Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

1.1.1 Fraud

The definition of fraud according to Zimbelman et al. (2012), they mentioned that fraud is a
generic term, and embraces all the multifarious means which human ingenuity can devise which are
resorted to by one individual to get and advantage over another by false representations.

There is another definition from Martinov-Beanie (2007), fraud is an institution as an

intentional practice by individuals that involve dishonest actions to gain an unjust or illegal benefit.
Fraud also covers some aspects of corruption, any measurement that being made to fraud, it will also
cover some aspects of corruption (Mark et al., 2015).

1.1.2 Corruption

Corruption is also a dishonest and fraudulent conduct usually done by those in power.
Corruption here can be defined being defined by Aris et al. (2013), is a wrongful use of influence in a
business transaction in order to procure some of the benefits for themselves contrary to their duty to
their employer or the rights of another.

Besides that, corruption also gives meaning of “behaviour which deviates from the formal
duties of a public role because of private-regarding (personal, close family, private clique) pecuniary
or status gains; or violating the rules against the exercise of certain types of private-regarding
influence (Nye, 1967, p. 419; Caiden, 2001; Gardiner, 2002).

1.1.3 Integrity

According to World Custom Organizations (2015), integrity can be defined as a positive set of
attitudes which could foster honest and ethical behaviour and also work practices. Integrity in the
context of public servant is not just about staying away from bribery and also corruption, it is also
about one person doing one work conscientiously, sincerely, fairly and with a sense of responsibility
and urgency (Buang, 2015). He also added that, it is actually about one’s mind-set, attitude, behaviour,
competency and also diligence in carrying out the task and responsibility.

There are five primary themes encompassing the meaning of integrity which include
wholeness, consistency of words and actions, consistency in adversity, being true to oneself and moral
or ethical behaviour that being identified by Palanski and Yammarino (2007).

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 Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

1.1.4 Integrity Capacity

Integrity capacity can be defined as the individual and/or collective capability for repeated
process alignment of moral awareness, deliberation, character and conduct that demonstrates
balanced judgment, enhances sustained moral development and also promotes supportive systems
for moral decision making (Petrick and Quinn, 2000).

1.1.5 Leadership

According to Raymond (2006-2016), leadership is defined as the art of influencing human

behaviour towards organizational goal. He added that the concept of leadership is that the leadership
task is about working with and influencing human behaviour. Northouse (2007) also mentioned that
leadership is a process whereby an individual influences a group of individuals in order to achieve a
common goal.

1.1.6 Attitude

There is one of the most famous definitions of attitude which is, a learned predisposition to
respond in a consistently favourable or unfavourable manner with respect to a given object (Fishbein
and Ajzen, 1975, p.6). According to Mathew (2016), it is clearly stated by Fishbein and Ajzen (1975)
that there is a clear emphasis on the effective dimension of attitude indicates that, attitude will
eventually influences behaviour.

Besides that, Hogg and Vaughan (2005, p.150) also defined that attitude is a relatively
enduring organization of beliefs, feelings and the tendencies of behavioural towards socially
significant objects, groups, events or symbols.

1.1.7 Ethical Values

Ethics is a guide of moral conduct in terms of actions, thoughts and emotions by which an
individual is able to distinguish between rights and wrong (Beekun, 1996).

1.2 Broad Problem Area

Malaysia is considered to be one of the successful developing country. However according to

Rosli et al. (2015), there are a major challenge that need to be address in order to strengthen the
ethics and also integrity.

Besides that, Rosli et al. (2015) also mentioned that Malaysia has been graded as one of the
most corrupt nation as reflected in the current survey being conducted by Ernst and Young (EY) and

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 Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

also Survey done by the Asia Pacific Fraud Survey in the report series of 2013 as the survey indicated
that the highest number of bribery and corruption is Malaysia.

1.3 Problem Statement

Global Economic Crime Survey (2016) done by PricewaterhouseCoopers (“PWC”) stated that,
the economic crime is diversified global issue. With more than one in three (36%) organisations
experienced economic crime both developed and emerging markets affected and also company
detection methods not keeping in pace.

Besides that, “Growing beyond: a place for integrity 12th Global Fraud Survey (2011) done by
Ernst and Young (EY) stated that, bribery and corruption remain pervasive. 39% of respondents on a
global basis, reported that bribery or corruption practices occur frequently in the countries. In the
rapid-growth markets, the challenges are even greater where a majority of respondents believe that
these practices are common.

