Learner Guide

12891: Apply concepts and principles of business ethics in the

professional environment

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Learner Guide Introduction
About the Learner This Learner Guide provides a comprehensive overview of the
Guide… Apply concepts and principles of business ethics in the
professional environment, and forms part of a series of Learner
Guides that have been developed for National Certificate:
Business Analysis LEVEL 6- SAQA-63909-149 CREDITS. The series of
Learner Guides are conceptualized in modular format and
developed for National Certificate: Business Analysis LEVEL 6-
SAQA-63909-149 CREDITS. They are designed to improve the skills
and knowledge of learners, and thus enabling them to
effectively and efficiently complete specific tasks. Learners are
required to attend training workshops as a group or as specified
by their organization. These workshops are presented in modules,
and conducted by a qualified facilitator.
Purpose The purpose of this Learner Guide is to provide learners with the
necessary knowledge related to Apply concepts and
principles of business ethics in the professional environment
Outcomes A person credited with this unit standard is able to:
∙ People credited with this unit standard are generally found
throughout professional service environments. On successful
completion of the unit standard, people will be able to
understand and apply the concepts and principles of ethics in
a professional service environment.
Assessment The only way to establish whether a learner is competent and
Criteria has accomplished the specific outcomes is through an
assessment process.
Assessment involves collecting and interpreting evidence about
the
learner’s ability to perform a
task.
This guide may include assessments in the form of activities,
assignments, tasks or projects, as well as workplace practical
tasks. Learners are required to perform tasks on the job to collect
enough and appropriate evidence for their portfolio of
evidence, proof signed by their supervisor that the tasks were
performed successfully.
To qualify To qualify and receive credits towards the learning program, a
registered assessor will conduct an evaluation and assessment of
the learner’s portfolio of evidence and competency

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Range of Learning This describes the situation and circumstance in which
competence must be demonstrated and the parameters in
which learners operate
Responsibility The responsibility of learning rest with the learner, so:
∙ Be proactive and ask questions,
∙ Seek assistance and help from your facilitators, if required.

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11
 1
Learning
Unit Apply concepts
and principles
of business
ethics in the professional
environment
UNIT STANDARD NUMBER : 12891

LEVEL ON THE NQF : 6

CREDITS : 5

FIELD : Physical, Mathematical, Computer and Life Sciences

SUB FIELD : Information Technology and Computer Sciences

PURPOS
E
This unit standard will enable learners to perform enterprise analysis to

meet strategic business needs and goals.

A learner credited with this unit standard will be able to:

Identify business needs and opportunities.

Determine an approach to identifying the most appropriate solution.

Define the solution scope.

Develop the business case.

LEARNING ASSUMED TO BE IN PLACE:

Information gathering techniques at NQF Level 5.

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SESSION 1:
Demonstrate an understanding of the concepts and principles
relating to business ethics
Learning outcome
● 1. The philosophy and framework of ethical conduct is explained in a meaningful

manner

● 2. The corporate code of ethics of a corporation/business entity is described in relation

to general principles of corporate behaviour within the organisation and/or profession

● 3. Codes of professional conduct are explained in accordance with their related

regulations

1.0 Demonstrate an understanding of the concepts and principles relating to business ethics

What is Business Ethics? 

Let's start with "What is ethics?" Simply put, ethics involves learning what is right or wrong, and

then doing the right thing -- but "the right thing" is not nearly as straightforward as conveyed

in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not

simply a matter of "Should Bob steal from Jack?" or "Should Jack lie to his boss?"

So what is "Business Ethics"? The concept has come to mean various things to various

people, but generally it's coming to know what it right or wrong in the workplace and doing

what's right -- this is in regard to effects of products/services and in relationships with

stakeholders. Wallace and Pekel explain that attention to business ethics is critical during

times of fundamental change -- times much like those faced now by businesses, both

nonprofit or for-profit. In times of fundamental change, values that were previously taken for

granted are now strongly questioned. Many of these values are no longer followed.

Consequently, there is no clear moral compass to guide leaders through complex dilemmas

about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and staff

to how they should act. Perhaps most important, attention to ethics in the workplaces helps

ensure that when leaders and managers are struggling in times of crises and confusion, they
retain a strong moral compass. However, attention to business ethics provides numerous

other benefits, as well (these benefits are listed later in this document). 

