Ethics – Knowsia

SCS – L3 – Q39 – Ethics and social responsibility

Identify ethical principles breached in a scenario involving a takeover and confidentiality request.

Question

(a) You have been recently employed as a Finance Manager of a large manufacturing company. At its first management meeting, the Director of Finance presented information on management’s intention to takeover one of the company’s key suppliers. An old school friend of yours works as an accountant for the targeted company. The Finance Director knows and has asked you to try and find out anything that might help the takeover, but it must remain confidential.

Required:
Identify and explain THREE fundamental ethical principles that could be breached in the above scenario. (b) Corporate social responsibility (CSR) requires that organizations give back to the society by way of investing part of their profits in socio-economic activities of their host communities. Companies adopt different strategies to realizing their CSR obligations to the host communities.

Required:
Identify and explain FOUR strategies for managing Corporate Social Responsibility in organizations.

Answer

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Tags: Conflict of Interest, Corporate Social Responsibility, Ethics, Manufacturing, Professional conduct
Level: Level 3

Topic: Ethics and social responsibility

SCS – L3 – Q30 – Ethical theories

Advise Apea Chemist Ltd on two approaches to managing ethics in organizations.

Question

Apea Chemist Ltd is a company engaged in the manufacturing of various drugs for the local market. There have been series of ethical infractions within the company. Some top managements have been accused of insider trading, bribing of some key staff of the regulatory authorities and attempts to cover up alleged distribution of expired drugs. There is total breakdown of ethical standards within the company. The board of directors have expressed grave concerns about the current happenings in the company. At its last quarterly meeting, the board resolved to engage the services of a corporate governance expert to help address the situation. The board understands that there are two major approaches to managing ethics in an organization.

Required:
As a corporate governance expert, you have been engaged by the board to advise it on TWO approaches to the management of ethics in organizations. (bi)

The International Federation of Accountants (IFAC) Code of Ethics discusses the need for professional accountants to be aware of and avoid conflict of interest situation as well as maintain independence in carrying out their professional duties. The professional accountant is exposed to several threats to independence, which are likely to lead to conflict of interest. A threat may arise where an assurance firm provides services other than assurance services to an assurance client.

Required:
(i) Identify the specific threat a professional accountant or assurance firm faces by providing the following services:

Preparing accounting records and financial statements.
Valuation services.
(ii) Suggest TWO measures each a professional accountant can take to minimize the threats identified in (i).

Answer

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Tags: Conflict Resolution, Ethics, Independence, Professional Accountant, Safeguards
Level: Level 3

Topic: Conflicts of interest and ethical conflict resolution

FR – L2 – Q9 – Professional and Ethical Issues in Financial Reporting

Identify ethical issues in two cases involving financial reporting decisions by ICAG accountants

Question

TWO CASES

Case 1
Kofi Mensah has been on a two-year study sabbatical in Canada and this is his first job on returning to work. Kofi Mensah qualified as an ICAG chartered accountant just before his sabbatical. He worked in a medium-sized practice with wide experience of clients in the mining, manufacturing, and agricultural sectors.
Volta Assurance Limited is a subsidiary of a listed group involved in financial services. The financial controller of Volta Assurance Limited has been on long-term sick leave. Kofi Mensah has been offered an appointment as temporary financial controller three months before the 31 December 20X9 year-end.
Kofi Mensah would be responsible for preparing the financial statements for the year ended 31 December 20X9. Key areas of the financial statements include lessor accounting, financial instruments, and insurance contracts.
During his interview for the post, the group finance director told Kofi Mensah that the group is looking for a strong financial position and performance from the subsidiary and that if Kofi Mensah helps deliver it, he is sure to obtain a permanent post in the group.

Case 2
Kwame Osei is an ICAG Chartered Accountant and works as a financial accountant working for Kumasi Builders plc.
Kumasi Builders plc is about to finalise its financial statements for the year ended 31 December 20X9 and will release its results in two days’ time.
One of Kwame Osei’s tasks during the frantic year-end work was to perform an impairment review on certain assets owned by the company. There were indications of impairment, but Kwame Osei’s calculation of recoverable amount showed that no assets were impaired.
Kwame Osei has just read an article on spreadsheet error. This led him to review the spreadsheets that he built to perform the recoverable amount calculations, and he has found an error in the logic. This error, if corrected, would have led to the company recognising a material impairment loss.
The loss, if recognised, would lead to the profit figure falling below the level at which Kwame Osei’s bonus is triggered. He is also concerned that his mistake will compromise his future promotion prospects.