While, according to KPMG Malaysia Fraud, Bribery and Corruption Survey (2013) that being
conducted in Malaysia, the majority believe that fraud (83%) is specifically on bribery and corruption
(90%) is one of the major problem for businesses in Malaysia. Not only that, more than half of the
being admitted by the respondents that fraud in general (52%) and bribery and corruption (65%) also
being the major problem in the organization.

There is also a survey being conducted in Malaysia by KPMG in the year 2004, they found out
that 62% of the respondents felt that the major problem for Malaysian business is fraud. Besides that,
there are 83% of the respondents acknowledged that they experiencing fraud in their own
organization. Escaleras et al. (2009) also given an arguments that the cases of corruption also become
too common in the Public Sector industry. One of the major problems in Public Service Organizations
is the integrity issues (Escaleras et al., 2009).

1.4 Objectives of the Study

The objectives of this study is to examine the integrity capacity in mitigating fraud in Malaysian
Public Sector. The specific objectives of this study are as follows:-

i. To examine the relationship between leadership and mitigating fraud in Malaysian Public
Sector.
ii. To examine the relationship between attitude and mitigating fraud in Malaysian Public Sector.
iii. To examine the relationship between ethical values and mitigating fraud in Malaysian Public
Sector.

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 Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

1.5 Research Questions

There would be three research questions for this study. The specific research questions are
stated as follows:-

i. Does leadership will give effect in mitigating fraud in Malaysian Public Sector?
ii. Does attitude will give effect in mitigating fraud in Malaysian Public Sector?
iii. Does ethical values will give effect in mitigating fraud in Malaysian Public Sector?

1.6 Scope of the Study

In order to accomplish the objectives of the study, a survey will be conducted on the elements
of integrity capacity which are leadership, attitude and ethical values among the departments and
agencies under the Federal Ministry in Malaysia. There are three tiers of government in the Malaysian
Public Sectors which are Federal Government, State Government and also Local Government (Azleen
and Nurul Nazirah, 2013).

This study will be focusing on the Federal Government of Malaysia which are the Malaysian
Cabinet Ministers and Ministries (“Kerajaan Persekutuan Malaysia”). The survey will be conducted in
all 28 ministries in Malaysia as to avoid any biasness in collecting the information regarding this study.

There are 28 Malaysian Cabinet Ministers and Ministries as stated below:-

i. Prime minister's office deputy prime minister's office

ii. Ministers in the prime minister's department
iii. Deputy ministers in the prime minister's department
iv. Ministry of agriculture & agro-based industry
v. Ministry of defence
vi. Ministry of domestic trade & consumer affairs
vii. Ministry of education
viii. Ministry of energy, green technology & water
ix. Ministry of entrepreneur & co-operative development
x. Ministry of federal territories
xi. Ministry of finance
xii. Ministry of foreign affairs
xiii. Ministry of health
xiv. Ministry of higher education
xv. Ministry of home affairs & internal security
xvi. Ministry housing & local government

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 Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

xvii. Ministry of human resources

xviii. Ministry of information, communication and culture
xix. Ministry of international trade & industry
xx. Ministry of natural resources & environment
xxi. Ministry of plantation industries [300] & commodities
xxii. Ministry of rural & regional development
xxiii. Ministry of science, technology & innovation
xxiv. Ministry of tourism
xxv. Ministry of transport
xxvi. Ministry of women, family & community development
xxvii. Ministry of works
xxviii. Ministry of youth & sports

1.7 The Relevance of the Study

This study is to examine the factors that affecting in mitigating fraud in Malaysian Public
Sector. This study will be highlighted in the elements of integrity capacity which are leadership,
attitude and also ethical values in how the elements give impact in mitigating fraud in Malaysian Public
Sector.

This study is basically will help the government to identify whether the elements of integrity
capacity which are leadership, attitude and ethical values give impact in mitigating the fraud to
happened and also on how to mitigate fraud in the Malaysian Public Sector. Therefore, this study is
particularly will help the Malaysian Public Sector to mitigate fraud in their departments and so forth.

Besides that, this study hope that it also will help to gather on some information that might
be used by the Public Officials in mitigating fraud in their respective departments. Not only that, it is
hoped that by conducting this study will make the Public Officials aware of the impact and effect the
integrity capacity in mitigating fraud in Malaysian Public Sector.

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 Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

In this Chapter describes various literature review from the prior studies that being done by
the researcher on their research topics. Basically, the literature review that being described in this
chapter is on topic on mitigating fraud which is the dependent variable and integrity capacity which is
the independent variable. Besides that, there is also literature reviews on the elements of the integrity
capacity which are leadership, attitude and also ethical values that being described as below.