Note that many people react that business ethics, with its continuing attention to "doing the

right thing," only asserts the obvious ("be good," "don't lie," etc.), and so these people don't

take business ethics seriously. For many of us, these principles of the obvious can go right out

the door during times of stress. Consequently, business ethics can be strong preventative

medicine. Anyway, there are many other benefits of managing ethics in the workplace.

These benefits are explained later in this document. 

Two Broad Areas of Business Ethics 

1. Managerial mischief.  Madsen and Shafritz, in their book "Essentials of Business

Ethics"  (Penguin Books, 1990) further explain that  "managerial mischief" includes "illegal,

unethical, or questionable practices of individual managers or organizations, as well as the

causes of such behaviors and remedies to eradicate them." There has been a great deal

written about managerial mischief, leading many to believe that business ethics is merely a

matter of preaching the basics of what is right and wrong. More often, though, business

ethics is a matter of dealing with dilemmas that have no clear indication of what is right or

wrong. 

2. Moral mazes. The other broad area of business ethics is "moral mazes of management"

and includes the numerous ethical problems that managers must deal with on a daily basis,

such as potential conflicts of interest, wrongful use of resources, mismanagement of

contracts and agreements, etc. 

Business ethics is now a management discipline.  Business ethics has come to be considered

a management discipline, especially since the birth of the social responsibility movement in

the 1960s. In that decade, social awareness movements raised expectations of businesses to

use their massive financial and social influence to address social problems such as poverty,

crime, environmental protection, equal rights, public health and improving education. An

increasing number of people asserted that because businesses were making a profit from

using our country's resources, these businesses owed it to our country to work to improve
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society. Many researchers, business schools and managers have recognized this broader

constituency, and in their planning and operations have replaced the word "stockholder"

with "stakeholder," meaning to include employees, customers, suppliers and the wider

community. 

The emergence of business ethics is similar to other management disciplines. For example,

organizations realized that they needed to manage a more positive image to the public

and so the recent discipline of public relations was born. Organizations realized they needed

to better manage their human resources and so the recent discipline of human resources

was born. As commerce became more complicated and dynamic, organizations realized

they needed more guidance to ensure their dealings supported the common good and did

not harm others -- and so business ethics was born. 

Note that 90% of business schools now provide some form of training in business ethics.

Today, ethics in the workplace can be managed through use of codes of ethics, codes of

conduct, roles of ethicists and ethics committees, policies and procedures, procedures to

resolve ethical dilemmas, ethics training, etc. 

10 Myths About Business Ethics 

Business ethics in the workplace is about prioritizing moral values for the workplace and

ensuring behaviors are aligned with those values -- it's values management. Yet, myths

abound about business ethics. Some of these myths arise from general confusion about the

notion of ethics. Other myths arise from narrow or simplistic views of ethical dilemmas. 

1. Myth: Business ethics is more a matter of religion than management.  Diane Kirrane, in

"Managing Values: A Systematic Approach to Business Ethics,"  (Training and Development

Journal, November 1990), asserts that "altering people's values or souls isn't the aim of an

organizational ethics program -- managing values and conflict among them is ..." 

2. Myth: Our employees are ethical so we don't need attention to business ethics.   Most of

the ethical dilemmas faced by managers in the workplace are highly complex. Wallace

explains that one knows when they have a significant ethical conflict when there is presence

of a) significant value conflicts among differing interests, b) real alternatives that are equality
justifiable, and c) significant consequences on "stakeholders" in the situation. Kirrane

mentions that when the topic of business ethics comes up, people are quick to speak of the

Golden Rule, honesty and courtesy. But when presented with complex ethical dilemmas,

most people realize there's a wide "gray area" when trying to apply ethical principles. 

3. Myth: Business ethics is a discipline best led by philosophers, academics and

theologians.  Lack of involvement of leaders and managers in business ethics literature and

discussions has led many to believe that business ethics is a fad or movement, having little to

do with the day-to-day realities of running an organization. They believe business ethics is

primarily a complex philosophical debate or a religion. However, business ethics is a

management discipline with a programmatic approach that includes several practical

tools. Ethics management programs have practical applications in other areas of

management areas, as well. (These applications are listed later on in this document.)

4. Myth: Business ethics is superfluous -- it only asserts the obvious: "do good!"  Many people

react that codes of ethics, or lists of ethical values to which the organization aspires, are

rather superfluous because they represent values to which everyone should naturally aspire.

