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ACCA BT Chapter 5 – Corporate governance and ethical considerations – Questions

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    • Risk and Cost: When the risk is low, it means there’s less chance of something going wrong or causing problems. Ethical organizations, which follow good principles and rules, often have fewer issues to deal with. Because of this, they don’t need to spend as much money on fixing problems or dealing with legal issues. So, lower risk leads to lower costs for ethical organizations.

      Getting Money at Lower Rates: Banks and other places that provide money to organizations (like loans) want to make sure they’ll get their money back. If an organization is ethical and has low risk, it’s seen as a safer investment. As a result, these providers of money are more willing to give the money at lower interest rates, meaning the ethical organization can borrow money more affordably.

    • I assuming you are referring to Q3.

      There might be initial costs to ethical behaviour (eg not winning a contract because you refuse to use bribery). However, the assumption is that, in the long run your sins will find you out and you will be subject to reputational damage and perhaps legal sanctions. These costs are likely to outweigh the initial benefit.

  6. Good evening, May i clarify on the question ‘The deontological approach’

    The textbook quote Ethics can be approached either by consequentialism or duty (the deontological approach )

    Does that mean the deontological approach is similar to Consequentialism/Duty?

    • Deontology means ‘duty’. Deontology states that the morality or ethics of an action should be judged on whether the action is right or wrong according to a series of rules, rather than being based on the consequences of the action.

      Consequentialism is the theory that judges an action by what its consequences are. For instance, generally people agree that killing someone is wrong, but if killing someone (eg a terrorist) saves other lives then consequentialism says that would be the right thing to do.

      • We provide only relatively few questions to make you think after each chapter. Before the exam you need to practise many, many questions so you need to buy a revision kit/question bank from BPP or Kaplan. You get a 20% discount if you buy BPP books through this site.

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