PQ magazine is for part qualified accountants.
Read the latest web issue here – if you like what you see sign up today
If it’s in the news, then you need to know all about it
AVADO’s Paul Kirkwood focuses on the ACCA F1 topic of Corporate Codes of Ethics, using real news stories to help build knowledge and understanding
In the words of the ACCA, F1 examiner, “success in the F1/FAB paper is dependent on accumulating a reasonable knowledge of a range of diverse subjects. As each of these subjects are disciplines in their own right, there is a vast array of material and no prospective candidate can possibly know every fact or understand every concept fully.”
With such a huge amount of material to work through anything that helps to understand more efficiently and effectively will be of great benefit to us and it will also help us apply our knowledge in the exam room. One tip I give my AVADO ACCA F1 students is to keep up-to-date with the news and, more importantly, to align news stories to your studies.
For example, take the recent forced removal of passenger David Dao from a United (Airlines) flight. This incident can be linked to many F1 syllabus areas, such as stakeholders or internal controls. However, my thoughts were immediately drawn to Corporate Codes of Ethics. Surely United has such a code in place (a Google search can confirm this) and, if so, is it being implemented effectively across the business?
This leads me to a couple of questions highlighted by the F1 examiner in recent exam reports that were not answered well by candidates.
Q1. Which of the following should be included in a corporate code of ethics?
A) A detailed description of all of the commercial objectives of the company.
B) The consequences for employees of violating the standards of behaviour expected of them.
C) A summary of the responsibilities of the individual directors of the company.
D) A list of laws and regulations with which the company will comply.
Thinking about the United case, a code of ethics should provide an overview of the business’s mission, values, objectives and core ethical principles that all employees would understand and be able to apply to their work lives. Applying this basic knowledge to Question 1 we can rule out option A as it would simply be too detailed for an ethical code of conduct. We can rule out option C as the code will apply to all employees. We can also rule option D as it would simply not be practical to include all law and regulations that the company will comply with.
The remaining option B must be correct and indeed codes of ethics do often include consequences for employees of code violations.
There are three key learning points here – firstly, that applying the real world to our learning helps to reinforce our understanding; secondly, that ruling out incorrect answers is vital exam technique to help you choose the right answer; and, thirdly, that you should use questions to build knowledge and understanding. I’m totally convinced that we learn effectively when we get a question wrong and then work out and understand why we got it wrong.
Have a look at this second question relating to corporate codes of ethics:
Q2. Which of the following is the most effective way of ensuring that minimum standards of behaviour set down in a corporate code of ethics are implemented?
A) Issuing a statement from the board of directors stating that the organisation will expect compliance with the code by all staff.
B) Introducing appropriate control systems and communicating the serious consequences of breaches of expected standards.
C) Ensuring that the code is communicated across the whole organisation, and reminding staff of its provisions in ongoing training.
D) Emphasising the benefits to the organisation of compliance with the code, including a higher level of trust by stakeholders.
I think that this is a tough question as all answers are plausible. However, try to focus on the question requirement – what is the most effective way to ensure implementation of the code behaviour standards. To find the answer to this question have a look at the December 2016 ACCA F1 examiner’s report and while you’re there please read through other reports as they are fantastic documents that give you an insight into the F1 exam paper, as well as giving study tips and question practice.
• Paul Kirkwood is AVADO’s ACCA Lead Tutor and a PQ award winner
Subscribe to RSS