NAME

KUDAKWASHE
MUJUNGWA
REG NUMBER
R1611416
COURSE
Professional
Ethics, Values and
Attitudes (AC 423)
LECTURER
DR
CHAVHUNDUKA
PROGRAM HACCPP

QUESTIONS
1. Make a detailed discussion of six pillars of a
successful corporate governance. Make reference to
life experience where necessary. (10)
2. Unethical behaviour can lead to serious results to
both individual and the organisation on work for.
Motivate this statement with practical examples. (10)
3. Compliance with fundamental principles of integrity,
objectivity, commitment and professional competence
and due care and confidentiality enhance the
accounting profession. Make a detailed evaluation of
this statement. (10)
1. Make a detailed discussion of six pillars of a successful corporate
governance. Make reference to life experience where necessary. (10)
In the corporate world where corporate governance had been a matter of concern the six
pillars which include transparency, accountability, fairness and Equity, independence
assurance, leadership and stakeholder management had rendered many firms successful in
their corporate governance.
Transparency ensures that information revealed by an organisation is clearly presented. This
pillar ensures accessibility of information in dealings and operations. Transparency talks to
accuracy and completeness of disclosed information which has the effect of building good
image both to stakeholders and the market place. Mallin (2012), states that in business
organisation, any shareholder should have full information about any new agenda by
attending general meetings. Also, upon their request, shareholders should be provided with
full information about the functioning of their organisation Mallin (2012). Balachandran and
Chandrasekaran (2000) states that this is the central pillar of corporate governance since it
ensures accurate and timely disclosure of corporate information on material matters.
Accountability ensures that all individuals or groups are responsible for their actions in the
organisation Deswarte (2004). This leads to business maintaining accurate financial
statements since the financial managers for example are responsible for accurate presentation
of financial statements. According to Bleischwitz (2007), the idea of accountability leads to
constitutional frameworks that allows for proper interaction among different stakeholders.
Corporate responsibility is a process that induces organisational personnel to be responsible
of their action and the consequences. This therefore fosters compliance and upholding of
internal and external controls.
Fairness and equity involves the organisational function that should be fully balanced so as to
provide an equal recognition to all stakeholders especially shareholders. The pillar ensures
that business activities are conducted without detriment to shareholders’ interest. The pillar
obligates management to be unbiased and to respect the interest of all people in the
organisation. Management should give due consideration to all stakeholders in the
organisation (Idowu and Filho, 2009). The application of fairness in the business dealings
aligns business best practises in favour of stakeholders (Lipman and Lipman, 2006). This
principle also guides management to treat minorities equitably with any problem readdressed
fairly .Fairness also covers the issues of effectiveness, efficiency, economy and equity
(4Es).The principles if complied to eliminates management criticism and hence smooth
implementation of organisational plans and objects.
Leadership involves directing, defining and offering leadership on organisational agenda
within the values and principles that frame the way business should be done. It involves the
ability to choose freely without being influenced by external forces (Mostovicz and Kakabse,
2009). The leadership values extend from more tangible tactics and actions (Amir and Ariely,
2007) to strategic and practical decisions (Kouzes and Posner, 2003).Good leadership ensures
the going concern concept of an organisation. An organisation that runs without clear
direction or plan is planning to fail and will never realise any long term goal in its operations.
The Harare City council case clearly show how poor leaders may affect corporate governance
stance of an organisation.
Transparency is achieved through the assurance of a non-direct actor which gives confidence
in the work that will have been done by the executive actors of the organisation. Independent
assurance is the work of a third part where by the process involves verification of work done.
Assurance services provide independent assurance and professional opinion that reduce the
information risks. This involves the examples of auditing services provided by companies
like PWC, Delloite and Touche and Ernest and Young to Zimbabwean organisations and
firms.
Since the directors are responsible for the day to day running of the business, it is important
for non-actors to obtain independent assurance to obtain confidence that the actors are
leading the organisation towards organisational goals and not using the funds for their
benefit. Independent assurance is provided by a third party(external auditor) who provides an
opinion on whether the financial statements were prepared in accordance with the set
standards as well as to test if the test results are accurate and provides a fair and equitable
basis. Absence of independent review of financial statements may increase the information
risky and compromise good corporate governance. Independent assurance increases the
confidence of the public in the financial statements of an organisation. Investment is based on
confidence.

However, independent assurance is obtained at a cost. The firm has to pay for the audit fees
as price for the audit services they receive from the external auditors.

