S2 - ethics Flashcards
what is customer perceived ethicality
brand image and reputation
impacts customer behaviour
Company thinks about what they say and do - different to having principles that actually make changes
what are the five types of breakdowns that ar most often seen in decision making
ill conceived goals
motivated blindness
indirect blindness
slippery slope
overvaluing outcomes
what are Kidders ethics tests
the legal test
the intuition test
the publicity test
the moral exemplar test
what is corporate governance
Corporate governance
structures and systems in place within an organisation to direct and control
Rules, practices and processes
Mechanisms which distribute the decision making process and monitor and control that decision making
Within company, appointed by company or surround the company
Should involve high degree of ethical standards
what is ESG investing
application of a set of standards, externally agreed or intrinsic to investor, to screen investment opportunities
AKA sustainable investing, responsible investing, impact investing, socially responsible investing
Investor checks range of behaviours and policies from top of leadership
Better at ESG = less availability and cost of capital
what is the ESG conceptual framework
requires active consideration of issues
Establishes basic principles
Can be applied to differing circumstances
Responsive to rapid change
Requires judgement rather than literal interpretations encouraged by a pure rules approach
what are ICAEW fundamental principles
professional competence and due care
Integrity
Professional behaviour
Confidentiality
Objectivity
what are the ethical threats
self interest
Self review
Advocacy
Familiarity
Intimidation
what are the main areas for concern in fraud and bribery
models to help professionals understand and assess the likelihood of fraud or misconduct taking place
Incentives and pressures - enticements can tempt individuals to commit ethically questionable acts
Opportunity - complexity - acting on insider knowledge, high turnover, lax monitoring
Attitudes and rationalisations - corporate culture - difficult to understand internal pressures
what is the fraud triangle and diamond
perceived opportunity, perceived pressure, rationalisation
incentive, opportunity, rationalism, capability
what is bribery- official and commercial
be vigilant
Suspicious transactions
Gifts, preferential treatment of expressions of gratitude
Official and commercial
bribery of officials is a serious crime
Commercial bribery is less defined. Could be a breach of contract/serious crime/nothing
