Stack 3

dexazuxo's version from 2017-05-12 19:00


Question Answer
What is ethics?System of behaviour deemed appropriate in society. ethics tells us how to behave to the rest of society
What is ethical culture?Business culture where basic values in company encourage people within to behave in line with acceptable business ethics
What is ethical audit?process which measures internal and external consistency of a companies value base.
Tax evasion VS tax avoidanceTax evasion: when you pretend to earn less than you do. this is illegal and can be prosecuted..... tax avoidance: Using legal methods to reduce the amount of tax needed to be paid (by shooting costs where higher corp tax, and allocating revenues where low corp tax).....although it maximises return to shareholders, it is a failure to CSR and wider society. EG: STARBUCKS: licenses and coffee purchased in ireland, switzerland and netherland. (no corp tax paid in UK)........GOOGLE: Corp tax on UK profits less that 3%. Tax paid in ireland, netherlands (they maximise revenue and minimise costs)
What are good business values?Truth, transparency, trust, fairness, responsibility
Minimum business ethics?1. Paying staff properly 2. good working conditions 3. Paying suppliers on agreed terms, 4. sourcing supplies properly 5. being open and honest with customers
What makes management manipulate? FEAR: 1) sales deteriorating - avoid bad news to investors -------- 2) may have bank loan covenants - ratios must be met ----- 3) CEO under pressure - may be fired ------- GREED: 1) managers bonuses may be linked to earnings ----- 2) sustained high stock price may lead to expansion
What are debt markets? Market for government and corporate bonds (to raise debt) -----GOVERNMENTS: Issued to fund public deficits ------ CORPORATES: secure long term finance at a fixed interest rate. KEY-bonds are more reliable than dividends
Types of companies most likely to manipulate?1) HIGH GROWTH COMPANIES (want to keep growth steady) ------ 2) FINANCIALLY WEAK COMPANIES: (under financial pressure may breach loan covenants) -------- 3) NEWLY PUBLIC COMPANIES ------ 4) COMPANIES WITH A DOMINANT CEO (cannot speak truth to dictator)