ACCA Applied Knowledge · Business and Technology · Corporate codes of ethics
A code of ethics states: 'Employees must not accept gifts from suppliers worth more than a nominal amount, and any gift must be declared.' Which type of ethical risk is this provision primarily designed to reduce?
The gifts provision is designed to reduce bribery and conflicts of interest in supplier dealings. Limiting and declaring gifts makes it harder for inducements to influence purchasing decisions. It does not address forecasting accuracy or staff turnover.
- AInaccurate financial forecasting by the finance team
- BBribery and conflicts of interest in dealings with suppliersCorrect
- CExcessive staff turnover in the purchasing department
Explanation
Limiting and declaring gifts reduces the risk that purchasing decisions are influenced by inducements, which is bribery and conflict of interest. It does not address forecasting accuracy or staff turnover.
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