Ethics Ch 6 Flashcards
Business ethics and codes of conduct
Guidelines drawn up by an individual organisation which set out its values and governs decisions and actions in the organisation w
Tone at the top
The ethical atmosphere that is created in the workplace by the organisations leadership
Disciplinary action
Processes and sanctions that a professional accounting body can carry out if its member is accused of non compliance with its regulations and the code of ethics
Sanction
A threatened Pena,ty for disobeying the law
Internal whistle blowing
Telling someone more senior within the organisation about something illegal or unethical within the organisation that the employee works for
Public interest disclosure act 1998 (PIDA)
A statute that protects employees who make disclosures of confidential information that they believe to be in the public interest
Statute
A written law or rule
Proceeds of crime act 2002
A statute that sets out the law in relation to financial gains made from illegal acts
Terrorism act 2000
A statute that sets out the law in relation to terrorism financing
Money laundering regulations 2007
The regulations governing the crime of money laundering
NCA national crime agency
NCA is a crime-fighting law enforcement agency responsible for proactive operations against serious and organised crime including money laundering
Suspicious activity report
A report submitted to NCA giving details of suspected money laundering
Required disclosure
Disclosure of money laundering must be made when an accountant knows or suspects money laundering on the part of the client
Protected disclosure
Disclosure of a suspicion of money laundering is protected against allegations of breach of confidentiality
Authorised disclosure
Disclosure by a person who realised they may have engaged in money laundering or are about to engage in money laundering
Failure to disclosure
Failure to tell the relevant authority about a suspicion or knowledge of money laundering
Prejudicing an investigation
Making a disclosure that is likely to adversely affect an investigation into suspected money laundering
Prejudicing
Interfere / make harm to
Tipping off
The criminal offence of warning an individual that he or she is suspected of money laundering.
Customer due negligence
Evaluating prospective business decisions by investigating relevant financial legal and other Important information about the other party
Each professional body in the uk has based its own ethical code on that issued by the IESBA
And this consistent approach to professional ethics means that the public interest will be protected together with the reputation of the professional accounting bodies
In addition to the guidance on professional ethics published by professional bodies many organisations will have their own code of what.
Business ethics
What are business ethics
These set out the guidance in the conduct and va,use that govern decisions and actions within that individual organisation. This code is designed to help an individual in an organisation faced with an ethical dilemma to make the right choice
Also ensures there is consistency in the conduct of all employees
The code of ethics prescribers a principle based approach rather than a rule based approach
.
Each company will include different elements which it considers are important. Eg
Compliance with the law, competing fairly, his to act with integrity in all business dealings, treating suppliers and customers properly, treating co workers respectfully, contributing to a healthy safe workplace, respecting the environment, respect human rights, maintain Hugh standards of financial record keeping
Legal status of codes of conduct
When a company introduces a ethical code of conduct, this is not legally enforceable. However some elements of the code made be based on a law
Healthy and safe work place ethical code, this is also regulated by the healthy and safety work act
.
When was the institute of business ethics established
1986- to encourage high standards if business behaviour based in ethics values.
IBE
Institute of business ethics
The IBE produced a simple ethical test for a business decision . Which 3 elements are included
Transparency- do I mind others knowing what I have decided?
Effect- who does my decision effect?
Fairness- would my decision be fair by those effected?
Managements Attitude to ethics will have a trickle down effect on employees of the company. Emplyees will be more inclined to uphold ethical values
Tone at the top
Reputational risk
Something that threatens the good name of a business or its reputation. The direct actions of a business or the actions of one or more employer. Or a third party that is linked to the business
Cause loss in profit, resign of employees, reluctance on the part of supplies and customers
What should a business do to avoid reputational Risk?
Good codes of conduct (manner in which arose behaves) strong governance (rule, control) and be transparent in dealings (would you be happy others seeing what decisions you’re making)
Organisations should also comply with the spirit of regulations, ie how regulations are expected to work in practice
.
Ethical Organisation values that should be included in a businesss code of practice.
Being transparent with colleagues, customers and suppliers, eg not hiding things in small printed contracts, or telling customers you can provide them with a product or service that is not Available.
Producing management accounts promptly and accurately for use by colleagues in the business
Reporting financial and regulatory information clearly and on time
Defining including specific policies in the organisation code of practice that gifts can only be accepted if they are less that £20
Being open and honest by identifying when it is appropriate to accept gifts and hospitality
Eg ensuring that all suppers regardless of size are paid in terms eg within a 30 day period of reviving an invoice
Paying suppliers a fair price and on time
Eg ensuring a regular review is carried out for staff who work on computer terminals to ensure workstations comply with healthy and safety regulations
Providing fair treatment decent wages and food working conditions for emplyees
Ensuring all members of staff do not use social media to say offensive things about their competitors
Using social media
Not hiding things in small print of contracts
Being transparent
