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ACCA Applied Knowledge · Business and Technology · Corporate codes of ethics

A company wants its code of ethics to give employees clear guidance on accepting gifts from suppliers. Which approach to drafting the code is MOST appropriate?

The most appropriate approach is to include a specific policy, such as a value limit on gifts and a duty to declare those received. Clear practical guidance on known risk areas makes the code usable and consistent, unlike vague statements or individual managers' discretion.

  1. AState only that employees must always act ethically, with no further detail
  2. BInclude a specific policy, such as a value limit and a requirement to declare gifts receivedCorrect
  3. CBan all discussion of gifts so the issue is never raised
  4. DLeave gifts to each manager's personal judgement without written guidance

Explanation

Codes are most useful when they give practical, specific guidance on common risk areas such as gifts and hospitality, including limits and disclosure. Vague statements and unwritten manager discretion lead to inconsistent behaviour, and avoiding the topic leaves the risk unmanaged.

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