2.2 Mitigating Fraud

According to Bank Negara Malaysia website stated that fraud is actually a crime and also a
civil law violation. There are many fraud cases that being conducted by the ‘white collar criminals’ i.e.
business professionals with criminal intent and specialized knowledge that involves complicated
financial transactions.

As mentioned by Watanagase (2008), it is impossible to fully prevent fraud but the probability
of fraud occurrence can be reduced. Besides that, she also mentioned that the losses could be
minimized with a stronger oversight and tighter controls. According to Rosli et al. (2015), Malaysia has
been the highest level of bribery and also corruption done by Asia Pacific Fraud Survey Report Series
2013. Besides that, they also mentioned that, Malaysia also has been graded as one of the most
corrupt nation based on the survey conducted by Ernst and Young (EY).

As fraud is basically cover some aspect of corruption, therefore whenever there is

measurement to fraud, it also covers some features of corruption (Mark et al., 2015). As also
mentioned by Siddique (2010), corruption threatened good governance, distorts public policy,
misallocation of resources and will give bad impact to the economic growth (Bardhan 1997; Rose-
Ackerman 1999). Besides that, corruption is also a violation of the public interests which includes the
actions’ that favours whoever provides the rewards and therefore will give damages to the public and
also their interests (Friedlich 1966).

Therefore, Albrecht (2016) mentioned that if the Managers in the organizations are focusing
in building and also maintain integrity will support a healthy tone at the top and not only that, they
actually help to block any portals that lead to fraud.

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2.3 Integrity Capacity

As mentioned by Buang (2015), integrity is not just only in the context of Public Sector Servant
which is just to stay away from bribery and corruption. It is also to do work conscientiously, sincerely,
fairly and with a sense of responsibility and urgency. Therefore, it is basically about an individual’s
mind-set, attitude, behaviour, competency and also diligence in carrying out any tasks or
responsibilities (Buang, 2015).

In the assumption by Byrne et al. (2014); Kim and Harmon (2014), they assumed that integrity
violations which is equivalent to intentional acts and also competence violations are acceptable for
unintentional acts. Besides that, Palanski and Yammarino (2007) had identified there are five primary
themes that gives meaning of integrity which are include wholeness, consistency of words and actions,
consistency in adversity, being true to oneself and also moral or ethical behaviour.

Integrity violations may resulted in the financial losses, severe reputational damage, leads to
bankruptcy (Cohan, 2002; Gini, 2004), give huge impact to the country’s economic and political system
(Bull and Newell, 2003; Della Porta and Me´ny, 1997). The integrity violations here means fraud and
corruption been taken into places. One of the example is the conduct of managerial immoral and
illegal done by the top Enron Executives is one of the vivid example in neglecting the individual and
also organization integrity capacity (Cruver 2002; Swartz and Watkins 2002). It has led to the
stakeholder harms due to the neglected of integrity capacity by the managers and also Enron
Executives as at moral root of Enron’s legal and financial problem (Joseph et al., 2003).

Being mentioned by Escaleras et al. (2009), in the public service organizations, integrity issues
have become one of the major problem as the cases of corruption in the public sector have become
too common in this industry.

2.4 Leadership

Integrity is one of the fundamental ingredients of effective leadership and also has become a
vital component of famous leadership perspectives that includes Authentic Leadership,
Transformational Leadership, and also Ethical Leadership (Brown and Trevino, 2006; Den Hartog,
2015). Also stated by Moorman et al. (2013), there would be high potential to damage the
organizational functioning that might be derived from the leaders’ trust violations, integrity and also
morality within the leadership domain. However, there is always an element of integrity in the
leadership (Palanski and Yammarino, 2007). For example, the citizens need for it from politicians,
employees desire it from the managers, and so forth (Palanski and Yammarino, 2007). Hence, the
ethical tone would be set up by leaders for an organization by enacting practices, policies and also

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procedures that will help to encourage the display of an ethical behaviour and eventually will reduce
the likelihood of misconduct (David et al., 2010).

According to Berkman et al. (2008), they stated that public corruption is basically an abuse of
the entrusted power by the political leaders for their private gain. They added that, the effect of
corruption will compromise all of the efforts in order to improve governance and foster the
development. Berkman et al. (2008) also mentioned that corruption is an economic problem that
basically burdens the poor people in the developing countries. Hence, the behaviour of the leaders
who violate the integrity-based norms in the organizations can seriously jeopardize the followers’
sense of self at individual, group and also organizational levels (Krylova et al., 2016)

According to the Association of Certified Fraud Examiners (ECFE), there is a connection

between fraud and the “tone at the top” of the organization which has received the international
attention over past few years. The Association of Certified Fraud Examiners (ACFE) also mentioned
that, tone at the top could be referred to the ethical atmosphere that is being created by the
organization’s leadership in their workplace environment. However, the employees would be more
inclined to maintain the ethics and integrity if only that the tone being set up by the managers in
upholding the ethics and also integrity as mentioned by ACFE.

