Fundamentals of Ethics,

Corporate Governance and Business Law

2nd Edition (April-2020)

Fundamentals of Ethics,
Corporate Governance
and
Business Laws

__________________________________________________________________
Md. Monowar Hossain, FCA, CPA, FCMA
FCS, CIA, CIFRS, FIFC, CIPFA(UK), CGA
Chief Financial Officer (CFO) &
Head of Internal Control and Compliance (ICC)
Agrani Bank Limited
e-Mail: md.monowar@gmail.com
__________________________________________________________________

The contents of this paper may not be transmitted, re-published, modified, reproduced, distributed, copied, or sold without the prior consent of the author.
Page# 1
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
 Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

Md. Monowar Hossain FCA, CPA, FCMA

FCS, CIA, CPFA(UK), CIFRS, FIFC, MBA
Head of Internal Control and Compliance (ICC) and CFO,
Agrani Bank Limited.
Former ‘Consultant (ED), Office of the Chief Accountant,
Bangladesh Securities and Exchange Commission (BSEC).
Former ‘GM (Internal Control and Compliance)’, Rupali Bank Ltd.
Former ‘Head of Corporate Governance & Financial Reporting Compliance
(CGFRC)’, Dhaka Stock Exchange Ltd.
Former ‘Head of Finance & Company Secretary’, Brummer & Partners
AB.
Former ‘Financial Management Consultant’, Institute of Social Studies
(ISS), Netherlands activity at the University of Dhaka, Bangladesh.

Md. Monowar Hossain, a Chartered Accountant, a Management Accountant, a Chartered Secretary,

Certified General Accountant, qualified from the ICAB, ICMAB, ICSB, ICGAB respectively. A qualified
member of all four professional Institutions in Bangladesh. At present, serving as the Head of Internal
Control & Compliance (ICC) and Chief Financial Officer (CFO) at Agrani Bank Limited from 1st
March 2015, a State-Owned Commercial Bank having 960 Branch networking with 14,000 human capital.

In 25years, professional experiences, contributed…

(1) At Agrani Bank:
 General Manager, Head of Internal Control & Compliance (ICC): 01/03/2015 and continuing
 Chief Financial Officer (CFO): 04/07/2019 (MD Circular: 09/19) and continuing
 Head of Agrani Equity Investment Co. Ltd. (Subsidiary of Agrani Bank Limited:
04/07/2019 to 19/09/2019.
 Head of Corporate Branches:
• Purana Palton Corporate Branch: 04/07/2019 to 19/09/2019
• Moulavi Bazar Corporate Branch: 04/07/2019 to 19/09/2019
• Uttara Corporate Branch: 04/07/2019 to 19/09/2019
• Bangabandhu Road Corporate Branch, N. Gang: 04/07/2019 to 19/09/2019.
(2) ‘Bangladesh Securities and Exchange Commission (BSEC)’ as the ‘Consultant of Office of the
Chief Accountant (Executive Director position)’;
(3) ‘General Manager (Internal Control and Compliance, ICC)’ at ‘Rupali Bank Ltd.’, responsible for
managing ICC risk through the Audit & Inspections, Monitoring and overall Compliance in the Bank;
(4) ‘Head of Corporate Governance & Financial Reporting Compliance (CGFRC)’ in ‘Dhaka Stock
Exchange Ltd.’ for 4 years;
(5) ‘Head of Finance & Company Secretary’ for ‘Brummer & Partners AB’, multinational
organization of Sweden, in its Dhaka Office;
(6) ‘SGS Bangladesh Limited’ for 6 years;
(7) ‘Cho Yang Line’ for 2 years;
(8) Worked as the ‘Financial Management Consultant’ at the ‘Institute of Social Studies (ISS)’,
Netherlands’ activities at Dhaka University, Bangladesh for 7 years.

Also, a Member of CIPFA(UK), Fellow Member of the Institute of Financial Consultant, a Fellow Member of
the Institute of Internal Auditor (IIA), USA. Did Masters in ‘Accounting’ and ‘MBA’. Have a long experience
in Regulatory Compliance, IFRS/IAS Compliance, Internal Control and Compliance (ICC), Auditing, Internal
Audit, Finance & Accounts, Taxation and Company Secretarial issues for more than 25 years.