However, the value of a codes of ethics to an organization is its priority and focus regarding

certain ethical values in that workplace. For example, it’s obvious that all people should be

honest. However, if an organization is struggling around continuing occasions of deceit in

the workplace, a priority on honesty is very timely -- and honesty should be listed in that

organization’s code of ethics. Note that a code of ethics is an organic instrument that

changes with the needs of society and the organization. 

5. Myth: Business ethics is a matter of the good guys preaching to the bad guys.  Some writers

do seem to claim a moral high ground while lamenting the poor condition of business and its

leaders. However, those people well versed in managing organizations realize that good

people can take bad actions, particularly when stressed or confused. (Stress or confusion

are not excuses for unethical actions -- they are reasons.) Managing ethics in the workplace

includes all of us working together to help each other remain ethical and to work through

confusing and stressful ethical dilemmas. 

6. Myth: Business ethics in the new policeperson on the block.  Many believe business ethics is

a recent phenomenon because of increased attention to the topic in popular and

management literature. However, business ethics was written about even 2,000 years ago --
17
at least since Cicero wrote about the topic in his On Duties.  Business ethics has gotten more

attention recently because of the social responsibility movement that started in the 1960s. 

7. Myth: Ethics can't be managed.  Actually, ethics is always "managed" -- but, too often,

indirectly. For example, the behavior of the organization's founder or current leader is a

strong moral influence, or directive if you will, on behavior or employees in the workplace.

Strategic priorities (profit maximization, expanding marketshare, cutting costs, etc.) can be

very strong influences on morality. Laws, regulations and rules directly influence behaviors to

be more ethical, usually in a manner that improves the general good and/or minimizes harm

to the community. Some are still skeptical about business ethics, believing you can't manage

values in an organization. Donaldson and Davis (Management Decision,  V28, N6) note that

management, after all, is a value system. Skeptics might consider the tremendous influence

of several "codes of ethics," such as the "10 Commandments" in Christian religions or the U.S.

Constitution. Codes can be very powerful in smaller "organizations" as well. 

8. Myth: Business ethics and social responsibility are the same thing.  The social responsibility

movement is one aspect of the overall discipline of business ethics. Madsen and Shafritz

refine the definition of business ethics to be: 1) an application of ethics to the corporate

community, 2) a way to determine responsibility in business dealings, 3) the identification of

important business and social issues, and 4) a critique of business. Items 3 and 4 are often

matters of social responsibility. (There has been a great deal of public discussion and writing

about items 3 and 4. However, there needs to be more written about items 1 and 2, about

how business ethics can be managed.) Writings about social responsibility often do not

address practical matters of managing ethics in the workplace, e.g., developing codes,

updating polices and procedures, approaches to resolving ethical dilemmas, etc. 

9. Myth: Our organization is not in trouble with the law, so we're ethical.  One can often be

unethical, yet operate within the limits of the law, e.g., withhold information from superiors,

fudge on budgets, constantly complain about others, etc. However, breaking the law often

starts with unethical behavior that has gone unnoticed. The "boil the frog" phenomena is a

useful parable here: If you put a frog in hot water, it immediately jumps out. If you put a frog

in cool water and slowly heat up the water, you can eventually boil the frog. The frog

doesn't seem to notice the adverse change in its environment. 

10. Myth: Managing ethics in the workplace has little practical relevance.  Managing ethics
in the workplace involves identifying and prioritizing values to guide behaviors in the

organization, and establishing associated policies and procedures to ensure those behaviors

are conducted. One might call this "values management." Values management is also

highly important in other management practices, e.g., managing diversity, Total Quality

Management and strategic planning. 

1.1 The philosophy and framework of ethical conduct is explained in a meaningful

manner

Ethics are the moral principles and values that govern the actions and decisions of an

individual or group.

They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.

Ethical/Legal Framework in Marketing

Ethics deal with personal moral principles and values.

Laws are society's values and standards that are enforceable in the courts.

There are numerous situations where judgment plays a large role in defining ethical and

legal boundaries.

Actions that are technically legal could be viewed as unethical

Actions considered to be ethical may not be seen as legal.

There are at least four possible reasons the state of perceived business ethical conduct is at

its present level:

Increased pressure on businesspeople to make decisions in a society characterized by

diverse value systems.

Growing tendency for business decisions to be judged publicly by groups with different

values and interests.

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The public's expectations of business ethical behavior has increased.

Ethical business conduct may have declined.

