Validation of Arnaud’s ethical climate index by public sector auditors in Malaysia

Abstract

Purpose The purpose of this paper is to empirically test Arnaud’s (2010) ethical climate index (ECI) of measuring ethical work climate (EWC) in the context of Malaysian public sector auditors (PSAs). Design/methodology/approach EWC is conceptualized as four main components with two sub-components. Questionnaires were distributed to the population of PSAs in the Malaysian National Audit Department (NAD). Factor analysis (principal component analysis [PCA]) was used to verify the components of EWC. Findings Results from PCA revealed that EWC, indeed, has four main components. Therefore, the findings of this study provide empirical evidence that validates Arnaud’s (2010) EWC model, although tested on PSAs in Malaysia. Research limitations/implications This paper has a limited purpose, which is to test whether the ECI could be applied to PSAs in Malaysia to derive the original four main components of Arnaud’s EWC. Thus, this study does not evaluate the EWC of PSAs or determine causal relationships between EWC and other variables; these are left to future studies. Practical implications The findings of this study confirm that Arnaud’s (2010) ECI is sufficiently resilient to be applied to the context of PSAs in Malaysia. Hence, future studies could use this index to measure EWC not only in the public sector but also in the private sector. Future research could also further test this index in different contexts. Originality/value Arnaud’s (2010) ECI was originally applied in the context of the private sector in a developed country. Hence, this study adds value by extending the ECI to the public sector in a developing country, Malaysia.

Ethical work climate and its influence on work-related ethical behaviour among the Malaysian public sector auditors

“…(1) studies on the factors influencing EWC (Luthar et al, 1997;Schminke et al, 2005;Weeks et al, 2006;Demirtas and Akdogan, 2015;Newman et al, 2017;Loke, 2019;Otaye-Ebede et al, 2020); (2) studies on the outcomes of EWC (Ismail, 2015;Shafer, 2015;Tsai and Huang (2008); Hsieh et al, 2016;Loke et al, 2019;Pagliaro et al, 2018;Teresi et al, 2019;Friend et al, 2020;Otaye-Ebede et al, 2020;Potipiroon and Wongpreedee, 2020;Barattucci et al, 2021); and (3) studies on the level or types of EWC (Wittmer and Coursey, 1996;Brower and Shrader, 2000;Rasmussen et al, 2003;Armstrong and Francis, 2008;Loke et al, 2019;Wan Abdul Razak and Mohd Mustamil, 2020). Arnaud's Psychological Process Model (2010) Rest's (1994) four psychological process (EDMP) model Hunt & Vitell's (1986, 1991 general theory of Marketing ethics (EDMP model).…”

“…studies on the level or types of EWC (Wittmer and Coursey, 1996; Brower and Shrader, 2000; Rasmussen et al , 2003; Armstrong and Francis, 2008; Loke et al , 2019; Wan Abdul Razak and Mohd Mustamil, 2020).…”

“…Very few studies have used Arnaud’s EWC model. Loke et al (2019) used Arnaud’s (2010) ECI to measure the extent of EWC in the Malaysian NAD as perceived by the public sector auditors. Although Loke et al (2019) confirmed that Arnaud’s (2010) ECI can be applied in the context of public sector auditors, they did not empirically evaluate the EWC.…”

“…Loke et al (2019) used Arnaud’s (2010) ECI to measure the extent of EWC in the Malaysian NAD as perceived by the public sector auditors. Although Loke et al (2019) confirmed that Arnaud’s (2010) ECI can be applied in the context of public sector auditors, they did not empirically evaluate the EWC. Thus, this study fills the gap by conducting empirical research to evaluate the extent of EWC in the NAD as perceived by the public sector auditors.…”