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Data Brief
Data Brief
Data in Brief
2352-3409
Elsevier

S2352-3409(24)00832-1
10.1016/j.dib.2024.110868
110868
Data Article
A survey dataset of ethical culture and financial reporting quality in Malaysian small and medium enterprises
Zainal Siti Faizah
Hashim Hafiza Aishah hafizaaishah@umt.edu.my
⁎
Mohamad Nor Raihan
Salleh Zalailah
Ariff Akmalia Mohamad
Faculty of Business, Economics, and Social Development, Universiti Malaysia Terengganu, 21030 Kuala Nerus, Malaysia
⁎ Corresponding author. hafizaaishah@umt.edu.my
24 8 2024
12 2024
24 8 2024
57 11086831 5 2024
15 8 2024
19 8 2024
© 2024 The Author(s)
2024
https://creativecommons.org/licenses/by-nc/4.0/ This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
This paper presents a dataset from a survey of the perception and experiences of owner-managers and accountants of SMEs concerning the ethical culture and financial reporting quality in their organisation. The dataset was collected from November 2022 to February 2023 using the convenience sampling method. A total of 181 valid responses from 218 responses were obtained during the data collection process. During instrument development, extensive pretesting was used to validate suitable questions for the respondents. The instrument was developed by adapting from prior studies and the inferences made from the qualitative survey prior to this study process. The survey was designed to elicit data from the owner-managers and accountants of SMEs concerning the relationship between the elements of ethical culture (i.e., formal systems, informal systems, leadership, and religiosity) and the financial reporting quality in SMEs. The dataset serves as an insightful reference for researchers, SME players, and policymakers to better understand the impending benefits of implementing ethical culture for improving the financial reporting quality among SMEs. In summary, the dataset, which was stored in a publicly available repository, can be conveniently used to quantify, and understand the organisational ethical culture in the context of SMEs.

Keywords

Ethical culture
Financial reporting quality
Owner-managers
Accountants
SMEs
==== Body
pmcSpecifications TableSubject	Business, Management and Accounting (General)	
Specific subject area	Business ethics and financial reporting quality	
Data format	Raw	
Type of data	Table, Survey data	
Data collection	The questionnaires were administered in two ways: i) interns in SMEs from the university were asked to act as the contact person for the researchers, and ii) for SMEs identified through the data collection process, the questionnaire survey was mailed to the SMEs or sent by hand.	
Data source location	All states in Malaysia	
Data accessibility	Data is included in this article
Repository name: Mendeley data
Data identification number: doi: 10.17632/xrhfp865fh.1
Direct URL to data: https://data.mendeley.com/datasets/xrhfp865fh/1	

1 Value of the Data

• The data enable researchers interested in ethical culture and financial reporting quality to gain insights into the perceptions and experiences of owner-managers and accountants of SMEs concerning this subject matter as well as verify the findings of the research.

• The value of the data in a study of ethical culture and financial reporting quality in SMEs lies in its potential to provide insights and contribute to various aspects of business, academia, and policymaking.

• The data can serve as valuable material for academic research, contributing to a deeper understanding of the relationship between ethical culture and financial reporting quality in SMEs. It can help scholars and researchers build upon existing knowledge and develop new theories.

• The dataset helps contribute to knowledge management related to the implementation of ethical culture and financial reporting quality attributes from the viewpoint of SMEs since no specific measurements for either variable were found in the prior literature.

• In general, this dataset possesses significant value for any examination associated with the context of small and medium-sized enterprises, particularly in the fields of accounting, corporate governance, and cultural analysis.

2 Data Description

This part of the article is divided into three sections. The first section provides the general specifications of the dataset and the questionnaire. The second section refers to the characteristics of the respondents, and the third section refers to the data distribution characteristics.

2.1 Dataset specifications

This article is associated with a questionnaire in portable document format (pdf) and a dataset file [1] in Microsoft Excel format, as supplementary material. The data files contain the respondents’ answers to the questionnaires. Each respondent had to answer 67 questions including the respondent's background. There are seven questions regarding the respondent's background (age, gender, race, academic background, position, type of SME, and industry). The file dataset has 181 entries of encoded answers (Table 1).Table 1 Description of the characteristics in the dataset.