What is ethics?

At its simplest, ethics is a system of moral principles. They affect how people make decisions

and lead their lives.

Ethics is concerned with what is good for individuals and society and is also described as

moral philosophy.

The term is derived from the Greek word ethos which can mean custom, habit, character or

disposition.

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?

Our concepts of ethics have been derived from religions, philosophies and cultures. They

infuse debates on topics like abortion, human rights and professional conduct.

Approaches to ethics

Philosophers nowadays tend to divide ethical theories into three areas: metaethics,

normative ethics and applied ethics.

● Meta-ethics deals with the nature of moral judgement. It looks at the origins and

meaning of ethical principles.

● Normative ethics is concerned with the content of moral judgements and the criteria

for what is right or wrong.

 ● Applied ethics looks at controversial topics like war, animal rights and capital

punishment

What use is ethics?

Ethics needs to provide answers.

If ethical theories are to be useful in practice, they need to affect the way human beings

behave.

Some philosophers think that ethics does do this. They argue that if a person realises that it

would be morally good to do something then it would be irrational for that person not to do

it.

But human beings often behave irrationally - they follow their 'gut instinct' even when their

head suggests a different course of action.

However, ethics does provide good tools for thinking about moral issues.

Ethics can provide a moral map

Most moral issues get us pretty worked up - think of abortion and euthanasia for starters.

Because these are such emotional issues we often let our hearts do the arguing while our

brains just go with the flow.

But there's another way of tackling these issues, and that's where philosophers can come in -

they offer us ethical rules and principles that enable us to take a cooler view of moral

problems.

So ethics provides us with a moral map, a framework that we can use to find our way

through difficult issues.

Ethics can pinpoint a disagreement

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Using the framework of ethics, two people who are arguing a moral issue can often find that

what they disagree about is just one particular part of the issue, and that they broadly agree

on everything else.

That can take a lot of heat out of the argument, and sometimes even hint at a way for them

to resolve their problem.

But sometimes ethics doesn't provide people with the sort of help that they really want.

Ethics doesn't give right answers

Ethics doesn't always show the right answer to moral problems.

Indeed more and more people think that for many ethical issues there isn't a single right

answer - just a set of principles that can be applied to particular cases to give those involved

some clear choices.

Some philosophers go further and say that all ethics can do is eliminate confusion and clarify

the issues. After that it's up to each individual to come to their own conclusions.

Ethics can give several answers

Many people want there to be a single right answer to ethical questions. They find moral

ambiguity hard to live with because they genuinely want to do the 'right' thing, and even if

they can't work out what that right thing is, they like the idea that 'somewhere' there is one

right answer.

But often there isn't one right answer - there may be several right answers, or just some least

worst answers - and the individual must choose between them.

For others moral ambiguity is difficult because it forces them to take responsibility for their

own choices and actions, rather than falling back on convenient rules and customs.

Where does ethics come from?

Philosophers have several answers to this question:

● God and religion

 ● Human conscience and intuition

● a rational moral cost-benefit analysis of actions and their effects

● the example of good human beings

● a desire for the best for people in each unique situation

● political power

God-based ethics - supernaturalism

Supernaturalism makes ethics inseparable from religion. It teaches that the only source of

moral rules is God.

So, something is good because God says it is, and the way to lead a good life is to do what

God wants.

Intuitionism

Intuitionists think that good and bad are real objective properties that can't be broken down

into component parts. Something is good because it's good; its goodness doesn't need

justifying or proving.

Intuitionists think that goodness or badness can be detected by adults - they say that human

beings have an intuitive moral sense that enables them to detect real moral truths.

They think that basic moral truths of what is good and bad are self-evident to a person who

directs their mind towards moral issues.

So good things are the things that a sensible person realises are good if they spend some

time pondering the subject.

Don't get confused. For the intuitionist:

● moral truths are not discovered by rational argument

● moral truths are not discovered by having a hunch

● moral truths are not discovered by having a feeling

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It's more a sort of moral 'aha' moment - a realisation of the truth.

Consequentialism

This is the ethical theory that most non-religious people think they use every day. It bases

morality on the consequences of human actions and not on the actions themselves.

Consequentialism teaches that people should do whatever produces the greatest amount

of good consequences.

One famous way of putting this is 'the greatest good for the greatest number of people'.

The most common forms of consequentialism are the various versions of utilitarianism, which

favour actions that produce the greatest amount of happiness.

