Question

1.i) What is meant by “business ethics”?

a) How do business ethics relate to a business?

b) What are some of the benefits of a business acting ethically?

c) Give an example of an ethical business and explain your point of view.

d) How do business ethics fit in with ASX Corporate Governance Principles & Recommendations?

e) What does business ethics have to do with external stakeholders?

f) What is a Code of Ethics/Code of Conduct?

g) What is the purpose of having such a code?

h) What should a Code of Ethics/Code of Conduct cover?

i) In what ways can a Code of Ethics/Code of Conduct be valuable to an organisation?

j) What principles do high-quality ethical companies share?

k) What has the personal integrity of members of boards of directors and company management got to do with business ethics?

ii) What is the meaning of “responsible business practices”?

a) Why is adopting responsible business practices considered a challenge?

b) Why are responsible business practices important to organisations?

c) Explain the three areas important for long term sustainability.

d) What do responsible business practices mean from a business perspective?

e) What is meant by “corporate social responsibility”?

f) What are the strategic advantages and disadvantages of corporate social responsibility?

g) Why should organisations adopt CSR practices? Explain.

iii) What are the ethical requirements for professional accountants?

a) What is the difference between ethical requirements for business and professional accountants?

b) What differentiates accounting as a profession?

c) What is meant by the professional accounting having a responsibility to act in the public interest?

d) Name two codes of ethics for professional accountants. How are they different?

e) What does a professional code of ethics provide for professional accountants?

f) What are the fundamental principles of professional accountants’ code of ethics? Explain each.

g) Are the fundamental principles of professional accountants’ codes of ethics optional?

h) Explain threats to compliance with the fundamental principles of Professional Accountants’ Code of Ethics.

iiii) Explain safeguards that might eliminate threats to compliance with the fundamental principles of Professional Accountants’ Code of Ethics.

a) What is the objective of the conceptual framework approach to dealing with threats to compliance with professional accountants’ code of ethics? Explain, give examples.

b) Explain the approach a professional accountant should use to resolve ethical conflict.

Answer 1

1.i) What is meant by “business ethics”?

Business ethics refers to the moral principals governing the way business is run by the various individuals that make up the entity. These are codes of value that influence their actions and decisions.

a) How do business ethics relate to a business?

Business ethics examine the ethical conflicts that arise in a professional or business environment, and relates to several aspects of ethical conduct.

b) What are some of the benefits of a business acting ethically?

Ethical businesses have long standing goodwill and are valued by both consumers as well as the shareholders and other stakeholders. In the modern era, it is customary, and often, mandatory, for a business to meet their ethical obligations. Ethical behavior, in addition, will provide a competitive edge to the business over unscrupulous competitors. An ethical management leads to an ethical working environment, and this helps avoid frauds, scams and lawsuits.

c) Give an example of an ethical business and explain your point of view.

I don't understand if I should give a specific business as an example. I think you would be better off giving a local example, so I have not provided an answer.

d) How do business ethics fit in with ASX Corporate Governance Principles & Recommendations?

Principle 3 of the ASX Corporate governance principles states: Act Ethically and responsibly. This refers to incorporating business ethics in the business of the entity by formulating and enforcing a good code of conduct, and letting the managers lead by example.

e) What does business ethics have to do with external stakeholders?

External stakeholders includes government, general public, suppliers and customers. The business should make it a point to deal fairly with suppliers and customers. They should act responsibly when it comes to the environment, and they should deal with others who display similar ethical practices.

f) What is a Code of Ethics/Code of Conduct?

A code of Conduct is a statement of core values, and it expresses the commitment that the business gives to act ethically and responsibly in addition to fulfilling the legal obligations.

g) What is the purpose of having such a code?

Good corporate governance can be implemented only if the management follows ethical practices, and it is enforced throughout the organization. This code of conduct also enhances the confidence placed by investors in the entity.

h) What should a Code of Ethics/Code of Conduct cover?

Describe the ethical responsibilities of the employees and directors, the processes for preventing the offer or accepting of any bribes, and any other unethical trade practices.There should also be a process for handling conflicts of interests that may arise, and the measures to report any unethical behaviour.

i) In what ways can a Code of Ethics/Code of Conduct be valuable to an organisation?

j) What principles do high-quality ethical companies share?

k) What has the personal integrity of members of boards of directors and company management got to do with business ethics?

Only if the management and board behave ethically will the lower level managers and employees follow in their footsteps.

ii) What is the meaning of “responsible business practices”?

a) Why is adopting responsible business practices considered a challenge?

b) Why are responsible business practices important to organisations?

c) Explain the three areas important for long term sustainability.

d) What do responsible business practices mean from a business perspective?

e) What is meant by “corporate social responsibility”?

f) What are the strategic advantages and disadvantages of corporate social responsibility?

g) Why should organisations adopt CSR practices? Explain.

iii) What are the ethical requirements for professional accountants?

a) What is the difference between ethical requirements for business and professional accountants?

b) What differentiates accounting as a profession?

c) What is meant by the professional accounting having a responsibility to act in the public interest?

d) Name two codes of ethics for professional accountants. How are they different?

e) What does a professional code of ethics provide for professional accountants?

f) What are the fundamental principles of professional accountants’ code of ethics? Explain each.

g) Are the fundamental principles of professional accountants’ codes of ethics optional?

h) Explain threats to compliance with the fundamental principles of Professional Accountants’ Code of Ethics.

iiii) Explain safeguards that might eliminate threats to compliance with the fundamental principles of Professional Accountants’ Code of Ethics.

a) What is the objective of the conceptual framework approach to dealing with threats to compliance with professional accountants’ code of ethics? Explain, give examples.

b) Explain the approach a professional accountant should use to resolve ethical conflict.