One of the Co-Founder of the ‘Foundation of Chartered Taxation of Bangladesh (FCTB)’. Its objective is to
Increase Tax Payers, Strengthening Tax-net and Increase the Tax Revenue of Bangladesh. FCTB and United
International University (UIU) are jointly offered the ‘Post Graduate Diploma in Tax Management (PGDTM)’,
a specialized value-added qualification in tax management and tax compliance.

Page# 2
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
 Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)
GE05: Fundamentals of Ethics, Corporate Governance and Business Law
A Ethics and business
B Ethical conflict
C Corporate governance
D Comparison of English law with alternative legal systems
E The law of contract
F The law of employment
G Company administration and finance
GE05 – A. Ethics and business (15%)
Learning outcomes
On completion of their studies students should be able to:
Lead Component
1. demonstrate an (a) apply the values and
understanding attitudes that provide
of the professional accountants
importance of with a commitment to act in
ethics to the public interest and with
business social responsibility;
generally and to (b) explain the need for a
the professional framework of laws,
accountant. regulations and standards in
business and their
application;
(c) explain the nature of ethics
and its application to
business and the
accountancy profession;
(d) distinguish between detailed
rules based and framework
approaches to ethics.
2. explain the need (a) explain the need for
for CIMA continual personal
members to improvement and lifelong
adopt the learning;
highest (b) explain the need to develop
standards of the virtues of reliability,
ethical responsibility, timeliness,
behaviour. courtesy and respect;
(c) explain the ethical principles
of integrity, objectivity,
professional competence,
due care and confidentiality;
(d) identify concepts of
independence, scepticism,
accountability and social
responsibility;
(e) explain the reasons why
CIMA and IFAC each have a
‘Code of Ethics for
Professional Accountants’.
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Syllabus structure
Topics Study weightings
15%
10%
10%
10%
20%
10%
25%
100%
Indicative syllabus content
Level
3 (1) The importance of ethics.
(2) Values and attitudes for professional
accountants.
(3) Legal frameworks, regulations and
standards for business.
(4) The role of national ‘Professional Oversight
2 Boards for Accountancy’ and ‘Auditing
Practices Boards’.
(5) The role of international accounting bodies
e.g. IFAC.
(6) The nature of ethics and its relevance to
2 business and the accountancy profession.
(7) Rules based and framework approaches to
ethics.
(8) The ‘Seven Principles of Public Life’ –
2 selflessness, integrity, objectivity,
accountability, openness, honesty and
leadership.
2 (9) Personal development and lifelong
learning.
(10) The personal qualities of reliability,
responsibility, timeliness, courtesy and
2 respect.
(11) The ethical principles of integrity and
objectivity.
(12) Professional competence, due care and
2 confidentiality.
(13) Disclosure required by law.
(14) The concepts of independence, scepticism,
accountability and social responsibility.
2 (15) The CIMA and IFAC ‘Code of Ethics for
Professional Accountants’.
2
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Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

GE05 – B. Ethical conflict (10%)

Learning outcomes
On completion of their studies students should be able to: Indicative syllabus content
Lead Component Level
1. explain the (a) explain the relationship between 2 (16) The relationship between ethics and the
various means ethics, governance, the law and law.
of regulating social responsibility; (17) The distinction between ethical codes
ethical (b) describe the consequences of 2 and contracts.
behaviour. unethical behaviour to the (18) Corporate governance and social
individual, the profession and responsibility.
society. (19) Unethical behaviour.
(20) The consequences of unethical
behaviour.
2. explain how (a) identify situations where ethical 2 (21) The nature of ethical dilemmas.
ethical dilemmas dilemmas and conflicts of interest (22) Conflicts of interest and how they
and conflicts of occur; arise.
interest arise (b) explain how ethical dilemmas and 2 (23) Ethical conflict resolution.
and may be conflicts of interest can be (24) The CIMA Code of Ethics for
resolved. resolved. Professional Accountants –
‘Fundamental Principles’.