Despite its obvious common-sense appeal, consequentialism turns out to be a complicated

theory, and doesn't provide a complete solution to all ethical problems.

Two problems with consequentialism are:

● it can lead to the conclusion that some quite dreadful acts are good

● predicting and evaluating the consequences of actions is often very difficult

Non-consequentialism or deontological ethics

Non-consequentialism is concerned with the actions themselves and not with the

consequences. It's the theory that people are using when they refer to "the principle of the

thing".

It teaches that some acts are right or wrong in themselves, whatever the consequences,

and people should act accordingly.

Virtue ethics

Virtue ethics looks at virtue or moral character, rather than at ethical duties and rules, or the

consequences of actions - indeed some philosophers of this school deny that there can be

such things as universal ethical rules.

Virtue ethics is particularly concerned with the way individuals live their lives, and less

concerned in assessing particular actions.

It develops the idea of good actions by looking at the way virtuous people express their

inner goodness in the things that they do.

To put it very simply, virtue ethics teaches that an action is right if and only if it is an action

that a virtuous person would do in the same circumstances, and that a virtuous person is

someone who has a particularly good character.

Situation ethics

Situation ethics rejects prescriptive rules and argues that individual ethical decisions should

be made according to the unique situation.

Rather than following rules the decision maker should follow a desire to seek the best for the

people involved. There are no moral rules or rights - each case is unique and deserves a

unique solution.

Ethics and ideology

Some philosophers teach that ethics is the codification of political ideology, and that the

function of ethics is to state, enforce and preserve particular political beliefs.

They usually go on to say that ethics is used by the dominant political elite as a tool to

control everyone else.

More cynical writers suggest that power elites enforce an ethical code on other people that

helps them control those people, but do not apply this code to their own behaviour.

1.2 The corporate code of ethics of a corporation/business entity is described in relation to

general principles of corporate behaviour within the organisation and/or profession

 Introduction

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This Code of Ethics and Business Conduct (sometimes referred to herein as the “Code”) is

written to ensure directors, officers, employees and consultants (collectively “Employees”) of

the Corporation and its subsidiaries understand the importance the Corporation places on

ethical conduct and recognize that it forms an important part of who we are as individuals

and as a company. Similarly, it helps our security holders, customers, suppliers and

competitors know what to expect from the Corporation. And, it is meant to help employees

recognize and deal with

ethical dilemmas they may encounter.

Ethics

Ethics are set of principles or rules of conduct to help distinguish right and wrong. Ethics are

about values and associated behaviours. In practical terms, this Code of Ethics and Business

Conduct outlines the manner in which we choose to do business and reflects the beliefs,

priorities and principles that we uphold. The Corporation requires that all employees will

respect and promote these principles and exercise good judgment that reinforces the

Corporation as a company that is fair, honest and just in its dealings with security holders,

investors, customers,

suppliers and competitors.

Responsibility and Accountability

Responsibility is a measure of every person’s ability to act independently and make

decisions. Regardless of an employee’s role in the Corporation and no matter how big or

small the decisions to be made are, each employee is accountable for them and must be

prepared to defend his or her judgment. This Code of Ethics and Business Conduct is

intended to help employees make appropriate decisions under difficult circumstances. This

Code is designed to help an employee make decisions that are appropriate for the

circumstance, while upholding his or her integrity and

reputation and that of the Corporation. No set of guidelines or rules can anticipate every

possible circumstance. Employees should seek help in making a tough choice by first talking

to your supervisor. If your supervisor cannot answer the question or if you do not feel

comfortable speaking to your supervisor on the matter, please contact the Audit and
Compensation Committee designate who is responsible for

receiving complaints or concerns. Please refer to the Whistle Blower Policy and Procedures

for instructions on how to contact the Audit and Compensation Committee designate. In

addition, the Protection of Whistle Blowers will apply.

Reporting Violations of the Code

All employees have a duty to report any known or suspected violation of this Code,

including any violation of the laws, rules, regulations or policies that apply to the

Corporation. If you know of or suspect a violation of this Code, immediately report the

conduct to your supervisor. The supervisor will contact the Audit and Compensation

Committee designate, who will work with you and your supervisor to investigate your

concern. If you do not feel comfortable reporting the conduct to your supervisor or you do

not get a satisfactory response, you may contact the Audit

and Compensation Committee designate directly by following the procedures set out in the

Whistle Blower Policy and Procedures. All reports of known or suspected violations of the law

or this Code will be handled sensitively and with discretion. Your supervisor, the Audit and

Compensation Committee designate and the Corporation will protect your confidentiality to

the extent possible, consistent with applicable law and the Corporation’s need to

investigate your

concern.

