Conflict of Interest_Week 6

Conflict of Interest_Week 6 - Business & Professional...

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Business & Professional Ethics Chapter 4 Conflict of Interest / Lack of Independence
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Agenda Ethical Decision Making Nuggets from last class Conflicts of Interest What’s the problem? Conflicts in Business Basic Issues – Boeing’s CEO, Lord Conrad Black Management Conflicts in Professional Accounting Basic Issues – 3 Cases International Harmonization (IFAC) Framework
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Advice for Sam and Ruby Ethical problems identified. . . . . What should Sam do? How should Sam advise Ruby? What guidance principles would be helpful?
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Nuggets from Last Class Ethical Decision Making All 4 tests must be done Pitfalls to be avoided Most important ST/LT All stakeholders, not just the ones you want Defensible decisions are needed
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Learning Objectives Understand conflicts of interest: Problems – ability to identify Causes Management/avoidance techniques Expectations
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Judgement Based on Common and Conflicting Interests Investors’ Interests Executives’ Interests Judgements Congruent Self-interested Practical application of Economic Theory of Principal and Agent
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Conflicts of Interest/Independence For management and employees: Where the independent judgment of an employee is swayed, or might be swayed from making decisions in the organization’s best interest. Important Issues: Usual Causes : self-interest, misunderstanding Slippery slope Inevitable. ..So how to manage to avoid harm Appearance is vital Guidance needed
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Types of Conflict of Interest (COI) Potential COI Actual COI Decision Point INDEPENDENCE OF APPEARANCE Non-existent Apparent Imaginary COI INDEPENDENCE OF MIND
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Conflicts - Incentive/Reward Systems Stock broker – commission or flat rate Executives – stock options Auto Repair Dealers What would you recommend for: Doctors Mechanics Professional Accountants
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Prof. Len Brooks, Rotman School of Management, University of Toronto, 2008 Lord Conrad Black – Fiduciary? 1.
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This note was uploaded on 12/21/2010 for the course ACCT 450 taught by Professor Dannylo during the Fall '10 term at Hong Kong Shue Yan.

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Conflict of Interest_Week 6 - Business & Professional...

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