Skip to content

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

Which of the following is the most significant limitation of a rules-based corporate code of ethics compared with a values-based (principles-based) code?

The key limitation is that a rules-based code can encourage box-ticking, and people may exploit gaps where the rules do not specifically apply. It is clear and enforceable, and can be communicated and linked to discipline, but it cannot anticipate every situation or promote the underlying spirit of ethical behaviour.

  1. AIt cannot be communicated to employees
  2. BIt may encourage a box-ticking attitude, and employees may exploit situations not specifically covered by the rulesCorrect
  3. CIt is always longer to read than a values-based code
  4. DIt cannot be linked to disciplinary procedures

Explanation

Rules-based codes list specific permitted and prohibited acts, so they are clear and enforceable. Their weakness is that they cannot cover every situation, and people may comply with the letter while ignoring the spirit. Rules can be communicated and linked to discipline easily, and length is not the key limitation.

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