Table 1Column	Data Label	Explanation	
A	Age	<30; 30–39; 40–49; >50	
B	Gender	Male; Female	
C	Race	Malay; Chinese; Indian; Other	
D	Academic	SPM/STPM; Diploma; First degree; Master's degree; Ph.D.	
E	Position	Owner-manager; Accountant	
F	SME type	Micro; Small; Medium	
G	Industry	Manufacturing; Construction; Services; Others	

The questions have been divided into three sections: section A) demographic profile, section B) ethical culture, and section C) financial reporting quality. In this study, ethical culture is the independent variable and financial reporting quality is the dependent variable. For section B, there are four dimensions of ethical culture – formal systems, informal systems, leadership, and religiosity. The questionnaire used a 5-point Likert scale, with 1 for “strongly disagree”, 2 for “disagree”, 3 for “neutral”, 4 for “agree”, and 5 for “strongly agree”. Regarding the dimensions for ethical culture, each of the dimensions has a different number of items: 10 items for formal systems [2], see Table 2; 7 items for informal systems [2], see Table 3; 10 for leadership [3], see Table 4; and 11 for religiosity [4], see Table 5. Then, for the dependent variable, financial reporting quality [5]. As seen in Table 6, six themes are included for the dependent variable. The scales for financial reporting quality use a 7-point Likert scale, with 1 for “strongly disagree”, 2 for “disagree”, 3 for “somewhat disagree”, 4 for “neutral”, 5 for “somewhat agree”, 6 for “agree”, and 7 for “strongly agree”.Table 2 Formal systems (answer scale = 1: Strongly disagree; 2: Disagree; 3: Neutral; 4: Agree; 5: Strongly agree).

Table 2Column	Data Label	Description	
H	B1	The code of conduct is widely distributed throughout the organisation	
1	B2	This organisation establishes procedures for employees to ask questions about the code of ethics	
J	B3	This organisation implements a code of ethics	
K	B4	Employees in this organisation regularly assert that their actions are in compliance with the code of ethics	
L	B5	This organisation provides ethics workshops	
M	B6	This organisation adopts a programme to protect whistle-blowers	
N	B7	This organisation organises dialogue sessions on ethical issues	
O	B8	This organisation provides training using meditation, silence, and contemplation	
P	B9	This organisation integrates ethical criteria in the evaluation of employees	
Q	B10	This organisation uses analytical guidelines to make decisions	

Table 3 Informal systems (answer scale = 1: Strongly disagree; 2: Disagree; 3: Neutral; 4: Agree; 5: Strongly agree).

Table 3Column	Data Label	Description	
R	C1	Employees in this organisation have opportunities to express their opinion	
S	C2	There is a specific scope to discuss unethical conduct in this organisation	
T	C3	If this organisation receives critiques on its employees’ behaviour, the employees will receive feedback, encouragement, and advice to change their action	
U	C4	This organisation uses meditation, silence, and contemplation in meetings	
V	C5	This organisation applies ethical behaviour based on standard business culture	
W	C6	Employees in this organisation are totally committed to the norms and values	
X	C7	Management is aware of the type of incidents and unethical conduct that occur in the working environment	

Table 4 Leadership (answer scale = 1: Strongly disagree; 2: Disagree; 3: Neutral; 4: Agree; 5: Strongly agree).

Table 4Column	Data Label	Description	
Y	D1	The manager sets an example of ethical behaviour in his/her decision making	
Z	D2	The manager communicates clear ethical standards to employees	
AA	D3	The manager keeps his/her actions consistent with his/her stated values	
AB	D4	The manager shows strong concern for ethical and moral values	
AC	D5	The manager sets an example of dedication and self-sacrifice for the organisation	
AD	D6	The manager puts the needs of others above his/her own self-interest	
AE	D7	The manager holds employees accountable for using ethical practices in their work	
AF	D8	The manager regards honesty and integrity as important personal values	
AG	D9	The manager is fair and transparent when evaluating employees’ performance and providing rewards	
AH	D10	The manager acknowledges mistakes and takes responsibility for them	

Table 5 Religiosity (answer scale = 1: Strongly disagree; 2: Disagree; 3: Neutral; 4: Agree; 5: Strongly agree).

