List the four principles of IMA Statement.
Fairness, Objectivity, Responsibility and Honesty (FORH)
List the four standards of IMA Statement.
Competence, Confidentiality, Integrity and Credibility (CCIC)
List requirements for standard “competency”.
- Enhance knowledge and skills
- Perform duties in accordance with relevant laws, regulations and standards
- Provide information for decision-making that are timely, accurate, concise and clear
- Help to manage risk
List the requirements for standard “confidentiality”.
- Keep information confidential except when disclosure is legally required and authorized
- Inform relevant parties the appropriate use of confidential information; monitor to ensure compliance
- Refrain from using confidential information for unethical and illegal personal gain
List the requirements for standard “integrity”.
- Mitigate actual and avoid apparent conflict of interest
- Refrain from engaging in activities that discredit the profession
- Refrain from engaging in activities that affects one’s judgment to carry out duties ethically
- Contribute to positive ethical culture; place integrity of the profession above
List the requirements for standard “credibility”.
- Communicate information fairly and objectively; communicate any limitations and constraints
- Provide all relevant information that may reasonably influence the intended user’s understanding of the reports, analyses or recommendations
- Report any deficiencies in information, timeliness, processing and internal controls
List the steps to resolve ethical issues.
- Don’t ignore but actively seek resolution
- Follow the established policies of the organization
- Use the anonymous reporting system if available
- If there’s no established policies, then discuss with the immediate supervisor
- If the immediate supervisor is involved, then discuss with the next level of management
- Call the IMA helpline for key elements to be applied
- Consult with one’s own attorney to learn legal obligations, rights and risks
- Consider to disassociate from the organization if there’s no successful resolution
List the provisions of FCPA (Foreign Corrupt Practice Act of 1977)
Accounting:
1. Keep books, records and accounts that properly reflect transactions and dispositions of assets
2. Have internal accounting control in place and maintain the system to ensure management’s control, authority and responsibility over assets (regardless if there are foreign operations or not)
Anti-Bribery:
1. No corrupt payment may be offered or authorized to foreign officials, foreign political parties, or candidate for foreign political office
*payment to foreign business owners, foreign corporate officers or US domestic officials are not addressed here
Who is subject to the FCPA Anti-Bribery provision?
- Domestic concern, including any person acting on a concern’s behalf (whether or not doing business overseas; whether or not registered with the SEC)
- Both US and foreign companies, including the rep/agent, that are traded on a US stock exchange or are required to file reporting with the SEC
- All concerns and individuals other than US domestic concerns/issuers (foreign nationals and foreign non-issuing companies) acting corruptly while in the US
What are corrupt payments?
Payments intended to improperly influence the recipient to act or refrain from acting with the mere goal to obtain or retain business. However, de minims gifts and tokens of hospitality are acceptable.
What is passive bribery?
Receiving or accepting a bribe. It is not prohibited under FCPA.
What are requirements for financial institutions under FCPA?
Watch out for money laundering and terrorist financing.
What are “grease” payments?
Payment to foreign government officials when the purpose is to facilitate the processing of paperwork, securing a license or receiving utility services, etc. Congress permits this type of payment so that US companies may not face disadvantages in some countries.
What is the most significant provision of Sarbanes-Oxley Act of 2002 (SOX) regarding ethics in section 406(a)?
It requires any company that issues securities to disclose whether or not such issuer has adopted a code of ethics for senior financial officers (principal financial officer, controller, principal accounting officer, or persons performing similar functions). If not, the reason why there’s no code of ethics adopted.
What is “leadership by example”?
AKA “tone at the top”. It’s important in determining an organization’s ethical environment. People tend to believe what they see instead of what they are told. Everyone in the organization is responsible to behave ethically; thus, it’s most important that managers and supervisors demonstrate ethical behaviors in their day-to-day work.
Explain the “Human Capital” concept.
Employees cannot be watched in every aspect of their work due to high labor costs and slimming down of supervision, so the organization must (to a great degree) trusts that its employees are acting in its best interests. Therefore, it’s critical to hire and train employees to align their values and ethics to the organization’s expectations. This helps to create a climate where “doing the right thing” is expected.
What is human performance feedback loop?
It ensures that performance review and development system are aligned with the requirements for ethical conduct. Job descriptions and objectives should include ethical expectations. Employee review systems must assess employees against the same criteria. Key performance indicators must include tracking of employees against ethical training requirements.
What is a whistleblowing framework?
It’s an effective feedback system that includes a confidential helpline for employees to report possible violations of code of ethics and to receive advice. Large number of occupational fraud cases are detected via an employee hotline or other reporting method.
True or False. A comprehensive framework of corporate ethical behavior is a prerequisite for an effective system of internal control.
True. The executives have to place their own integrity on the line by attesting to compliance with an adequate level of internal controls.
What’s the challenge for an organization to apply its values and ethical standards internationally?
Individuals from dissimilar cultural backgrounds and countries may have very different values and basis for decision making and actions. When an organization has individuals from different backgrounds, it’s the management’s job to clearly define its expectations for ethical behavior and encourage for complying.
What is business process reengineering?
It’s a tool to identify ethical and behavior issues. It provides a structured view of organizational processes that shows each task and the associated risk from transforming input to output.
What is quality management?
It provides visibility on process performance and risk. The goal is to achieve “zero defects” by avoiding unplanned mistakes and costly rework.
What is continual process improvement?
The concept is to develop a “learning organization” where continual monitoring and assessment of process performance leads to the identification of potential behavioral issues.
How does SOX define code of ethics?
- Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest
- Full, fair, timely and understandable disclosure of reports
- Compliance with applicable government rules and regulations