GE05 – C. Corporate governance (10%)

Learning outcomes
On completion of their studies students should be able to: Indicative syllabus content
Lead Component Level
1. explain the (a) define corporate governance; 1 (25) The role and key objectives of
development of (b) explain the interaction of corporate 2 corporate governance.
corporate governance with business ethics and (26) The interaction of corporate
governance to company law; governance, ethics and the law.
meet public (c) describe the history of corporate 2 (27) The development of corporate
concern in governance internationally; governance internationally e.g. in the
relation to the UK, Europe, South Africa and the
management of (d) distinguish between detailed rules 2 USA.
companies. based and principles based approaches (28) Rules and principles-based
to governance. approaches to governance.
2. explain the (a) explain the effects of corporate 2 (29) The impact of corporate governance
impact of governance on directors’ powers and on directors’ powers and duties.
corporate duties; (30) Types of board structures, the role of
governance on (b) describe different board structures, the 2 the board and corporate social
the directors role of the board and corporate social responsibility (CSR).
and responsibility; (31) The role of the board in establishing
management (c) describe the types of policies and 2 corporate governance standards.
structure of procedures that constitute ‘best (32) Corporate governance codes e.g. The
public limited practice’; UK Corporate Governance Code.
companies and (d) explain the regulatory governance 2 (33) Policies and procedures for ‘best
how this framework for companies and benefits practice’ companies.
benefits to stakeholders. (34) The regulatory governance framework
stakeholders. for companies.
(35) Stakeholder benefits.

GE05 – D. Comparison of English law with alternative legal systems (10%)

Learning outcomes
On completion of their studies students should be able to: Indicative syllabus content
Lead Component Level
1. explain the (a) explain the manner in which 2 (36) The purpose of the civil and criminal
essential behaviour within society is regulated law.
elements of the by the civil and the criminal law; (37) The sources of English law: custom,
English legal (b) explain the sources of English law; 2 case law, statute, European law and
system and the (c) illustrate the operation of the 2 other sources.
tort of doctrine of precedent by reference to (38) The distinction between the common
negligence. the essential elements of the tort of law and equity.
(39) The system of judicial precedent.

Page# 4
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

negligence and its application to (40) The essential elements of the tort of
professional advisers. negligence, including duty, breach
and damage/loss/injury and the
liability of professionals in respect of
negligent advice.
2. describe the (a) describe the characteristics of the 2 (41) Alternative legal systems, including
essential legal systems found in other codified (civil law) systems.
elements of countries; (42) The general characteristics of the
alternative (b) describe elements of Shari’ah law; 2 legal systems of France, Germany,
legal systems. (c) describe the role of international 2 Poland, Italy, Denmark, Greece and
regulations. Cyprus.
(43) The general characteristics of the
legal systems of the USA, Malaysia,
China and Sri Lanka.
(44) Elements of Shari’ah law including
sources of Shari’ah law and the Five
Pillars of Islam.
(45) The benefits of international
regulations for commerce and
professional practice through the
work of key bodies e.g. IFAC, ISO,
FEE.

GE05 – E. The law of contract (20%)