Required
Identify and explain the ethical issues arising in the above cases.

Answer

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Tags: Ethics, Financial Reporting, Financial Statements, ICAG, Integrity, Intimidation Threat, Objectivity, Professional Competence, Professional conduct, Self-Interest Threat
Level: Level 2

Topic: Professional and Ethical Issues in Financial Reporting

SCS – L3 – Q24 – Ethics and social responsibility

Discuss limits of CSR, safeguards for litigation threats to accountants, and strategic importance of HRM in employee development.

Question

(a) Corporate Social Responsibility represents a company’s voluntary commitment to address the ethical, social and environmental factors associated with its operations. Despite its potential for furthering social needs, there are cogent arguments against Corporate Social Responsibility and may come under severe pressure in terms of its financing.

Required:

Discuss FOUR limits of Corporate Social Responsibility.

(b) Professional accountants face many threats in the performance of their duties that may negatively affect accountants’ objectivity and independence. One of such threats is intimidation threat which may arise from close business relationships, family and personal relationships, and assurance staff members moving to employment with client as well as actual and threatened litigation.

Required:

Explain FOUR safeguards you will consider to deal with actual and threatened litigation as a professional accountant.

(c) Human Resource Management play an essential role in employee development activities. Employee development activities refer to initiatives taken by organization and employees to enhance their skills with time and keep themselves acquainted with the latest developments.

Required:

Explain TWO strategic importance of Human Resource Management and employee development.

Answer

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Tags: Corporate Social Responsibility, Employee development, Ethics, HRM, Litigation safeguards, Professional accountants
Level: Level 3

Topic: Ethics and social responsibility

SCS – L3 – Q23 – Conflicts of interest and ethical conflict resolution

Discuss three justifications for separating the roles of board chairman and CEO at Kabwe Pharmaceuticals Ltd.

Question

Susan Kabwe completed a first degree in pharmacy programme abroad and returned to her native country Gambia with the hope of starting a pharmaceutical company. Gambia has been experiencing high graduate unemployment and Susan was very determined not to join the teaming unemployed youth in the country. Susan put together an excellent business plan and approached four other childhood friends who have also completed university to start Kabwe Pharmaceuticals Ltd for manufacturing of basic and essential drugs locally. After many months of hard work, the company finally commenced operations two years ago.

Susan Kabwe plays a dual role of the chief executive officer (CEO) and chairman of the Board of Directors, and the four other friends are all executive directors of the company. The board of the company is currently composed of five executive directors and two non-executive directors. The two non-executive directors are close friends of the executive directors without relevant work experience since they remained unemployed 3 years after completing university. There have been several board meetings held without the non-executive directors. This situation is largely due to a belief by the executive directors that non-executive directors are really not needed since they do not play any important role on the board. Susan and other executive directors participated in a seminar on corporate governance where the facilitator made the following statements on best practices of corporate governance:

“The roles of board chairman and chief executive officer should be held by two different individuals”

“The board chairman performs critical functions to ensure that the board functions effectively”

“The board should be composed of at least one-third of non-executive directors”

After the seminar the executive directors disagreed with some of the facilitator’s assertions. They claimed the statements are idealistic and not pragmatic. Susan Kabwe has approached you as a corporate governance expert to help provide clarity to the statements by the facilitator.

Required:

Discuss THREE justifications why the roles of the board chairman and chief executive officer should not be held by Susan Kabwe.

Answer

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Tags: Board roles, Chairman responsibilities, Corporate Governance, Ethics, Non-executive directors
Level: Level 3

Topic: Professional practice and codes of ethics

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

Question

At its recent Annual General Meeting, management of NTM was highly criticized for two major scandals that occurred in the organization during the year. In one case, newspapers reported that the management of the company connived with officials at the port to undervalue imports in order to pay lower taxes. In the other case, it was reported that the accountant leaked information to his friend who was bidding for a contract in the company. The Board Chairman, who is also the Chief Executive Officer of the company apologized for these incidents but did not disclose that the company had been sued in respect of the first case. He went on to promise the shareholders that the fortunes of the company would change dramatically by the end of the new year as the company was going to start exporting its products to Europe within the next few weeks.