Thus, being stated by Berkman et al. (2008) in their prior research study is, it is clearly
mentioned that in order to fight the corruption is at the leadership level at the World Bank and
regional MDBs.

2.5 Attitude

According to Montgomery et al. (2002) attitude is basically a character or a set of ethical

values that would allow one or more individuals intentionally to commit a dishonest act or in the
situation that the individuals able to rationalize to commit a dishonest act. However, according to
Badaracco (2002), he mentioned that if the person of an integrity has an awareness in following the
rules and regulations it will leads to deeply held ethical principles, values and they will make right
decisions.

Bell and Carcello (2000) noted that if there is a weak control environment and also aggressive
attitude towards the financial reporting in the organizations, it will significantly lead to fraud. Besides
that, Baucus (1994) mentioned that in the corporate illegality studies emphasize that the critical fraud
elements are role of incentives, opportunities and also attitudes.

Therefore, in order to mitigate fraud or preventive controls which may be necessary in order
to avoid fraudulent action is to use the conditions, motivations and also attitudes model of Loebbecke

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et al. (1989). According to Hashim and Abdul Majeed (2013), it is always to be associated with higher
fraud risk assessment when there are always use of incentive systems, irresponsible attitudes of
management and also even when there is possible opportunities to commit fraud.

2.6 Ethical Values

As mentioned by Krylova et al. (2016), there are few links between integrity with values-
related construct which includes ethics, morality, honesty, and also sincerity. According to Krylova et
al. (2016), there has been a divergence of the definitions on the concept of integrity. They added that,
there are two different schools of thought as for the first one is assuming that it does not enclosed a
moral values component which is behavioural integrity and the second one assumed that it does
enclosed moral values component which is moral integrity.

As mentioned by Mastura et al. (2016), the additional negative effect may be occurred if there
is an unethical behaviour employee in that particular organizations. Besides that, the controls of the
management is also important as if it is poor, then there will be spaces for the employees to commit
fraud (Mastura et al., 2016). Micheal and Francis (2007) also mentioned that, integrity is always
related to the specific moral or ethical behaviours.

Suggested by Romney and Albrecht (1980), a person with high level personal ethics with
limited pressure to commit fraud, they will eventually and most likely to behave honestly. If that
particular individual acts with lower ethical standards with increasing pressure and also been given an
opportunity, therefore, they will ten to commit fraud (Hall, 2008).

As mentioned by Mangoensentono (2011), the fraud unit will be able to increase the
recoveries of losses due to fraud if the organizations integrate a core ethical value of how things need
to be done in the documentations. Besides that, Mangoensentono (2011) added that leaders also
plays an important role in the strategy in order to recover the losses due to fraud on a yearly basis.

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 Integrity Capacity in Mitigating Fraud in Public Sector: Malaysian Evidence

2.7 Theoretical Framework

INDEPENDENT DEPENDENT
VARIABLES VARIABLE
[IV] [DV]

LEADERSHIP

MITIGATING FRAUD

ETHICAL VALUES

FIGURE 1: THEORETICAL FRAMEWORK FOR THE STUDY

2.8 Hypothesis Development

2.8.1 Leadership

The basic commitment to fighting corruption is now clear at the leadership

level at the World Bank and regional MDBs (Berkman et al., 2008).

H1: There is a relationship between leadership and mitigating fraud in Malaysian Public
Sector.

2.8.2 Attitude

Therefore, the mitigating factors that appear most effective in reducing the
risk of fraud (at an organizational level) are control procedures over attitude-related
risks Hermandez and Groot, 2007)

H2: There is a relationship between attitude and mitigating fraud in Malaysian Public
Sector.

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2.8.3 Ethical Values

Integrating a core ethical value of how things should be done in company

documents and by leaders, this developed fraud strategy shows that since its
inception the fraud unit has been able to increase recoveries of losses due to fraud
substantially on a year-to-year basis (Mangoensentono, 2011).

H3: There is a relationship between attitude and mitigating fraud in Malaysian Public
Sector.

