Ethics in the Workplace Flashcards
IESBA stand for?
International Ethics Standards Board for Accountants
5 components of IESBA code of ethics/fundamental principles
- Integrity
- Objectivity
- Competence/Due Care
- Confidentiality
- Professional Behaviour
INTEGRITY
- honest
- open about limitations of knowledge
- accurate
- efficient
OBJECTIVITY
- no bias/prejudice
- no conflict of interest
- impartial
- not influence
COMPETENCE/DUE CARE
- act diligently
- comply with standards
- ensure have relevant skills/experience to comply
- CPD Continuing Professional Development
- avoid carelessness
COFIDENTIALITY
- deal with sensitive info
- cases where required by law to reveal- tax evasion/money laundering
- Bodies have ethics departments to help
PROFESSIONAL BEHAVIOUR
- not threaten accounting as a profession
- act within letter of law
- when advertising- truthful claims
- courtesy
Procedure for complying with fundamental principles
- identify threat
- evaluate how significant
- apply safeguard to eliminate/reduce
- if no safeguard then decline/discontinue service
Main Threats to fundamental Principles
- Self-interest - fee dependence on one client
- Self-review
- advocacy - promoting point past when realise its wrong
- familiarity- personal relations
- intimidation - threats to deter from complying
Safegaurds against threats to Fundamental Principles in legislation/Profession
- education
-training - experience
- CPD
- Corporate Governance
- Professional Standards/Discipline procedure
- External review
Safegaurds against threats to Fundamental Principles in Workplaces
- quality control/internal audits
- staff protected if raise concern
- 3rd party involvement
- rotation of personnel- avoid familiarity
- discuss ethical dilemmas
Roles of Executive Directors
- works for company
- management of affairs
- elected by shareholders
The Board
Collection of Directors
Chief Executive
- runs company on day to day basis
Chairman
- runs board
- ensures no director goes beyond their control
Non-executive directors
- independent people not employed
- equal in number to executive
- broaden experience of board
- UK approach
-difficult to find right people - audit committee
- renumeration committee
Audit Committee
- internal audit
- relations with external auditors
- relevant financial experience
Renumeration Committee
- directors pay/benefits
- bonuses from measurable performance
- ensure all recorded in accounts
Comply or Explain Process
Corporate Governance is not law but must show how complied and justify why deviated if have
Corporate Social Responsibility
- obligation to consider interests of all stakeholders
- including environment/communities
Proactive Corporate Social Responsibility
full responsibility for actions
Reactive Corporate Social Responsibility
wait for complaints then change
Defence Corporate Social Responsibility
attempt to avoid obligations caused by problem
- gamble/drink/smoke responsibly
Accommodation Corporate Social Responsibility
Accommodate concerns of public/government to prevent stricter legislation
Arguments for CSR
- show self-restraint of their power
- As depend on society infrastructure should be positive member
- externalities- address enviro consequences
- public relations
Arguements against CSR
- Not key objective, wealth is
- company already fund society through taxes
- up to shareholders to donate dividends rather than company
