relevant interests, audit procedures Employer should have a policy on requiring all employees to give notice of their intention to exercise share options. There should also be internal and external audit checks to review the quality of financial information.Employer to have a formal policy for the acceptance and registering of gifts or inducements by customers and suppliers. If not designed to induce unethical behaviour – ok, otherwise decline and inform management / professional body etc. Self-interest threat Self-review threat Advocacy threats Familiarity threats Intimidation threats Having significant financial interestin the employing company, or a low-costloan from the employer Participating in an incentive schemewhere the amount of the payment depends on the accounting performance Inappropriate personal useof company assets Concern over job securityCommercial pressuresfrom outside the employer organisation (e.g. customersor suppliers) Deciding on the suitable accounting treatment for a business acquisition, having previously performed the feasibilityof the acquisition and recommended it Reporting on a matter where you have previously reported and made recommendations Promoting the legitimate objectives of theemployer organisation is notunethical provided that any statements made are not misleading or untruthful Long association with decision makersin the organisation Accepting gifts or hospitality from suppliers or customers Over-reliance on the word / work of a trusted subordinate Loss of pay or promotion Threat of dismissal over disagreementabout an accounting matter A dominant boss 19
Module 2: Ethics Part D: Ethical decision making Factors influencing decision-making p122 Individual factors:cognitive ability to judge the ethical rightness of a situation. Ethical courage is the ability tomake difficult decisions and act upon these decisions.Organisational factors:corporate culture (the patterns and rules that govern the behaviour of an organisation and its employees).Top tier management is considered to be the most influential factor in setting organisation values. The following decisions are most relevant (Schein 2004): 1.What leaders pay attention to, measure and control on a regular basis 2.How leaders react to critical incidents and organisational crises 3.How leaders allocate resources 4.Deliberate role model ing,teaching and coaching 5.How
leaders allocate rewards and status 6.How leaders recruit, select, promote and excommunicate. Creating an ethical culture in an organisation - Code of ethics - Formal and informal channels of communication for conflicts and grievances - Open and transparent communication between bosses and subordinates - Leaders are seen to be ethical - Suitable recruitment and rewards structure Professional factors: APESB Code of Ethics Societal factors: 1.