The Imortance Of Ethics - 30%

Question 1

What are the three sources of rules governing behaviour

Answer 1

• ethics
• non legal rules and regulations
• the law

Question 2

Ethics

Answer 2

A set of moral principles that guide behaviour

Question 3

Define business ethics

Answer 3

The application of ethical values to business behaviour

Question 4

What’s comes before ethical behaviour ?

Answer 4

An individual or company must first meet legal and non- legal obligations BEFORE ethical behaviours

Question 5

What are the 4 levels of behaviour going from most important to least

Answer 5

1. Unlawful/unethical
2. Lawful
3. Meet regulatory obligations
4. Ethical

Question 6

What are the four schools of ethics

Answer 6

Virtue ethics
Deontological ethics
Utilitarianism
Consequentialist

Question 7

What are the virtue ethics ?

Answer 7

Virtue such as justice, charity and generosity are dispositions to act in ways that benefit both the person possessing them as well as society.

This approach is advocated by Cima

Question 8

What are deontological ethics ?

Answer 8

Makes ‘duty ‘ a central concept in morality, imposing a need to obey rules. Such as a persons actions can be justified by the outcomes. This is also described as the normative approach

Question 9

What is utilitarianism

Answer 9

The correct course of action is one which creates the greatest benefit , or ‘utility ‘, to the majority of people. This is a branch of consequentialist theory

Question 10

Define personal ethics

Answer 10

A persons approach to ethics will be dictated in large by their personal outlook

Question 11

What is Egotists

Answer 11

Look to maximise their personal outcomes

Question 12

What is pluralists

Answer 12

Look for outcomes that benefit everyone

Question 13

What is absolutists

Answer 13

Look at the fundamental correctness of a course of activity, and thus tend to be guided by laws and regulations

Question 14

Consequentialists

Answer 14

Look at the possible consequences of a decision before deciding what to do

Question 15

What are the 4 personal ethics

Answer 15

Egotists
Pluralists
Absolutists
Consequentialists

Question 16

Why should accountants behave ethically

Answer 16

Ethical issues may be a matter of law and regulations, accountants are expected to apply them

To protect professions reputation and standing

As an accountant ethical behaviours serves the publics interest

Question 17

Who are is the codes and standards committee ( CSC) & what 3 councils do they consist of ?

Answer 17

They consist of three separate councils with specialisms in the following areas;

• audit and assurance council
• corporate reporting council
• actuarial council

Question 18

Who are the conduct committee ?

Answer 18

They have 3 separate committees
- corporate reporting review committee
- audit quality review committee
Case management committee - dealing with disciplinary cases

Question 19

Who are the international federation of accountants ( IFAC)

Answer 19

• They represent accountants worldwide
• they issue a code of ethics to promote high ethical standards
• Cima have released its own code of ethics that follow IFAC’s

Question 20

Who are the financial reporting council ( FRC )

Answer 20

• in the uk has the lead role in building confidence in the accountancy profession.
• it has two made relevant bodies codes and standards committee
  And the conduct committee

Question 21

Which two committees are relevant to the financial reporting council

(FRC )

Answer 21

• Code and standards committee
• conduct committee

Question 22

What are the seven principles of public life ?

Answer 22

Selflessness
Integrity
Objectivity
Accountability
Openness
Honesty
Leadership

Question 23

Who has to follow the 7 principles of public life ?

Answer 23

The government committee of standards in public life set out seven principles that those employed in the public sector must follow

Question 24

What are the two approaches for developing an ethical code ?

Answer 24

Rules ( compliance ) based

Framework ( ethics ) based

Question 25

What is the rule based approach ?

Answer 25

Under this approach every possible ethical situation is conceived and specific rules are made that should be followed. It allows consistent application of the rules but can result in long, complex rule books

Question 26

What is the framework approach ?

Answer 26

A framework of general principles are set out to guide members but there is no attempt to cover every possible situation. - it encourages proactive members and is best suited to complex and evolving situations - the framework makes it hard for members to find loop-holes in the rules but there is a scope for interpretation and therefore inconsistent application of the rules

Question 27

What are the characteristics of rule based approach

Answer 27

- the enforceability is mandatory - the choices are either obedience/ disobedience - the standards are explicit - the motivation is fear driven - the approach is law based - the objectives are detection - and the measures are rules -

Question 28

What are the characteristics of framework - based approaches ?

Answer 28

- the enforceability is discretionary - the choices are judgement - The standards are implicit - The motivation is value driven - the approach is principle based - the objectives are prevention - it is measured by principles ( values )