ACCA Applied Knowledge · Business and Technology · Corporate codes of ethics
Which of the following is an advantage of a corporate code of ethics based on principles rather than detailed rules?
A principles-based code can be applied to new situations that specific rules did not anticipate, because employees use the underlying values to guide judgement. It does not remove the need for judgement, and breaches are generally harder, not easier, to prove than under detailed rules.
- AIt removes the need for employees to use judgement
- BIt can be applied to new situations that specific rules did not anticipateCorrect
- CIt makes breaches easier to prove in every case
Explanation
A principles-based code gives broad values that employees apply to varied circumstances, including new ones. It requires judgement rather than removing it, and a rules-based approach, not a principles-based one, makes breaches easier to prove.
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