Compliance with Laws, Rules and Regulations

Each employee has an obligation to comply with all applicable laws, rules and regulations

of the locations where the Corporation does business. These include, without limitation, laws

covering bribery and kickbacks, copyrights, trademarks and trade secrets, information

privacy, insider trading, illegal political contributions, antitrust prohibitions, foreign corrupt

practices, offering or receiving gratuities, environmental hazards, employment discrimination

or harassment, occupational health and safety, false or misleading financial information or

misuse of corporate

assets. Without limitation, each employee is expected to understand and comply with all

laws, rules and regulations that apply to his or her job description. No employee of the

27
Corporation has the authority to violate any law or to direct another person to violate any

law on behalf of the Corporation. If any doubt exists about whether a course of action is

lawful or in compliance with this Code, you should seek advice from your supervisor or the

Audit and Compensation Committee designate. Employees are advised to read and

become familiar with the terms of the Corporation’s Disclosure (Communications) Policy.

Confidentiality

Employees must preserve and protect the confidentiality of information entrusted to them by

the Corporation or its customers and suppliers and which they come into contact with in

their employ, except when disclosing information which is expressly approved by an

employee of the Corporation with authority to give such approval, including if legally

mandated. Confidential information encompasses proprietary information which is not in the

public domain that could be of use to competitors, or that could harm the Corporation, its

employees, its customers or suppliers if disclosed. Employees must also not use or disclose to

the Corporation any proprietary information or trade secrets of any former employer or other

person or entity with whom obligations of confidentiality exist. Similarly, an employee’s

obligation to protect confidential information continues after he or she leaves the

Corporation.

1.3 Codes of professional conduct are explained in accordance with their related

regulations

What is Professional Ethics?

Professional Ethics concerns one's conduct of behaviour and practice when carrying out

professional work. Such work may include consulting, researching, teaching and writing. The

institutionalisation of Codes of Conduct and Codes of Practice is common with many

professional bodies for their members to observe.

Any code may be considered to be a formalisation of experience into a set of rules. A code

is adopted by a community because its members accept the adherence to these rules,

including the restrictions that apply.

It must be noted that there is a distinction between a profession such as Information Systems,

and controlled professions such as Medicine and Law, where the loss of membership may

also imply the loss of the right to practice.

Apart from codes of ethics, professional ethics also concerns matters such as professional

indemnity. Furthermore, as will readily be appreciated, no two codes of ethics are identical.

They vary by cultural group, by profession and by discipline. The former of these three

variations is one of the most interesting, as well as controversial, since it challenges the

assumption that universal ethical principles exist. In some cultures, certain behaviours are

certainly frowned upon, but in other cultures the opposite may be true. Software piracy is a

good case in point, in that attitudes towards software piracy vary from strong opposition to

strong support - attitudes that are supportable within a particular culture. At the end of these

pages is a section called Cultural Perspectives, where we hope to point you to alternative

perspectives of ethical standards, attitudes and behaviours..

Software Engineering Code of Ethics and Professional Practice

PREAMBLE

Computers have a central and growing role in commerce, industry, government, medicine,

education, entertainment and society at large. Software engineers are those who contribute

by direct participation or by teaching, to the analysis, specification, design, development,

certification, maintenance and testing of software systems. Because of their roles in

developing software systems, software engineers have significant opportunities to do good

or cause harm, to enable others to do good or cause harm, or to influence others to do

good or cause harm. To ensure, as much as possible, that their efforts will be used for good,

software engineers must commit themselves to making software engineering a beneficial

and respected profession. In accordance with that commitment, software engineers shall

adhere to the following Code of Ethics and Professional Practice.

The Code contains eight Principles related to the behavior of and decisions made by

professional software engineers, including practitioners, educators, managers, supervisors

29
and policy makers, as well as trainees and students of the profession. The Principles identify

the ethically responsible relationships in which individuals, groups, and organizations

participate and the primary obligations within these relationships. The Clauses of each

Principle are illustrations of some of the obligations included in these relationships. These

obligations are founded in the software engineer’s humanity, in special care owed to

people affected by the work of software engineers, and the unique elements of the

practice of software engineering. The Code prescribes these as obligations of anyone

claiming to be or aspiring to be a software engineer.

