3 - Ethical Dilemmas Flashcards
what is the cima code and what do breaches mean
the law of the institute
breach = disciplinary actions
how do the cima code and law interact
law overrides everything
what do you do if a contract overrides cimas code of ethics
you have a choice to not comply if you would break cimas code
consequences of unethical behaviour for the accountant
- disciplinary hearing
- fined
- losing job or can no longer practice
- personal reputation damaged
- potential prosecution
- sued for damages
consequences of unethical behaviour for accountancy profession
- loss of reputation
- reduced employability
- pressure by outside bodies to tighten regulations
- government intervention
- bodies losing chartered status
consequences of unethical behaviour for the business
- loss of reputation -> sales
- legal action
- resignation of high calibre staff
- business closure -> redundancy
consequences of unethical behaviour for society as a whole
- distrust for all accountants
- companies failing from loss of public confidence
- financial markets affected
- authorities questioning tax collections
- may attract criminal activity
- commercial organisations unable to function
types of values that conflicts may arise between
- societal = national law
- personal = individual
- corporate = corporate codes
- professional = professional body
what can cause ethical tension
contrasting demands of stakeholders
types of stakeholders
NON FINANCIAL = interested in how company behaves including media, competition and regulators
FINANCIAL = groups suffering directly if something happens to organisation eg shareholders, employees, customers, suppliers
examples of ethical dilemmas
- pressure from colleague/friends
- acting contrary to professional standards
- publication of misleading info
- doing work beyond technical remit
- personal relationships with clients/employees
- bribery
what is cimas ethical checklist
- check all facts
- is it ethical?
- is the issue legal in nature?
- identify fundamental principles engaged
- identify any affected parties
- consider courses of action
- seek legal/professional advice
- refuse to be associated with conflict
- transparency
- effect
- fairness
if there is an ethical dilemma what should be done
accountants should always respond to ethical conflict
silence/inactivity = may be breach of code