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CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter is discussing on the research methodology that being used in this study. It
encompasses of ten main areas which are stated as follows:-

i. Purpose of the study vi. Unit of analysis

ii. Extent of researcher interference vii. Sampling design
iii. Study setting viii. Time horizon
iv. Research strategies ix. Data collection method
v. Measurement of variables x. Data analysis

Each of the areas were being explained in detail under the separate subheadings as below.

3.2 Purpose of the Study

The purpose of the study is to determine the factors that could give effect in mitigating fraud
in Malaysian Public Sector. Uma and Roger (2013) stated that the studies may be exploratory,
descriptive or also causal in nature. The authors have mentioned that the exploratory study could be
conducted when there is not much information is available on how the similar research issues been
done in the previous study. While, the descriptive study is to be undertaken to determine and to be
able to give description in the characteristics of the variables being selected. Also mentioned by both
authors that, the causal study need to have the theory or framework due to the independent variables
that actually will give effect to the dependent variable. Not to forget, the hypothesis testing also need
to have the logical theory.

This study will examine the relationship between the integrity capacity which consists of
leadership, attitude and ethical values and the mitigating fraud in Malaysian Public Sector. Hence, a
hypothesis testing is also will be taken into place in order to test whether if there is any relationship
between the independent variables with the dependent variable.

3.3 Extent of Researcher Interference

Uma and Roger (2013) mentioned that the extent of interference of the study done by
researcher with the regular flow at the workplace has a direct relevance bearing on whether the study
is causal or correlational. According to the authors, a correlational study being conducted in a natural
environment with a minimal interference by the researchers with normal flow of the events. The

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theoretical framework need to be developed by the researcher, then collect the relevant data and
analyse the data in order to get the findings.

This study is basically is using correlational study. Thus, the study will be conducted in the
natural environment. The objective of the study is to examine the relationship between the elements
of integrity capacity (leadership, attitude and ethical values) with the mitigating fraud in Malaysian
Public Sector. Only minimal interference will be expected with the normal flow of event to the study.
Hence, the survey questionnaires will be given to the respondents in their normal working
environment.

3.4 Study Setting

The study setting of the study can be either conducted in contrived or non-contrived settings.
According to Uma and Roger (2013), a non-contrived settings could be done in the natural
environment with minimal interference which the events normally occur. The studies that may be
done in non-contrived settings are also called the field studies and field experiments.

Hence, this study will be using a non-contrived settings as the study is done in the organization
as a field study where the research will be done in the natural environment of the Malaysian Public
Sectors’ workplace where the events proceed normally.

3.5 Research Strategies

Mentioned by Uma and Roger (2013), there are few ways in order to conduct the research
strategies which are by doing experiments, survey research, observation, case studies, grounded
theory, action research and mixed methods. According to the Authors, a questionnaire is a pre-
formulated written set of questions where the respondents will record their answers within a few
alternatives of answers. There are few way to collect the data through questionnaires, which are
personally administered questionnaires, mail questionnaires, and also electronic questionnaires.

Thus, the research strategies of this study is using survey research in collecting all the
information needed from the respondents whereby the structured questionnaires will sent out to
respondents and serve as a primary data in order to answer all the research questions and also
objectives. Therefore, the instruments of the survey will be customized accordingly in order to
examine the relationship between the integrity capacity and mitigating fraud in Malaysian Public
Sector.

3.6 Measurement of Variables

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In this chapter will basically be discussed on the measurement of all variables for the research
study. This study has three independent variables which are leadership, attitude and also ethical
values that need to be measured. All the variables are subject to reliability and also validity of a pilot
test study before the main survey will be conducted. Thus, that pilot study will predict the obstacles
and will make correction in the data collection method if there are any.

a. Mitigating Fraud

The survey on the mitigating fraud variable will fall under the Section B. The questions will
be developed in either positive or negative forms based on the previous research literature. Besides
that, the relevant questions on mitigating fraud will be developed according to the nature of working
environment of the Public Officials in the Malaysian Cabinets Ministers and Ministries.

For the measurement, Likert five-point scales will be used to measure this variable whereby
the respective respondents are expected to rate on a 5-point scale of agreement (‘Strongly Agree,’
‘Agree,’ ‘Neutral,’ ‘Disagree,’ and ‘Strongly Disagree.’).

b. Leadership

The survey on the leadership variable (element of independent variable which is integrity
capacity) will fall under the Sub-Section C. The section C in the questionnaires is focusing on the
integrity capacity which is the main independent variable. The questions will be developed in either
positive or negative forms based on the previous research literature. Besides that, the relevant
questions on leadership will be developed according to the nature of working environment of the
Public Officials in the Malaysian Cabinets Ministers and Ministries.

