Ethics, Fraud in accounting, Risk management. Worksheet 2 Flashcards
1.Explain the meaning of the term ethics.
Ethics means knowing what is right or wrong- it refers to the set of principles embraced by the community.
2.Discuss ethics in the job/work environment.
It is important for a business to be ethical. All operations, decisions and treatment of their employees and customers must be in a way that does not harm them. Businesses should have policies which show that they are ethical.
Businesses should be ethical in:
- Advertising
- Sales
- Negotiation
- Pricing
Employees should know the ethics of the business where they work and they must obey the ethical policies of the business, for example:
- What the business sells
- The safety & liability of the products for sale.
3.Explain how fraud is committed in a business environment.
Fraud is committed when employees steal:
- Money
- Time
- Goods
Businesses commit fraud when it:
-Does something in a dishonest or illegal way so that it has an advantage.
Suppliers commit fraud when:
-They deliberately charge your business too much for goods that you have ordered.
4.How can fraud be combated ?
Businesses can combat fraud by implementing fraud prevention policies. These could include:
- Know your employees
- Train them in fraud prevention
- Make employees aware of the policies & the consequences of not following them.
- Financial risk management
5.Explain financial risk management.
Financial risk management includes:
- Measuring & managing credit risk
- Measuring & Managing operation risk
- Managing commodity & energy risk
- Market & liquidity risk
6.How can Financial risk managing help with combating fraud?
Financial risk management helps to combat fraud because it contributes to better decision making and increases performance.
7.Name three thing businesses should do to be successful.
- Be ethical
- Combat fraud
- Do financial risk management