Learning outcomes
Indicative syllabus content
On completion of their studies students should be able to:
Lead Component Level
1. explain how the (a) identify the essential elements of a 2 (46) The essential elements of a valid
law determines valid simple contract and situations simple contract.
the point at where the law requires the contract to (47) The legal status of statements made
which a contract be in a particular form; by negotiating parties. Offers and
is formed and (b) explain how the law determines 2 acceptances and the application of the
the legal status whether negotiating parties have rules to standard form contracts using
of contractual reached agreement and the role of modern forms of communication.
terms. consideration in making that (48) The principles for establishing that the
agreement enforceable; parties intend their agreement to have
(c) explain when the parties will be 2 contractual force and how a contract is
regarded as intending the agreement affected by a misrepresentation.
to be legally binding and how an (49) Incorporation of express and implied
agreement may be avoided because terms, conditions and warranties.
of misrepresentations; (50) The main provisions of the Sale of
(d) explain how the terms of a contract 2 Goods Act 1979 and the Supply of
are established and their status Goods and Services Act 1982.
determined; (51) Excluding and limiting terms; the
(e) describe the effect of terms implied 2 Unfair Contract Terms Act 1977 and
into contracts by sale of goods and the Unfair Terms in Consumer
supply of goods and services Contracts Regulations.
legislation;
(f) describe how the law controls the use 2
of excluding, limiting and unfair
terms.
2. explain when (a) describe the factors which cause a 2 (52) Discharge of a contract by
the law regards contract to be discharged; performance, agreement and breach.
a contract as (b) explain how the law of frustration 2 (53) The law relating to frustration.
discharged and provides an excuse for non- (54) The law relating to damages.
the remedies performance of the contract; (55) The remedies of specific performance,
available for (c) explain the remedies which are 2 injunction, rescission, and requiring a
breach and available for serious and minor contract party to pay the agreed price.
nonperformance breaches of contract.
.

GE05 – F. The law of employment (10%)

Page# 5
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

Learning outcomes
On completion of their studies students should be able to: Indicative syllabus content
Lead Component Level
1. explain the (a) explain the differences between 2 (56) The tests used to distinguish an
essential employees and independent employee from an independent
elements of an contractors; contractor.
employment (b) explain how the contents of a contract 2 (57) The express and implied terms of a
contract and of employment are established; contract of employment.
the remedies (c) explain the distinction between unfair 2 (58) The rights and duties of employers and
available and wrongful dismissal. employees.
following (59) Notice and dismissal.
termination of (60) Unfair and wrongful dismissal.
the contract.
2. explain the (a) explain how employers and employees 2 (61) The main rules relating to health and
impact of are affected by health and safety safety at work, sanctions on employers
health and legislation; for non-compliance, and remedies for
safety law on (b) describe the consequences of a failure 2 employees.
employers and to comply with health and safety (62) Social security compensation.
employees. legislation. (63) Civil liability for occupational injuries.

GE05 – G. Company administration and finance (25%)

Learning outcomes
On completion of their studies students should be able to: Indicative syllabus content
Lead Component Level
1. explain the (i) describe the essential characteristics of 2 (64) The essential characteristics of sole
nature, legal the different forms of business traderships/practitionerships,
status and organisations and the implications of partnerships, companies limited by
administration corporate personality; shares and corporate personality.
of business (65) ‘Lifting the corporate veil’ both at
organisations. common law and by statute.
(ii) explain the differences between public 2 (66) The distinction between public and
and private companies and establishing private companies.
a company by registration or (67) Company registration and the
purchasing ‘off the shelf’; advantages of purchasing a company ‘off
(iii) explain the purpose and legal status of 2 the shelf’.
the articles of association; (68) The purpose and contents of the articles
(iv) explain the ability of a company to 2 of association.
contract; (69) Corporate capacity to contract.
(v) explain the main advantages and 2 (70) The advantages and disadvantages of
disadvantages of carrying on business the company limited by shares.
through the medium of a company (71) Board meetings: when used and the
limited by shares; procedure at the meeting.
(vi) explain the use and procedure of board 2 (72) General Meetings of shareholders: when
meetings and general meetings of used and the procedure at the meeting.
shareholders; (73) The voting rights of directors and
(vii) explain the voting rights of directors 2 shareholders.
and shareholders; (74) Ordinary, special and written resolutions
(viii) identify the various types of 2 and their uses.
shareholder resolutions.
2. explain the law (a) explain the nature of different types of 2 (75) The rights attaching to different types of
relating to the shares, the procedure for their issue shares.
financing and and acceptable forms of payment; (76) The procedures for issuing shares.
management (b) explain the maintenance of capital 2 (77) The issue of shares for an improper
of companies principle and the reduction of share purpose.
limited by capital; (78) Payment for shares.
shares. (c) explain the ability of a company to 2 (79) The maintenance of capital principle: the
take secured and unsecured loans, the purposes for which shares may be
different types of security and the issued, redeemed or, purchased and the
registration procedure; provision of financial assistance for the
(d) explain the procedure for the 2 purchase of the company’s own shares.
appointment, retirement, (80) The reduction of capital.

