ACCA Applied Knowledge · Business and Technology · Corporate codes of ethics
A company wants its code of ethics to work effectively across several countries with differing laws and customs. Which approach is most likely to suit this aim, and why?
A principles-based approach supported by guidance suits a multinational best, because core values such as integrity can be interpreted sensibly in different legal and cultural contexts. Detailed rules rarely fit every jurisdiction and may conflict with local laws or customs.
- APurely rules-based, because detailed rules are identical in every jurisdiction
- BPrinciples-based, supported by guidance, because core values can be interpreted sensibly in different local contextsCorrect
- CNeither, because a code of ethics cannot be used across different countries
Explanation
Core principles such as integrity and honesty travel across borders, while detailed rules often conflict with local law or custom. Supporting guidance helps staff apply judgement consistently. The claim that codes cannot operate internationally is incorrect.
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