Unit 15: Organization Ethics Flashcards
What is the purpose of anti-bribery laws?
The purpose of anti-bribery laws is to
Prevent illegal practices,
Create a level playing field in international trade, and
Increase the quality of internal controls.
What are the two main anti-bribery regimes known worldwide?
Two of the main anti-bribery regimes worldwide are the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act (UKBA).
Describe the treatment of facilitation payments under the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act (UKBA).
The FCPA contains a provision that allows facilitation payments. Congress was convinced that not allowing these payments would put U.S. businesses at an international disadvantage.
The UKBA does not permit facilitation payments. Under the UKBA, even the smallest facilitation payments are prohibited, even if accounted for in the books.
What is a facilitation payment?
A facilitation payment is a payment made to a government official by a foreign company that allows the foreign company to compete.
What are the four offenses recognized by the U.K. Bribery Act (UKBA)?
Offering, promising, or giving an advantage
Requesting, agreeing to receive, or accepting an advantage
Bribery of a foreign public official
Failure by a commercial organization to prevent a bribe being paid to gain or retain business or a business advantage
What is the most significant provision of SOX regarding ethics?
The most significant provision of SOX regarding ethics is Section 406(a), which requires any company issuing securities “to disclose whether or not, and if not, the reason therefore, such issuer has adopted a code of ethics for senior financial officers, applicable to its principal financial officer and comptroller or principal accounting officer, or persons performing similar functions.”
What are the accounting and internal control requirements of the U.S. Foreign Corrupt Practices Act?
Issuers are required to make and keep books, records, and accounts that properly reflect transactions and dispositions of assets. The responsibility of the external auditor with respect to the act is to attest to the accuracy of the financial statements. All issuers must devise and maintain a system of internal accounting control sufficient to ensure management’s control, authority, and responsibility over assets, regardless of whether they have foreign operations.
What is a code of conduct?
A code of conduct outlines specific behaviors that are required or prohibited within the organization.
Describe groupthink.
Groupthink is the phenomenon in which individuals become more loyal to the group than to making the best decision. Groupthink often produces more extreme decisions than would have been made by any individual in the group.
What are two methods that can be used to monitor ethical compliance?
Human performance feedback loop
Survey tools
Describe corporate social responsibility (CSR).
CSR is the responsibility a company takes for having an impact on its stakeholders and society. A company can take responsibility for its impact by behaving ethically, legally, and transparently. When applying CSR, a company focuses on maximizing its positive impact on its surroundings and minimizing its negative impact.
In the context of business operations, define sustainability.
Sustainability focuses on the long-term vitality of the business and, therefore, the position the business has to take within society and its environment to continue to operate.
What are the four levels of corporate social responsibility?
What are the four levels of corporate social responsibility?
Economic responsibilities
Legal responsibilities
Ethical responsibilities
Philanthropic responsibilities
What is diversity of thought as it applies to ethical values?
Diversity of thought can improve adherence to ethical values. In more diverse groups, decisions tend to be less one-sided. These groups encourage individuals to participate, discuss ideas, and make fewer assumptions. Greater diversity should mean evaluation of more viewpoints and a higher probability that all relevant issues will be addressed. The effect should be fewer extreme decisions and more compliance with the ethical values of the company.