Page# 6
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

disqualification and removal of (81) The ability of a company to borrow

directors; money and the procedure to be followed.
(e) explain the powers and duties of 2 (82) Unsecured loans, and the nature and
directors when in office; effect of fixed and floating charges.
(f) explain the rules dealing with the 2 (83) The appointment, retirement and
possible imposition of personal liability removal of directors and their powers
upon the directors of insolvent and duties during office.
companies; (84) Fraudulent and wrongful trading,
(g) explain the rights of majority and 2 preferences and transactions at an
minority shareholders; under-value.
(h) explain the division of powers 2 (85) The rights of majority and minority
between the board of a company and shareholders.
the shareholders; (86) The division of powers between the
(i) explain the qualifications, powers and 2 board and the shareholders.
duties of the company secretary. (87) The qualifications, powers and duties of
the company secretary.

Recommended Books:
1. CMA Study Text on Paper IE 01: Principles of Accounting
2. Steven J. Skinner, John M. Ivancevich (2002), Business 21st Century
3. Mallin, Christine, A. 2010. Corporate Governance (3rd edition), Oxford: Oxford
University Press
4. McKendrick, Law of Contract.
5. A Text Book on Law of Contract, under National Law Book Company,
Nilkhet Dhaka, by Md. Haider Ali, 2nd Edition, 2011.
6. A text book on Easy understanding of The Law of Contract (Theory and
Practice) has been published, publisher: Hira Publication, by Syed
Sarfaraj Hamid, 4th Edition,2011.

Page# 7
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

Fundamentals of Ethics,
Corporate Governance and Business Laws
Module -01 1. The importance of ethics.
2. Values and attitudes for professional accountants.
Ethics and 3. Legal frameworks, regulations and standards for business.
business 4. The role of national ‘Professional Oversight Boards for Accountancy’
(15%) and ‘Auditing Practices Boards’.
5. The role of international accounting bodies e.g. IFAC.
6. The nature of ethics and its relevance to business and the
accountancy profession.
7. Rules based and framework approaches to ethics.
8. The ‘Seven Principles of Public Life’ – selflessness, integrity,
objectivity, accountability, openness, honesty and leadership.

Ethics Ethics refers to human

At its simplest, ethics is a system conduct as to make
of moral principles. They affect judgments between what is
how people make decisions and lead right and what is wrong.
their lives. Ethics is concerned with should have ...
what is good for individuals and  Honesty
society and is also described as  Objectivity
moral philosophy.  Integrity
 Carefulness
The term is derived from the Greek  Confidentiality
word ethos which can mean custom,  Social Responsibility
habit, character or disposition.  Competence
 Legality

Ethics covers the following dilemmas:

• how to live a good life

• our rights and responsibilities
• the language of right and wrong
• moral decisions - what is good and bad?

The basic concepts and

fundamental principles of decent
human conduct. It includes study Our concepts of ethics have been derived from
of universal values such as the religions, philosophies and cultures. They infuse
essential equality of all men and debates on topics like abortion, human rights and
women, human or natural rights, professional conduct.
obedience to the law of land,
concern for health and safety and,
increasingly, also for the natural
environment.
1
Code of Ethics of a Professional Accountant

Fundamental Principles - A Professional Accountant shall comply with the following

fundamental principles:

1
https://www.ifac.org/system/files/publications/files/ifac-code-of-ethics-for.pdf

Page# 8
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

a) Integrity – to be straightforward and honest in all professional and business

relationships.
b) Objectivity – to not allow bias, conflict of interest or undue influence of others to
override professional or business judgments.

c) Professional competence and due care – to maintain professional knowledge and

skill at the level required to ensure that a client or employer receives competent
Professional Services based on current developments in practice, legislation and
techniques and act diligently and in accordance with applicable technical and
professional standards.

d) Confidentiality – to respect the confidentiality of information acquired as a result of

professional and business relationships and, therefore, not disclose any such
information to third parties without proper and specific authority, unless there is a
legal or professional right or duty to disclose, nor use the information for the personal
advantage of the accountant or third parties.

e) Professional behaviour – to comply with relevant laws and regulations and avoid
any action that discredits the profession.

