i.

Identify and explain THREE situations that are in conflict with the fundamental ethical
principles.
• There is an issue of confidentiality which is a fundamental ethical principle.
The accountant has a professional role to safeguard the security of information
in their possession unless there is a legal or professional right or duty to disclose
which in this case, it was stated that the accountant leaked information to his
friend who was bidding for a contract in the company. Breaches of
confidentiality often occur when information is inadvertently disclosed to
friends and family.
• There is an issue of integrity because it was reported that, the management of
the company connived with officials at the port to undervalue imports in order
to pay lower taxes. this means that they were not honest in their dealings and
reported facts with omission’s. By doing this will result in discrediting the
profession and also the reputation of NTM as an organization.
• There is also the issue of being Objective because the accountant was not
objective in his dealings as there was a conflict of interest. He allowed the
influence of his friend to influence his judgement.

ii. Explain FOUR disadvantages of the CEO acting also as the Chairman of the Board.
• Lack of control of the management of the corporation: The primary role of the board
is to identify and monitor the activities of the company by making sure that the
objective of the company is carried out as it should and the areas that are drifting
from its purpose, appropriate measures will be put together to keep the company
going. The CEO also has a role of being responsible for driving the operations of the
company. So, when the CEO acts as the chair of the board at the same time it results
in an abuse of power as the CEO will be monitoring his/herself.
• Compromises in board decisions:
when there is crisis at the company, the board chair is the one to coordinate
communication between the board and management, but there would be no leader of
 the board with whom to have this communication if the board chair and the CEO
position is occupied by the same person. Shareholders also have a higher degree of
confidence in the board when the CEO and board chair roles are separate.
• Lack of transparency:
If the CEO acts as a board chairman, it presents an opportunity for the individual
serving those roles to hide whatever information they deem fit because they
possessed a strong power which may results in lack of being transparent.

iii. Identify FOUR principal duties of Board of Directors.

• To act within powers.
• To ensure good corporate governance.
• To control abuse of power.
• To give attention to the business of the company.