Required:
(a) Identify and explain THREE situations that are in conflict with the International Federation of Accountants (IFAC)’s Code of Ethics.

(b) Explain FOUR disadvantages of the CEO acting also as the Chairman of the Board.

Answer

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Tags: Confidentiality, Conflicts of Interest, Corporate Governance, Disclosure, Ethics, IFAC Code, Integrity, Stakeholder Management
Level: Level 3

Topic: Professional practice and codes of ethics

SCS – L3 – Q12- Ethics and social responsibility

Make a case for CSR to help Petrostar Ltd. formulate an appropriate CSR strategy.

Question

You have recently been appointed head of corporate affairs of PetroStar Ltd., a reputable company that operates in the upstream sector of the petroleum industry in West Africa. In a recent management meeting, a disagreement arose among executives regarding the nature of the company’s philosophy and strategy towards social responsibility. In order to resolve the disagreement, you have been asked by the company’s board of directors to submit a position paper that will enable it to formulate an appropriate corporate social responsibility strategy for the company.

Required:
(a) In a brief report to the board, make a clear case for Corporate Social Responsibility (CSR) to help your company’s board formulate an appropriate CSR strategy.

(b) Explain TWO strategies your company could adopt for managing its social responsibility.

You recently qualified as a professional accountant and received promotion in your company. One of your key responsibilities is to prepare management accounts to facilitate management decision making. You require important sales information from the sales department to incorporate into the final figures. Unfortunately, due to staff sickness and other inefficiencies, the sales report for the month has been delayed. Thus, you will not receive the information until few hours before the accounts are due for presentation to the Chief Finance Officer.

In a related situation, while on lunch break, you overheard the marketing manager asking another employee in the finance department to advise her on some investment decisions she has to make. She has recently inherited a considerable sum of money and would like your colleague to calculate her inheritance tax as well as capital gains tax liabilities.

Required:
(c) Identify the fundamental ethical principle(s) that could be in breach and justify why they may constitute a breach.

Answer

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Tags: Corporate Social Responsibility, CSR, Ethics, Stakeholder Expectations, Sustainability
Level: Level 3

Topic: Ethics and social responsibility

SCS – L3 – Q6- Professional practice and codes of ethics

Outline five personal or professional qualities expected of an accountant in strategic management.

Question

(a) The personal qualities as well as the professional qualities of an accountant can influence his/her role in the strategic management process. Outline FIVE (5) personal or professional qualities expected of an accountant.

(b) Ghana’s corporate governance environment has been influenced by the principles of governance published by the Organisation for Economic Cooperation and Development (OECD). These principles deal mainly with performance problems that result from the separation of ownership and management of a company. Explain FIVE (5) principles of corporate governance.

Answer

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Tags: Accountant roles, Ethics, Personal qualities, Professional qualities, Strategic management
Level: Level 3

Topic: Professional practice and codes of ethics

SCS – L3 – Q2- Ethics and social responsibility

Explain four ethical problems managers face in dealing with stakeholders.

Question

2 Ethics and the environment

(a) Managers have a duty to aim for profit. At the same time, modern ethical standards impose a duty to guard, preserve and enhance the value of an enterprise for the good of all touched by it, including the general public.

Explain FOUR (4) ethical problems managers face in dealing with stakeholders.

(b) Business activities, in general, were formerly regarded as a problem for the environmental movement, but the two are now increasingly complementary. There has been an increase in the use of a green approach to market products.

Explain in FOUR (4) ways how physical environmental conditions are important for strategic planning.

Answer

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Tags: Bribery, Corporate Responsibility, Discrimination, Environmental Issues, Ethics, extortion, managers, profit, Stakeholders
Level: Level 3

Topic: Ethics and social responsibility

PSAF – L2 – Q5.3 – Public Expenditure and Financial Accountability

Discuss how professional skepticism and judgement assist in evaluating a hospital's operations for resource misuse and poor procurement.