The importance of ethics

Good Ethics is a fundamental requirement of any profession. It is integral to the

success of the business as well. Ethics is a system of moral principles governing the
appropriate conduct of a person or a group. Maintaining good ethics is being consistent with
the principles of correct moral conduct constantly.

1. Satisfying Basic
Human Needs
2. Creating Credibility
within the
organization
3. Uniting People and
Leadership
4. Improving Decision
Making
5. Able to achieve Long
Term Gains
6. Securing the Society

The importance of ethics in professional life can be evidenced by a number of instances

showing failure of businesses and several scandals. It may be rightly said that the situations
would not have been so worsened had there been observance of ethical standards. Therefore,
maintaining ethical standards is must for the prosperity of an organization as well as the
development of one’s personality. Good ethics will lead us to maintain our honest image. It
will enable us to refrain from such activities that may discredit to our profession. Thus,
adhesion to good ethics is to let our conscience be our guide at all times. Ethics is the activity
of man directed to secure the inner perfection of his own personality.

Page# 9
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

Values and attitudes for professional accountants

Values: Important and lasting beliefs or Attitudes: A predisposition or a tendency to

ideals shared by the members of a culture respond positively or negatively towards a
about what is good or bad and desirable or certain idea, object, person, or situation.
undesirable. Values have major influence Attitude influences an individual's choice of
on a person's behavior and attitude and action, and responses to challenges,
serve as broad guidelines in all situations. incentives, and rewards.
Some common business values are Four major components of attitude are
fairness, innovation and community a) Affective: emotions or feelings.
involvement. b) Cognitive: belief or opinions held
consciously.
The monetary worth of something in areas c) Conative: inclination for action.
such as accounting, economics, marketing d) Evaluative: positive or negative
or mathematics. response to
stimuli.
Professional accountants, whether practicing in public or private practice have an
important leadership role in society. Society expects professional accountants to behave and
act in the public interest. Proper ethical behaviour is therefore as important as technical
competence and together forms the basis to the definition of professional behaviour. This is
one of the fundamental principles in the CIMA ‘Code of Ethics’ and is defined as ‘a
professional accountant should comply with relevant laws and regulations and
should avoid any action that discredits the profession’.
An individual’s values and attitudes underpin that person’s behaviour or manner in which they
conduct themselves. Value words such as integrity, honesty and transparency; and attitudes,
such as desire to ‘do the right thing’ will help guide that individual. In professional life, values
and attitudes are codified in a code of ethics which clarifies the behaviour expected of
members of that profession.

Business life, in whatever sector, can throw up many changes and challenges to professional
accountants; throughout which professionals need to demonstrate consistency in their
application of ethical values, attitudes and in their behaviour towards others. It is primarily in
the relationships with others that values and attitudes are demonstrated. Professionals always
need to behave with integrity, to be reliable and work in a timely fashion in his/her dealings
with colleagues, customers, clients, suppliers and all others they come into contact with.
However, against a backdrop of being constant despite change, professionals need to be
aware of the wider expectations of society in order to fulfill their public role.

Society values and expectations do however change from time to time, usually in reaction to
events such as where there has been evidence of corporate failure due to misdemeanour or
fraud. Professional accountants, therefore, need to understand and be sensitised to ethical
issues and pressures, such as ethical implications when taking decisions, to play their role in
protecting against such instances. This is important in helping to build public confidence and
trust in business and the profession directly. If such confidence falters, society through the
democratic process may introduce new laws to curb excessive behaviours. The failure in public
confidence brought about by Enron was the genesis of the introduction of the Sarbanes-Oxley
Act in 2002.

In real life applying values and demonstrating the right attitude of doing the right thing
because it is the right thing to do can be difficult and takes courage.

