Skip to content

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

A multinational adopts a single, rules-based code of ethics for all its subsidiaries. Staff in one country complain that some rules conflict with local customs, and that the code gives no help on situations it did not anticipate. Which pair of limitations is best illustrated?

The scenario shows two limitations: cultural differences between countries that make a single code hard to apply, and the fact that rules-based codes cannot anticipate every situation, leaving staff without guidance in unforeseen circumstances.

  1. AHigh cost of printing and lack of legal status
  2. BCultural differences across jurisdictions and the inability of rules to cover every situationCorrect
  3. CExcessive focus on shareholders and lack of publicity
  4. DDependence on external auditors and lack of internal ownership

Explanation

Conflict with local customs reflects cultural and jurisdictional differences, and the absence of guidance on unforeseen situations reflects the fact that a rules-based code cannot be exhaustive. The other pairs are not described in the scenario.

Did you get it right without looking?

One question tells you little. A timed set on Corporate codes of ethics shows your real accuracy, how long you take and where you lose marks.

Practise Corporate codes of ethicsFree diagnostic mock

More Corporate codes of ethics questions