Those charged with governance should identify the key stakeholders of their organisation and
manage how they interact with them in business. This hinges to the stakeholder management
pillar. This involves for example in the insurance industry where an insurance company like
NicozDiamond knows how to manage their reinsurers like WICA reinsurers in the case of
NicozDiamond. This ensures best outcome for the organisation as a whole with its goal met
and strategies followed. Stakeholder engagement should be one of the scribed item in the
organisational plan and strategy. ZIMRA also is a major stakeholders who will be concerned
in knowing business generated profits in order to determine the tax charge.
However shareholders interest may conflict where the offering of one interest negatively
affects other stakeholder interest.Therefore in such case those charged with governance
should wise choose an option to forgo.

2. Unethical behaviour can lead to serious results to both individual and the
organisation on work for. Motivate this statement with practical examples.
(10)
Impact on employee performance
In an organisation with unethical practices there is likely to be negative employee
performance. This will involve a situation where an employee works and strive only to get
maximum returns or money from the organisation while ignoring laid down procedures and
protocols. This may lead to carelessness and work errors which may lead to incorrect
accounting information in case of an Accountant. NSSA case speaks to this in its purchase of
shares in Star Africa which lead to a loss of US$14 million the loss was a result of staff and
NSSA members forsaking known protocol which is a revelation of poor performance in the
professional world.
Employee Relations and welfare affected
Unethical leadership implemented may raise the spirit of criticism of both management and
fellow employees. This will be as a result of one unethical action being question by fellow
employees and need to follow that same path and being unprepared to receive proportionate
punishment. It is difficult for a company to be a successful going concern without respected
leaders, these tend to reveal itself in form of tension between employees over standards to be
followed. This behaviour consistently practised lead to lack of trust among organisational
member which create a tough workplace and a detrimental reputation. Also unethical acts
may affect fellow employees for example the case of ZBC in 2014 where employees had
gone for 6 months without pay due to CEO Happison Muchechetere and team’s fraudulent
acts.
Loss of customers
Lack of ethical standard and continual practise of unethical behaviour lead to loss of
customers. This come as a result of customer lacking faith in the organisation. The example
will be of an exporter retailer practise unethical action will lose more of its ethical customers
who will move to other ethical suppliers of the same product or service. Also a company may
lose its supplier where a supplier will be in fear of being trapped into the red tape hence quits
supplying such customer. This was the case with PSMAS when it act unethical and loosed
UZ to FML in 2013
Significant fines and penalties
Many businesses have in many instance due to failure to cope and comply with the countries
rules and regulations often face serious fines and penalties. Companies have their tenders
cancelled as a result of lacking proper ethical behaviours. Also in case of Zimbabwe many
companies have faced ZIMRA penalties as a result of their accountants failing to submit
quarterly tax payments and reports. Also executives of many firms have faced legal charge on
account of their subordinates partaking in unethical acts. This results in an organisation being
forced to pump out funds as happened in the Gupta case, KPMG was forced to reimburse the
audit fees that has been received in during the engagement.
Criminal charges and imprisonment:
Unethical conduct may lead to imprisonment. Unethical conduct may cause severe
implications on other part to the extent that the courts will rule it to be an illegal act. This was
a case in the Enron scandal, CEO Jeff Skilling was imprisoned for an effective jail term of
nine years.

Loss of Jobs
Violation of set-out ethical standards may result in loss of standards. This maybe loss to the
one who commits the crime or the supervisor included. Many qualified accountants who had
chosen to act unethically have lost their jobs in the process. The case of Rumbidzai Musiyiwa
a Metbank Internal audit manager who was fired for disclosing confidential information
speaks to the result of unethical behaviour (The Weekend Post, 2012; Herald 25-03-2012).
Also in the ZBC 2014 scandal the CEO and team were fired as a result of unethical behaviour
unveiled.
Company reputation degradation
A company through media communication and other means is made a public figure ethical
standards are suppressed. This results in any unethical act being associated with that company
hence degraded reputation to all prospect stakeholders. The negatives came in form of lack of
investors and suppliers which no new customer and loss of company’s customers. Once
impaired the image of an organisation take a lot time and money to restore as well as
consumer confidentiality. BDO chartered accountants employed forensic audit into NSSA
activities. It surfaced to the public that NSSA has been involved in a wide range of corruption
scandals which demonstrated lack of ethics in the way in which the organisation was been
handled. The organisation lost its good reputation in the process. To gain credibility back a
corporation needs to create a well-planned rebranding and marketing campaign, along with
hiring a public relations team to help improve its reputation. This can lead to millions of
dollars in costs. This was noticed in case of Parmalat, an Italian firm.

