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

Zentra Ltd has a code of ethics that lists values such as honesty and fairness but contains no procedure for staff to report suspected breaches and no consequences for non-compliance. Which weakness does this MOST directly create?

The most direct weakness is that the code is unlikely to be enforced. With no way to report breaches and no consequences for non-compliance, staff may ignore it, so it remains a statement of intent with little real influence on behaviour.

  1. AThe code will be illegal under company law
  2. BThe code is unlikely to be enforced, so it may have little effect on behaviourCorrect
  3. CThe code will be too detailed for staff to understand
  4. DThe code will conflict with the fundamental principles of the ACCA

Explanation

Without reporting channels and stated consequences, breaches may go unreported and unpunished, so the code becomes a statement of intent with little practical effect. A code is not illegal for lacking these features, and nothing here suggests excessive detail or conflict with ACCA principles.

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