Table 5Column	Data Label	Descriptions	
AI	E1	My religion supplies me with wisdom in adapting to situations in the workplace	
AJ	E2	I believe working hard is the characteristic of strong faith	
AK	E3	I work sincerely to seek God's pleasure	
AL	E4	I believe that every effort made at work will be rewarded in the Hereafter	
AM	E5	I work to bring prosperity to the world	
AN	E6	God will always guide my work if I start the day with prayer	
AO	E7	I know that I am being watched by God; therefore, I have to be honest at work	
AP	E8	I only work in a job that does not go against my religion	
AQ	E9	I follow my religion's law in my interactions at work	
AR	E10	I am pleased to give my best effort to help others	
AS	E11	I believe exhaustion from work will be blessed	

Table 6 Financial reporting quality (answer scale = 1: Strongly disagree; 2: Disagree; 3: Neutral; 4: Agree; 5: Strongly agree).

Table 6Themes	Column	Data Label	Description	
Relevance	AT	F1	Investment in the accounting department can improve the quality of the financial statements	
AU	F2	This organisation is largely minimising accounting and auditing costs at the expense of the quality of financial statements.	
AV	F3	Information in the financial statements helps prevent fraud and error	
AW	F4	Financial statements are the most important things for stakeholders to evaluate the performance of this organisation	
Faithful representation	AX	G1	The figures presented in the financial statements can always be trusted	
AY	G2	The independent auditor's report is important in evaluating the quality of the financial statements	
AZ	G3	Higher-quality financial statements will result in a more transparent accounting system	
BA	G4	Independent audits reduce misstatements in the financial statements	
BB	G5	This organisation has a high potential for creating creative accounting to avoid taxes	
Comparability	BC	H1	This organisation produces more trustworthy financial statements today than five years ago	
BD	H2	Current accounting standards are sufficient to ensure high-quality financial statements	
BE	H3	The development of accounting standards during the previous years has improved the financial statements	
BF	H4	Systematic tax planning is important to this organisation to be able to stay competitive	
Verifiability	BG	I1	Auditors involved in this organisation are independent and knowledgeable in assuring the quality of the financial statements	
BH	I2	The information used to prepare the financial statements can be accessed by the auditor	
BI	I3	The information used to prepare the financial statements is adequate for the auditors	
BJ	I4	The top management has the possibility to make adjustments to the financial reports without having conflicts with the preparers of the reports.	
Understandability	BK	J1	The users of the financial statements have a high overall understanding of the material	
BL	J2	Financial statements are prepared for users who have a reasonable knowledge of the business and economic activities in this organisation	
BM	J3	Financial statements are prepared for users who review and analyse the information diligently in this organisation	
Timeliness	BN	K1	The timeline of financial information will affect the decision making	
BO	K2	The auditors take ample time to sign the auditor's report	

Respondents were required to evaluate the survey questions based on their own understanding of the subject matter. The different scales between the independent variable and the dependent variable were to ensure that the respondents were attentive to the questions to capture the participant's true evaluations. Different scales were used to prevent the respondents from choosing different, inaccurate responses, or ignoring the items entirely. Skipping items when answering the questionnaire might result in missing data or invalidate the data [6]. In more detail, the supplementary file, the Excel file, is the clean version of the entries for the encoded answers. The data were checked using Microsoft Excel to identify any issues among the questionnaires collected.

The original questionnaire was provided in both Malay and English. Malay is the native language for the respondents. For the purpose of the article, the questionnaire attached in the supplementary file is in English [1]. As the aim of the study is to explore the relationship between ethical culture and financial reporting in SMEs, the owner-managers and accountants of SMEs were chosen as respondents for the study.

2.2 Respondent's profile

The analysis of the demographic profile of the respondents begins with (1) the age of the respondents, followed by (2) the gender of the respondents, (3) race of the respondents, (4) academic background, (5) position in the SME, (6) type of SME, and, lastly, (7) the industry in which they are involved. More specifically, most of the respondents are 30 to 39 years old (N = 61, 33.7 %), male (N = 99, 54.7 %), have a first degree (N = 59,32.6 %), with 6 to 10 years working experience (N = 57, 31.5 %), and are owner-managers of the SME (N = 130, 71.8 %) (Refer to Table 7).Table 7 Respondents’ profile (Participants N = 181).