For the measurement, Likert five-point scales will be used to measure this variable whereby
the respective respondents are expected to rate on a 5-point scale of agreement (‘Strongly Agree,’
‘Agree,’ ‘Neutral,’ ‘Disagree,’ and ‘Strongly Disagree.’).

c. Attitude

The survey on the attitude variable (element of independent variable which is integrity
capacity) will fall under the Sub-Section C. The section C in the questionnaires is focusing on the
integrity capacity which is the main independent variable. The questions will be developed in either
positive or negative forms based on the previous research literature. Besides that, the relevant
questions on leadership will be developed according to the nature of working environment of the
Public Officials in the Malaysian Cabinets Ministers and Ministries.

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For the measurement, Likert five-point scales will be used to measure this variable whereby
the respective respondents are expected to rate on a 5-point scale of agreement (‘Strongly Agree,’
‘Agree,’ ‘Neutral,’ ‘Disagree,’ and ‘Strongly Disagree.’).

d. Ethical Values

The survey on the ethical values variable (element of independent variable which is integrity
capacity) will fall under the Sub-Section C. The section C in the questionnaires is focusing on the
integrity capacity which is the main independent variable. The questions will be developed in either
positive or negative forms based on the previous research literature. Besides that, the relevant
questions on leadership will be developed according to the nature of working environment of the
Public Officials in the Malaysian Cabinets Ministers and Ministries.

For the measurement, Likert five-point scales will be used to measure this variable whereby
the respective respondents are expected to rate on a 5-point scale of agreement (‘Strongly Agree,’
‘Agree,’ ‘Neutral,’ ‘Disagree,’ and ‘Strongly Disagree.’).

3.7 Unit of Analysis

There are few unit of analysis of the population to be studied which are individuals, dyads,
groups, organizations and also cultures (Uma and Roger, 2013). They added that, the unit of analysis
refers to the level of aggregation of the data that will be collected during the subsequent data analysis
stage.

This study is basically wanted to discover the number of public officials that believe the
elements of integrity capacity (leadership, attitude and ethical values) will eventually give effect to
mitigate fraud in the Malaysian Public Sector. Hence, the structured questionnaires will be sent out to
the Public Officials in the selected ministries in Malaysia. The unit of analysis will be individual as it
only focuses on the information gathered from the Public Official in the selected Ministries. The
questionnaires will be focusing on the relationship of the integrity capacity (leadership, attitude and
ethical values) in mitigating fraud in Malaysian Public Sector.

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3.8 Sampling Design

As mentioned by Rosli et al. (2015), the Malaysian Public Sector also previously known as
Malaysian Civil Service (MSC) is divided into three tiers of government which are, Federal Government,
State Government and Local Government (Azleen and Nurul Nazirah, 2013).

The study will be conducted among the departments and agencies that is under the Federal
Ministry in Malaysia. The respondents will be selected from the management of the department which
could be the top, middle or equivalent level to be the representative department. The questionnaires
will be sent out to all ministries with taking considerations of 85% success rate and 15% risk which is
considered to be good enough in the view of time and also cost constraints. As according to Roscoe
(1975), it is appropriate for most of the researchers in conducting their research study when their
sample size is larger than 30 and less than 500. Therefore, 430 questionnaires will be sent out to all
the 28 Malaysian Cabinet Ministers and Ministries in Malaysia to avoid any biasness in answering the
questionnaires and considered only 360 responses to give valid and complete responses which makes
85% success confidence rate. Therefore, about 16 questionnaires will be sent out to each department
in Malaysian Cabinet Ministers and Ministries. Time frame will be given to the respondent in order to
answer all the survey questions.

a. Sampling Techniques and Sampling Procedure

According to Uma and Bougie (2013), the elements in the population in the Simple Random
Sampling technique has an equal chance to be choose. They also mentioned that, it is chosen either
by draws lot or sample random digit, which is generated by the computers. Thus, the simple random
sampling has least bias and could offered more generalizations.

The population of this study will be the Malaysian Public Officials in selected Cabinet Ministers
and Ministries in Malaysia. A total number of 16 questionnaires been sent out to 28 departments in
the Cabinet Minister and Ministries in Malaysia. For the selection of which of the department to be
chosen in the 28 Cabinet Ministers and Ministries in Malaysia, haphazard sampling will be used in
distributing the questionnaires.

