Consequences of Poor ethics Flashcards
Syllabus A2
What is the obvious consequences for unethical members?
Professional disciplinary proceedings
What will the result be for Professional disciplinary proceeding?
1) Fine
2) No longer be a director
3) Expelled from your professional body
What is a social responsibility?
Looking after society and environmental costs which will bring an increase in sales
Companies who have social responsibilities - What are they known as?
Corporate Citizens
What happens if you do not take CSR seriously?
Lose in investment and sales
Person who controls 30% of the reporting entity?
Related party or not
Yes related party, this is not a group.
What does significant influence mean?
If a close member had significant influence on reporting entity, is he a related party?
Significant influence is the power to participate in financial/operating policy but not control.
Yes Related party
What do key member of management have?
What is their function?
Are they a related party
They have authority and responsibility
To direct control and plan activities
They are a related party
If the person is a key member of management in Company A and Company B owns 80% of Company A.
Would the CEO if Company B be a related party?
Yes, CEO will be a related party because Company B has control over Company A
If Entity A has 80% control over Entity B and Entity B has 70% control over Entity C.
Is Entity A and Entity C related party?
Yes Entity A and Entity C are related party
If Entity A owns 80% of Entity B and 30% of Entity C?
Are all entities a related party?
Yes all are related parties.
If Entity A and entity B share and control Entity D( Joint Venture) and Entity A and Entity C share and control entity E ( Joint Venture).
Is Entity D and Entity E related parties?
Yes Entity D and E are related because they are both joint venture of the same entity ( Entity A)
If entity A and Entity share and control Entity D and Entity owns 40% of Entity E.
Is Entity D and Entity E related parties?
Yes Entity D and Entity E is related. Although Entity E is an associate however Entity D is a Joint venture of the same entity ( Entity A) which makes enough for both entities to be related.
If entity A is putting money into Pension Fund A, are they related?
Yes they are related
If entity A is putting money into Pension Fund A. Entity A owns 80% of Entity B and Entity B puts money into Pension Fund B. Is Entity B and Pension Fund A related?
Yes they are related.
Mr A owns Entity A by 90% and Mrs B owns 30% of Entity B.
State which parties are related
All Parties.
Mr A controls entity A however Mr A can be significantly influenced by Mrs A who owns 30% of Entity B - Associate ( Vice versa).
If entity A provides CFO Services or provide key management personnel to Entity B who owns 90% of Entity C.
Is Entity A and Entity C related parties?
Yes they are related
If entity A has 30% control over Entity B and Entity A has 40% control over Entity C.
Is Entity C and Entity B related parties?
No they are not.
Common associates between two entities are not related parties. One of them has to be Joint Venture.
If the person is a key member of management for Entity A and entity B.
Is entity A and entity B related parties?
No, they are not related.
Although decisions are made by the same person, both entities do not affect each other.
If entity A and B share and control the Entity C. Is Entity A and Entity B related parties?
No they are not related parties.
Is Public utilities and trade unions a related parties?
No they are not related parties
Is a customer or supplier a related party?
No they are not related parties
Is an agent or distributor a related party?
No they are not related parties
Is Government department or provide finance a related party?
No they are not related parties
Related parties are those who?
Control, Joint control, Significant influence and is a key management
If Government department do control companies, are they are a related party?
Yes they are a related party
What do you need to disclose for related parties?
1) Group Relationships, Key Management Personnel and Transactions.
Are there any exemptions for disclosures for the Government? If yes, state what they are
Yes there are. They are exempt disclosing transactions, balances and commitment.
However they should disclose relationship parties and individual significant transactions