Table 7:Demographic	Description	Frequency	Percentage (%)	
Age	<29 years old	41	22.7	
	30–39 years old	61	33.7	
	40–49 years old	48	26.5	
	>50 years old	31	17.1	
Gender	Male	99	54.7	
	Female	82	45.3	
Race	Malay	135	74.6	
	Chinese	35	19.3	
	Indian	11	6.1	
Academic background	Diploma	25	13.8	
	First degree	59	32.6	
	Master's degree	51	28.2	
	PhD	23	12.7	
	SPM/STPM	23	12.7	
Working experience	< 5 years	50	27.6	
	6–10 years	57	31.5	
	11–15 years	39	21.5	
	> 16 years	35	19.3	
Position	Owner-manager	130	71.8	
	Accountant	51	28.2	

2.3 Distribution characteristics

To collect data, SMEs were approached in two ways: i) SMEs via the intern in place and ii) SMEs identified through the data collection process. A total of 546 questionnaire surveys were distributed to the target respondents identified. The intern in the SMEs acted as the contact person to update on the responses from the respondents. The portion that was distributed via industrial students was about 9 percent (50/546) following their agreement to act as the point of contact. The rest of the data collection (496/546 = 91 %) was done by identifying SMEs through related agencies, through the SMEs group activities, and by physically locating the SMEs companies in Malaysia. The questionnaires were distributed either by hand or by mail.

3 Experimental Design, Materials and Methods

3.1 The structure of the questionnaire

The questionnaires were developed with a combination of the ethical culture concepts and institutional theory approaches adapted in prior studies. This study underpins the institutional theory due to the influence of social and normative pressures on organisational behaviour. Ethical culture and financial reporting quality are shaped by the norms, values, and expectations prevailing in the environment in which SMEs operate. Institutional theory helps to understand how these external forces shape and constrain the actions and decisions of SMEs regarding ethical conduct and financial reporting practices [7]. By applying institutional theory, researchers can explore how SMEs conform to institutional pressures related to ethical culture and financial reporting quality, and how these pressures affect their behaviour.

The questionnaires were developed by adapting the questionnaire from previous studies. Hulland et al. [8] recommended thorough pre-testing to ensure that respondents understand the questions in the research instruments to avoid confusion. A pre-test with cognitive interviews involving six participants (SME managers, accountants, and academicians) was conducted from 9 to 27 October 2022. The goal was to assess and validate the instruments for alignment with the study's objectives [9]. This process aimed to identify and address any issues in the research instruments to enhance clarity and realism. The results showed that the actual questionnaires were fit and suitable for the respondents to answer the questions properly.

Table 8 illustrates the author details of the final questionnaires adapted from prior studies after extensive pretesting was conducted.Table 8 Cronbach's alpha.

Table 8:No	Surveyed aspects	No of items	Authors	Cronbach's alpha	
1	Financial reporting quality	22	Trevino et al. (1998)	0.962	
2	Formal systems	10	Trevino et al. (1998)	0.890	
3	Informal systems	7	Yukl et al. (2011)	0.820	
4	Leadership	10	Adawiyah and Pramuka (2017)	0.867	
5	Religiosity	11	Edlund (2011)	0.937	

There are three sections in the questionnaires. Firstly, section A. This section records the specific characteristics of the respondents of the survey questionnaires. It consisted of seven (7) questions about the characteristics of the respondents. While for section B, this section is the independent variable of the study, which is ethical culture. There are four subsections in section B (ethical culture). Each construct has specific characteristics. For formal systems, respondents were asked to answer 10 questions about their agreement with their organization's formal systems. Higher scores indicate a stronger agreement with the formal system, while lower scores suggest less agreement. For the informal systems, respondents were asked to answer 7 questions about their agreement with their organization's informal systems. Higher scores indicate a stronger agreement with the informal system, while lower scores suggest less agreement. For leadership, there were 10 questions that the respondents need to answer concerning whether or not they agreed with the leadership for the organisation. Lastly, there were 11 questions for the religiosity construct. For this section, a 5-point Likert scale was used.