According to AICPA (2012, 31), haphazard sampling is a non-statistical sampling technique that
being used to approximate random sampling. The sampling will be selected without any conscious
bias and without any specific reason either to include or to exclude the items. A number of sampling
experts stated that haphazard sampling is a reliable substitute for random sampling (Deming, 1954;
Arkin, 1957; Wilburn, 1984). Thus, this study will be in choosing departments from each Ministries by

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using haphazard sampling techniques by choosing any one of the departments from the listings of
departments from each Ministries.

b. Instrumentation

For this study, the primary data would be collected from the respondents. The self-
constructed questionnaires with some adaption from the literature review will be administered in
order to collect the research study data from the respondent. Besides that, the information from the
reliable sources will also be administered to collect data.

There will be three sections in the survey questionnaires which are Section A, Section B and
Section C. The Section A will basically compromise on the profile of the respondents; Section B is where
the questions and opinions on mitigating fraud in Public Sector will be asked; Section C is the questions
on the elements of integrity capacity that will give effect in mitigating fraud. The Section C will be sub-
divided into three parts which is the first sub-section is questions on the leadership, the second sub-
section is questions on the attitude and the third sub-section is the questions on the ethical values.

According to John (2010), the nominal scale (also known as dummy coding) basically put
people, occasions, perceptions and so forth into classes based on some common trait. For this study,
in the questionnaires under the Section A is the questions that focuses on the demographic
information of the respondents. Therefore, nominal scale will be used in the Section A.

As mentioned by John (2010), the interval scale indicates the distance of one object from
another object. For this study, in the Section B and C of the questionnaires will be conducted using
the interval scale. The Likert five-point scales namely “Strongly Agree”, “Agree”, “Neutral”, “Disagree”
and “Strongly Disagree” will be used in this Section B and also Section C of the questionnaires. The
points will be assigned to the Likert five-point scales as mentioned beforehand as 5, 4, 3, 2, and 1
respectively. According to Rosli et al. (2015), in order to improve its quality, the questionnaires need
to be pre-tested and refined for the content validity. Hence, same goes to this study as the
questionnaires will be pre-tested and refined for content validity.

3.9 Time Horizon

Cross-sectional or one shot studies is where a study which the data are gathered just once, or
maybe over a period of days or weeks or months as in order to answer the research questions.

This study will be conducted as using cross-sectional studies as all the data will be gathered
just once. Hence, the data will be collected and gathered among all the Public Officials in all the
Malaysian Cabinet Ministers and Ministries. Each of the respondents will be given about two weeks’

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time in order to answer the research questions. All the answered questionnaires that being sent out
by normal mail will be collected by hand while the questionnaires that being sent out using e-mail will
be then received back through e-mail. The overall research time-frame will be done in two-month
time.

3.10 Data Collection Method

According to Uma (2003), data could be obtained from primary or secondary sources, which
is primary data would be referred to the information being obtained first-hand by the researchers on
their research studies. Besides that, there are few ways that the survey could be conducted which is
either to be personally administered, being sent out through mail or even electronically administered
(Uma, 2003).

This study will be collecting data using primary sources by sending out the survey instruments
through either being personally administered, sent through normal mail or sent through electronic
mail (“e-mail”). There are few processes that need to be done before sending out the questionnaires
as numerous telephone calls to be made in order to get the names, their full addresses and the
respective person in the Malaysian Cabinet Ministers and Ministries. Besides that, the explanation and
instruction will be provided in order to ensure that all the respondent able to understand the
questionnaires. As all the information of the respondent have been collected, then only the
questionnaires will be sent out to the respondents either by electronic mail (“E-mail”) or normal mail.

The detailed survey instrument via self-administered questionnaires developed using the
related literature review and not only that, it is also being developed from the reliable sources (i.e.
websites). Not to forget, the cover letter would be included as the introductory of the questionnaires.
In the cover letter, there would be some instructions and information on the research studies. Besides
that, the cover letter is also be inclusive of the researcher identification, motivation to be given to the
respondents in order to answer the questionnaires, the confidentiality information and last but not
least, to thanked the respondents in responding to the questionnaires of the research studies.

The questionnaires survey instrument is divided into four sections as mentioned below:-

a. Section A which is the first section of the questionnaires survey instrument is about the
general information from the respondents regarding their demographic profile. In this section,
the respondent need to provide some of the basic and fundamental information, as for
example their age, gender, type of organization, level of education, number of years’ services
in Public Sector and also their current position.

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b. Section B which is the second section is the questions and opinions on mitigating fraud in
Public Sector.
c. Section C is where the questions and opinions on the integrity capacity research elements that
will be leads to mitigate fraud. These section C is sub-divided into 3 sub-sections which is the
first one will be leadership, the second one is attitude and last but not least is ethical values.
The questions will be asked on the relationship between the integrity capacity and mitigating
fraud in Malaysian Public Sector.

