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

Brannock Ltd's code of ethics prohibits bribery, but sales staff are paid bonuses solely on hitting aggressive targets, and no one has been disciplined for breaches. Which is the most accurate assessment?

The code is likely to be undermined. Target-only bonuses encourage staff to cut corners, and the absence of discipline shows breaches are tolerated. A code needs aligned reward systems and consistent enforcement; a written prohibition alone does not change behaviour.

  1. AThe code is effective because it clearly prohibits bribery in writing
  2. BThe code is likely to be undermined because reward systems and lack of enforcement conflict with its stated valuesCorrect
  3. CThe code is unnecessary because bribery is already illegal

Explanation

Incentives that reward results at any cost, together with no sanctions for breaches, signal that the code is not taken seriously. A written prohibition alone is not enough. Legal prohibition does not remove the benefit of a code reinforcing expected conduct.

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