of employee turnover and retraining, and give the organisation higher profitability.