Page# 10
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

Example-1

MUTTAKEEN is a qualified management accountant in a light engineering company. It is a

family-run company but does have a number of minority shareholders owning 15% of the
company’s shares. It is the year-end and the company has been through a difficult time
having lost a key client this year, but a memorandum of understanding has now been signed
with a new customer which bodes well for the future. Whilst future sales seem assured, the
MOU is not legally binding. MUTTAKEEN’s Boss, who is not an accountant and is also married
to the owner’s daughter, asks MUTTAKEEN to book a proportion of future sales into this year’s
accounts, telling him the paperwork will be following by the year-end and the factory is to
begin making the products required.
What should MUTTAKEEN do?
MUTTAKEEN’s options:
1) Do as requested
2) Challenge the request
3) Ask for the request in writing
4) Refuse
5) Bring this to the attention of the owner
6) Seek a second opinion from a fellow professional accountant
7) Start looking for another job.

Given the background to this situation, MUTTAKEEN will need to demonstrate courage in
challenging the request that has been made, until he has seen a written order for the new
customer. To do otherwise would be wrong as the year-end accounts would be false, if the
transactions were booked before orders were received.

MUTTAKEEN would be demonstrating the fundamental principles of integrity (being

straightforward and honest), objectivity (refusing undue influence) and diligence (acting in
accordance with applicable and technical standards).

Example-2
MONYEM Properties is a mendium-sized property development company specialising in buying
up inner city sites and redevel-oping them. They mostly build houses on these sites. They
have recently purchased a large site which was a former town gasworks. The price was very
good and MONYEM has immediately put in for planning permission. They have a certificate
from the vendor regarding the environmental cleanup that was done, which they intend to
rely on in their planning application.

What do you think they should do?

Options:

(a) MONYEM Properties continue to seek planning permission

(b) MONYEM Properties could commission their own environmental survey.

MONYEM Properties, acting responsibly, would need to satisfy themselves that the
environmental certificate was valid and the site had been cleaned up to make it suitable for
housing. To do otherwise would potentially be a risk to their reputation if subsequently the
land was proved to be unsuitable for housing use.

Page# 11
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)

Legal frameworks, regulations and standards for business

The combination of legal

frameworks, regulations,
guidelines and standards for
business are needed to
provide guidance on
behaviours. They exist for
individuals, and collective
bodies to adhere to, and are
a means of engendering
public trust and integrity in
the profession.
They are administered
through and by a number of
regulatory bodies as decreed
by parliament and the
accountancy profession, in
the case of self-regulatory
guidelines which the
accountancy profession has
collectively set itself.

There are two categories of framework:

(1) The first is legally binding and therefore is mandatory on all governed by them, to
comply.
(2) The second is voluntary in nature, where it is good or best practice to follow the
guidelines/standards and to adhere to them as well.

There are a number of frameworks in existence which govern the accounting profession. With
respect to ethical considerations, in the UK the lead has been taken by the Financial Reporting
Council (FRC). The FRC is the UK’s independent regulator for corporate reporting and
governance, with the aim of promoting confidence in these areas. Two further bodies forming
part of the FRC are the Professional Oversight Board (POB) and the Audit Practices Board
(APB). Each has a number of stated objectives but they include an oversight and review
function on ethical matters.

Financial Reporting Act -2015 (Bangladesh)

The Bangladesh National Parliament passed the Financial Reporting Act -2015 on September
6, 2015.
The Institute of Chartered Accountants of Bangladesh (ICAB) was the one and only governing
body for the country’s-chartered accountants. From now onwards the Financial Reporting
Council (FRC) of 12 members under the act will ensure accountability and performance among
the chartered accountants of Bangladesh. Moreover, the council will be a statutory body with
members from various government bodies, institutions and professional groups.

The FRC will be the watchdog body in order to monitor the function of auditors and ensure
transparency and accountability in accounting and auditing of financial organizations,
including various government, autonomous and non-government institutions.
The act will monitor both chartered accountants and cost and management accountants of
Bangladesh.

Page# 12
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com