2 - CIMA's Code of Ethics

Question 1

what are the responsibilities of CIMA and its members when it comes to ethics

Answer 1

• duty to protect public interest
• IFAC requires CIMA to apply standards no less stringent than IFACs, it is constantly revised
• CIMA Code of Ethics For Professional Accountants = standards expected of members
• members expected to use them in everyday reasoning

Question 2

CIMAs code of ethics AIMS

Answer 2

• identify nature of personal responsibility accountants have
• provide guidance on identifying situation s where there may be ethical pitfalls
• provide guidance on how to address pitfalls and difficult qs

Question 3

CIMAs code of ethics FUNDAMENTAL PRINCIPLES

Answer 3

• objectivity = free from bias
• professional competence and due care = technically competent
• professional behaviour = not doing anything to negatively impact reputation
• integrity = honest and straightforward
• confidentiality

Question 4

what are the instances whereby confidential information can be disclosed

Answer 4

• permitted by law
• permitted by client or employer
• required by law
• permitted by professional duty or right

Question 5

what are the 5 groups of threats to fundamental principles

Answer 5

1. self interest = conflict of interest
2. self review = they wont appropriately evaluate results of previous judgement
3. advocacy = promote clients position to point where objectivity is compromised
4. familiarity = too sympathetic to interests
5. intimidation = perceived pressures

Question 6

actions to overcome threats

Answer 6

1. eliminate circumstances causing threat
2. apply safeguards to reduce level of threat
3. decline/end professional activity

Question 7

what are cima’s safeguards

Answer 7

• education/training
• corporate governance requirements
• duty to report ethical breaches
• professional/regulatory monitoring
• complaints systems

Question 8

other non cima, workplace friendly safeguards

Answer 8

• internal controls and oversight
• ethics/codes of conduct
• stricter recruitment procedures
• disciplinary processes
• ethical leadership
• awareness of communication channels

Question 9

personal qualities that CIMA expect of their members

Answer 9

1. reliability
2. responsibility
3. respect
4. timeliness
5. courtesy

Question 10

professional qualities that CIMA expect of their members

Answer 10

1. independence of mind (iom)
2. independence of appearance (how others perceive your iom)
3. professional scepticism = applying right level of scepticism
4. accountability
5. social responsibility

Question 11

which terms are identified in the CGMA responsible business report

Answer 11

• responsible business = ESG and economic way of operating
• business ethics = business principles and application of values
• ethical performance = actual behaviour corresponding to values
• ethical management information = quant/qualitative to allow performance evaluation
• integrated reporting = non financial info included

Question 12

examples of ethical issues for organisations

Answer 12

• data/info security
• discrimination
• human rights
• conflict of interest
• bribery
• supply chain management
• responsible marketing
• remuneration policies
• whistleblowing
• employee safety

Question 13

why produce a code of ethics

Answer 13

help prevent misconduct

Question 14

how do businesses ensure behaviour reflects values

Answer 14

commit to identified core values eg integrity, honesty, respect etc

Question 15

how to emphasise code

Answer 15

embedded into communications and training to integrate into culture

Question 16

bad practices when it comes to ethical codes

Answer 16

• allowing exceptions
• only putting copy on noticeboard
• failing to investigate breaches
• failure to feature code in training
• senior management not following code
• treating code as internal document
• not allowing staff easy access
• not reviewing code regularly
• failing to get board commitment to code

Question 17

benefits of making ethical values explicit

Answer 17

• increased employee loyalty/morale
• improved reputation
• attracts high calibre staff
• open and innovative culture
• reduced borrowing/insurance costs
• reduces integrity risk

Question 18

what is cimas definition of professional development

Answer 18

development of personal qualities eg communication, assertiveness, time management etc
have to be developed

Question 19

what is cimas definition of lifelong learning

Answer 19

individual never stops learning and open to new skills, behaviours etc

Question 20

stages in CIMA development cycle are

Answer 20

1. define = define roles
2. assess = identify knowledge gaps
3. design = construct activity programme
4. act = undertake learning activities
5. reflect = assess if further training needed
6. evaluate = any gaps rolled into next cycle

Question 21

examples of development activities

Answer 21

• reading professional publications
• computer based training
• research and project work
• attending cima events

Question 22

how does the work accountants produce impact the public and shareholders

Answer 22

AUDIT WORK = public relying on audited accounts
ACCOUNTANCY WORK = accurate prep of accounts essential for evaluating profitability and taxation
INVESTMENT DECISIONS = accurate investment analysis to determine where money best placed

Question 23

what are the three aspects of the guidance entitled ‘embedding ethical values’ from CIMA joint with Institute of Business Ethics

Answer 23

1. ensuring business behaviour reflects ethical values: identify core values
2. why produce a code of ethics? help prevent misconduct
3. is a code enough? codes to be embedded