For the last section, which is section C, this section is the dependent variable section, which is financial reporting quality. Six themes were included in the questionnaire. These six themes were the dimensions of the financial reporting quality and did not act as separate variables. For this section, a 7-point Likert scale was used.

The questionnaires have been adopted from an English version and have been translated into Malay. The translation process has been reviewed by Ph.D. supervisory committees and the English version has been proofread by professional proofreader.

3.2 Data collection

A structured questionnaire was sent to all identified SMEs in Malaysia (N = 546) since the researchers did not have access to information for the whole population of SMEs in Malaysia. The survey was collected from November 2022 until February 2023.The data were acquired from the responses on the hardcopy of the survey and from the hardcopy of those who answered using the Google form (barcode provided on the hardcopy survey). In total, 218 SMEs owner-managers and accountants answered successfully. Upon further checking, only 181 of them were valid for the purpose of data analysis. Twenty-six responses were identified to have straight line answers in the data, causing 12 % of the responses to be removed from the sample. Further, 11 (5 %) responses could not be used as the respondents were not the target respondents for this study.

3.3 Data method

The study used convenience sampling for data collection, acquiring information from readily accessible population members; information or data for the research was acquired from members of the population who were easily accessible to the researcher [10]. The data were obtained via i) the university students that served as interns at the SMEs as the medium to contact the owner-manager and accountant of the SMEs to ask for their consent to be the respondents. Only 50 out of the 546 (9 %) questionnaires were distributed to the SMEs with interns in place, and the balance of the questionnaires were distributed by ii) identifying SMEs via related agencies, through the SMEs group activities, and physically locating the SMEs in Malaysia. The SMEs were approached through calls, emails, and by going to the SMEs to ask for consent to be the respondents. The ethical approval was approved by the university and the ethical process was followed to ensure that the procedures for the data collection were conducted in an ethical way.

A convenience sampling was used in the study due to cost constraints and the limitations of the population of SMEs. The actual data were not publicly available, and it would be costly to obtain the information from the Registrar of Companies (ROC) in Malaysia. All the respondents’ companies are registered with the ROC in Malaysia. This research attempts to avoid any potential selection bias such as having to select most of the well performed companies or vice versa by obtaining various sources of data such as from related government agencies; and several companies that already had linkages with universities. The researcher also has visited various locations that have a high population of businesses which has a high density of business population in Malaysia. Given these various data sources, the selection of samples is inclusive and has an equal chance of being selected.

To be precise, the reliability of the questionnaire was measured using the Cronbach's Alpha value. Among the 5 surveyed aspects, the Cronbach's Alpha value of each aspect was above 0.7 (Table 8) indicating a good level of reliability, as recommended by [11].

Ethics Statement

In this study, data collection met the ethical concerns by ensuring that information obtained from the respondents was used solely for the purpose of research and was kept confidential throughout and after the completion of the research. The study obtained ethical approval from Universiti Malaysia Terengganu; the ethical protocol number is UMT/JKEPM/2022/89. Informed consent was obtained from all participants in this study.

CRediT Author Statement

Siti Faizah Zainal: Conceptualization, Writing – Original draft preparation, Methodology Hafiza Aishah Hashim: Supervision, Funding acquisition Nor Raihan Mohamad: Data curation, Writing – Review & Editing Zalailah Salleh: Formal analysis Akmalia Mohamad Ariff: Visualisation, Investigation.

Appendix Supplementary materials

Image, application 1

Image, application 2

Data Availability

Panel Dataset on Ethical Culture and Financial Reporting Quality in Malaysian Small and Medium Enterprises and Financial Reporting Quality in Malaysian Small and Medium Enterprises (Original data) (Mendeley Data).

Acknowledgments

This work was funded by the Fundamental Research Grant Scheme (FRGS) FRGS/1/2020/SS01/UMT/02/3 provided by the Ministry of Higher Education of Malaysia. The authors would like to thank the Ministry for the support.

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Supplementary material associated with this article can be found, in the online version, at doi:10.1016/j.dib.2024.110868.
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