Question

You have been appointed as an independent assessor to evaluate the operations of a major regional hospital, which has recently been in the news for significant misuse of resources and poor procurement practices.

Required:
Discuss how professional skepticism and judgement assist in the assignment in the hospital.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit, Ethics, Financial management, Procurement, Professional Judgement, Professional Scepticism, Public Sector Accounting
Level: Level 2

Topic: Public expenditure and financial accountability framework

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SCS – L3 – Q39 – Ethics and social responsibility

Identify ethical principles breached in a scenario involving a takeover and confidentiality request.

SCS – L3 – Q30 – Ethical theories

Advise Apea Chemist Ltd on two approaches to managing ethics in organizations.

FR – L2 – Q9 – Professional and Ethical Issues in Financial Reporting

Identify ethical issues in two cases involving financial reporting decisions by ICAG accountants

SCS – L3 – Q24 – Ethics and social responsibility

Discuss limits of CSR, safeguards for litigation threats to accountants, and strategic importance of HRM in employee development.

SCS – L3 – Q23 – Conflicts of interest and ethical conflict resolution

Discuss three justifications for separating the roles of board chairman and CEO at Kabwe Pharmaceuticals Ltd.

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

SCS – L3 – Q12- Ethics and social responsibility

Make a case for CSR to help Petrostar Ltd. formulate an appropriate CSR strategy.

SCS – L3 – Q6- Professional practice and codes of ethics

Outline five personal or professional qualities expected of an accountant in strategic management.

SCS – L3 – Q2- Ethics and social responsibility

Explain four ethical problems managers face in dealing with stakeholders.

PSAF – L2 – Q5.3 – Public Expenditure and Financial Accountability

Discuss how professional skepticism and judgement assist in evaluating a hospital's operations for resource misuse and poor procurement.

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SCS – L3 – Q39 – Ethics and social responsibility

Identify ethical principles breached in a scenario involving a takeover and confidentiality request.

You're reporting an error for "SCS – L3 – Q39 – Ethics and social responsibility"

SCS – L3 – Q30 – Ethical theories

Advise Apea Chemist Ltd on two approaches to managing ethics in organizations.

You're reporting an error for "SCS – L3 – Q30 – Ethical theories"

FR – L2 – Q9 – Professional and Ethical Issues in Financial Reporting

Identify ethical issues in two cases involving financial reporting decisions by ICAG accountants

You're reporting an error for "FR – L2 – Q9 – Professional and Ethical Issues in Financial Reporting"

SCS – L3 – Q24 – Ethics and social responsibility

Discuss limits of CSR, safeguards for litigation threats to accountants, and strategic importance of HRM in employee development.

You're reporting an error for "SCS – L3 – Q24 – Ethics and social responsibility"

SCS – L3 – Q23 – Conflicts of interest and ethical conflict resolution

Discuss three justifications for separating the roles of board chairman and CEO at Kabwe Pharmaceuticals Ltd.

You're reporting an error for "SCS – L3 – Q23 – Conflicts of interest and ethical conflict resolution"

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

You're reporting an error for "SCS – L3 – Q17 – Professional practice and codes of ethics"

SCS – L3 – Q12- Ethics and social responsibility

Make a case for CSR to help Petrostar Ltd. formulate an appropriate CSR strategy.

You're reporting an error for "SCS – L3 – Q12- Ethics and social responsibility"

SCS – L3 – Q6- Professional practice and codes of ethics

Outline five personal or professional qualities expected of an accountant in strategic management.

You're reporting an error for "SCS – L3 – Q6- Professional practice and codes of ethics"

SCS – L3 – Q2- Ethics and social responsibility

Explain four ethical problems managers face in dealing with stakeholders.

You're reporting an error for "SCS – L3 – Q2- Ethics and social responsibility"

PSAF – L2 – Q5.3 – Public Expenditure and Financial Accountability

Discuss how professional skepticism and judgement assist in evaluating a hospital's operations for resource misuse and poor procurement.

You're reporting an error for "PSAF – L2 – Q5.3 – Public Expenditure and Financial Accountability"

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