Loss of Life

In some extreme and unprecedented cases, unethical behavior may claim life of individuals.
After a successful and rigorous investigation, one of the top brass in the Enron scandal, Ken
Lay committed suicide. This serves as a stern warning that unethical behavior has far
reaching implications

3. Compliance with fundamental principles of integrity, objectivity,

commitment and professional competence and due care and confidentiality
enhance the accounting profession. Make a detailed evaluation of this
statement. (10)
Accounting profession one of the most recognised in the present age. The profession has
ethical values and principles which enhance the profession and renders its recognition. These
include integrity, objectivity, commitment, professional competence and due care and
confidentiality.
Integrity: means being straightforward and honest in all professional and business
relationship. According to Section 110 of the IFAC Code of Ethics the principle of integrity
imposes an obligation on all professional accountants to be straightforward and honest in
professional and business relationships. Integrity also implies fair dealing and truthfulness.
This is a principle of uprightness, this principle if adhered to will result in the accountants
and auditors presenting financial information in such a way that honest presentation of what
transpired and the value of the business. Also for auditors this principle enhances their
recognition by shareholders where they produce a straight forward audit report with all
matters clearly stated.
The case Gershem Pasi, CEO Certified Tax Accountant who inflated contract prices and
undervalued imported cars value had the principle interfered with by an accountant. The
breach of the principle resulted in legal matters being raised against him which would have
been escaped if the principle’s call was heeded. The breach should have been avoided only if
the Accountant was content and tried to live with in his means.

Objectivity: Avoidance of bias, conflict of interest and undue influence of others to override
professional or business judgements results in fair presentation of financial statement and
audit opinion. According to Section 120 of the IFAC Code of Ethics, accountants should no
allow judgments or the bias of others to influence their judgements. According to the
principle any conflict of interest should be disclosed and desist from operating under such a
condition. This principles results in according information being purely of the auditor or
accountant’s own knowledge applied judgement.
The principle may be compromised if self-interest treat emerge in the operation of any
professional hence the need of an accountant to disclose any self-interest threat before
accepting a job offer or passing an opinion.
Professional Competence and Due Care: In a world so dynamic a professional should
upgrade skills, knowledge and tactics to cope up with changes ensure that the work offered
will be up to standard. This is one of the accounting principles which ensures that the
profession ensures that up to date standards and developments are incorporated which results
in high quality work and credibility along the whole globe. According to IFAC Code of
Ethics Section 130, a professional accountant should act diligently and in accordance with
applicable technical and professional standards when providing professional services. It is
also the duty of the accountant to keep his/her knowledge level in regards to changes in the
industry at a high level so as to provide competent services to the employer . This principles
ensures that the same accounting techniques are incorporated around the globe which makes
financial statements of similar nature, structure and standards. This is the compliance with
professional competence and due care principle. This requires highest level of commitment.
This enhances the credibility of the accounting profession thereby giving a lifeline to the
profession.

Confidentiality principle: involves the respect of the confidentiality of information acquired

as a result of professional and business relationship. The principle ensures that the company’s
privacy is ensured through the accountant or auditor keeping undisclosed confidential
information. Hence accounting as a profession is rendered as one that help the company to
keep its secret, private and confidential information. This make the profession of the essential
ones in any company or entity. Also the principle allows for disclosure of information after
proper and specific authority and for legal requirements. The requirements of the principle
esteems the accounting profession higher than any other general profession since consultation
of any professional member will result in gaining authorised information.
Professional Behaviour: The principle of professional behaviour imposes an obligation on
all professional accountants to comply with relevant laws and regulations and avoid any
action that the professional accountant knows or should know may discredit the profession.
This includes actions that a reasonable and informed third party, weighing all the specific
facts and circumstances available to the professional accountant at that time, would be likely
to conclude adversely affects the good reputation of the profession. This fundamental
principle goes a long way in protecting the credibility of the accounting profession. The
principle further prescribes the way in which accountants must conduct themselves even in
their social life. The principle outlines the behaviour that befits the profession. This enables
the accountants to avoid any behaviour that discredits the profession thereby maintaining the
dignity of the profession. Given that the profession continual relevance largely depends on
public perceptions, accountants have a mandate to send right signals otherwise risky being
irrelevant. Compliance with the fundamental principle of professional behaviour promotes
highest level of professional conduct amongst accountants thereby enhancing the profession.

References
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beneficial delays’’, Journal of Marketing Research (JMR), Vol. 44 No. 1, pp. 142-52.
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PHI Learning Pvt. Ltd.
Bleischwitz, R., (2007), Corporate Governance of Sustainability: A Co-evolutionary View on
Resource Management. Edward Elgar Publishing.
Deswarte, Y., Cuppens, F., Jajodia, S. and Wang, L., (2004), Information Security
Management, Education and Privacy, Springer.
Idowu, S.O. and Filho, W.L., (2009), Professionals´ Perspectives of Corporate Social
Responsibility, Springer.
IFAC.2018, ‘The International Ethics Standards Board for Accountants’, International Code
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Kouzes, J. and Posner, B. (2003), The Leadership Challenge, 3rd ed., Wiley, San Francisco,
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