There are few process need to be done before sending out the questionnaires as numerous
telephone calls to be made in order to get the names, their full addresses and the respective person
in the Malaysian Cabinet Ministers and Ministries. Besides that, the explanation and instruction will
be provided in order to ensure that all the respondent able to understand the questionnaires. As all
the information of the respondent have been collected, then only the questionnaires will be sent out
to the respondents either by electronic mail (“E-mail”) or normal mail.

As mentioned beforehand, the questionnaires will be sent out through personally

administered, normal mail or electronic mail (“e-mail”). The given time period to answer the survey
questionnaires is in two-week time. In order to avoid any low responses towards the returned
questionnaires, a gentle reminder by giving a telephone call or send a flagged email message with a
reminder in order to encourage or to remind the respondents of the actions that need to be taken.

3.11 Data Analysis

a. Reliability analysis

According to Uma and Roger (2003), a variable or set of variable is consistent on what to be
measured is the reliability. Cronbach’s alpha will be used as a tool to assess the reliability of the scales
and the ideal and reliable scale of Cronbach’s alpha with range greater than 0.6 (Hair et al, 2003). He
added that, the range is considered to be acceptable and good.

b. Validity analysis

Validity is referring to the ability of measuring the instruments in order to measure what it is
intended to be measure (Zikmund, 2003). There is a major threat to the validity analysis which is to be
the poor definition of terms or concepts. Therefore, by sending out the survey instruments, the validity
of the questionnaires could be confirmed by using the factorial analysis.

3.11.1 Descriptive analysis

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According to William (2006), descriptive statistics being used to describe the basic features of
the data in the study. He added that, the simple summaries about the sample and measures being
provided by the descriptive statistics. The table 1.0 being illustrated the descriptive analysis of this
study:

Variable Measurement Descriptive Statistics

Section A: Nominal – Category Measures of Central Tendency: Mode – Most
Demographic Scale frequently occurring phenomenon.
Information
Visual Summary: Bar Chart/Pie Chart/Clustered
Bar(s).

Measures of Relation Between Variables:

Contingency Table (cross-tab).

Section B: Dependent Interval – Likert Measures of Central Tendency: Mean – The

mean is just the average. It is the sum of all your
Variable Scale
measurements, divided by the number of
 Mitigating measurements.
Fraud Measures of Dispersion:
Minimum/Maximum/Standard
Deviation/Variance/Coefficient of Variation -
Range and quintiles of the data-set, and measures
of spread such as the variance and standard
deviation.

Visual Summary: Histogram/Scatterplot(s).

Measures of Relation Between Variables:

Correlations
Section C: Interval – Likert Measures of Central Tendency: Mean – The
mean is just the average. It is the sum of all your
Independent Variable Scale
measurements, divided by the number of
 Integrity measurements.
Capacity Measures of Dispersion:
Sub-Section C: Minimum/Maximum/Standard
Deviation/Variance/Coefficient of Variation -
Independent Variable Range and quintiles of the data-set, and measures
(Integrity Capacity) of spread such as the variance and standard
deviation.
 Leadership
 Attitude Visual Summary: Histogram/Scatterplot(s).

 Ethical Values

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Measures of Relation Between Variables:

Correlations
Table 1.0: Descriptive Analysis for Variables

The descriptive analysis will be used to summarize the samples and the descriptive
information on the data will be provided. The descriptive statistics will be used in this study such as
frequencies, mean, standard deviation and also cross tabulation. Besides that, all the collected data
will be presented in tables, graphs and also charts.

3.11.2 Correlation Analysis

According to Uma and Roger (2003), correlation analysis is basically a method or technique to
see the nature, direction and also the significance of the bivariate relationship. They also mentioned
that, it is a statistical measure of the co-variation of or association between two variables. Therefore,
in this study, correlation analysis will be used in order to test the hypothesis. According to Pallant
(2005), correlation analysis method being used to describe the relationship and also the strength
between two variables.

3.11.3 Multiple Regression Analysis

The multiple regression analysis also being used in this study. The analysis being used to test
the hypothesis as the regression technique being used to measure linear relationship between two or
more variables between dependent and independent variables which allows several independent
variables to predict a single dependent variable (Hair et al., 2007). In this study, multiple regression
analysis will also be used to examine the relationship between integrity capacity and mitigating fraud
in Malaysian Public Sector.

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