It is not intended that the individual parts of the Code be used in isolation to justify errors of

omission or commission. The list of Principles and Clauses is not exhaustive. The Clauses should

not be read as separating the acceptable from the unacceptable in professional conduct

in all practical situations. The Code is not a simple ethical algorithm that generates ethical

decisions. In some situations standards may be in tension with each other or with standards

from other sources. These situations require the software engineer to use ethical judgment to

act in a manner which is most consistent with the spirit of the Code of Ethics and Professional

Practice, given the circumstances.

Ethical tensions can best be addressed by thoughtful consideration of fundamental

principles, rather than blind reliance on detailed regulations. These Principles should

influence software engineers to consider broadly who is affected by their work; to examine if

they and their colleagues are treating other human beings with due respect; to consider

how the public, if reasonably well informed, would view their decisions; to analyze how the

least empowered will be affected by their decisions; and to consider whether their acts

would be judged worthy of the ideal professional working as a software engineer. In all these

judgments concern for the health, safety and welfare of the public is primary; that is, the

"Public Interest" is central to this Code.

The dynamic and demanding context of software engineering requires a code that is

adaptable and relevant to new situations as they occur. However, even in this generality,

the Code provides support for software engineers and managers of software engineers who

need to take positive action in a specific case by documenting the ethical stance of the
profession. The Code provides an ethical foundation to which individuals within teams and

the team as a whole can appeal. The Code helps to define those actions that are ethically

improper to request of a software engineer or teams of software engineers.

The Code is not simply for adjudicating the nature of questionable acts; it also has an

important educational function. As this Code expresses the consensus of the profession on

ethical issues, it is a means to educate both the public and aspiring professionals about the

ethical obligations of all software engineers

What Does the Code and Standards Cover?

The Code of Ethics maintains that you must:

● Place the integrity of the profession and the interests of clients above your own
interests

● Act with integrity, competence, and respect

● Maintain and develop your professional competence

The Standards of Professional Conduct cover:

● Professionalism and integrity of the capital markets

● Duties to clients and employers

● Investment analysis and recommendations

● Conflicts of interest and your responsibilities

Professional conduct is the field of regulation of members of professional bodies, either

acting under statutory or contractual powers.

Historically, professional conduct was wholly undertaken by the private professional bodies,

the sole legal authority for which was of a contractual nature. These bodies commonly

established codes of conduct and ethical codes for the guidance of their members.

List codes of professional conduct

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SESSION 2:
Exercise professional judgement with regard to practical situations.
Learning outcome
● 1. Practical situations are analysed to enable the practitioner to make professional

judgements in relation to the applicable code of professional conduct

● 2. Professional judgement is applied to practical situations in accordance with the

applicable code of professional conduct

● 3. Professional judgement is exercised in line with the organisational code of ethics

2.0 Meaning of professional judgment and its application in an audit environment

Defining Professional Judgment

Professional judgment is a process used to reach a well-reasoned conclusion that is based

on the relevant facts and circumstances available at the time of the conclusion. A

fundamental part of the process is the involvement of individuals with sufficient knowledge

and experience. Professional judgment involves the identification, without bias, of

reasonable alternatives; therefore, careful and objective consideration of information that

may seem contradictory to a conclusion is key to its application. In addition, both

professional skepticism and objectivity are essential to the process and to reaching an

appropriate conclusion.

Professional judgment is not an arbitrary decision, a substitute for professional skepticism, or a

method to rationalize a particular result. Performing the process in “form” without focusing

on the substance does not constitute well-reasoned professional judgment.

Professional judgment is critical to efficiently and effectively planning, performing, and

concluding in an audit. Auditors use professional judgment to focus on the most important

aspects of an audit; to determine the nature, timing, and extent of audit procedures; and to

appropriately challenge the accounting, reporting, and other conclusions reached and

financial statement assertions made by management.

Applying Professional Judgment

Because of the nature of the auditor’s professional responsibilities and the regulatory

environment, the auditor’s judgments will most likely be challenged. Knowledgeable,

experienced, and objective persons can reach different conclusions in applying professional

standards despite similar facts and circumstances. This does not necessarily mean that one

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conclusion is right and the other is wrong. Appropriate questioning to understand the

procedures performed and basis for conclusions reached is to be expected.   

Contemporaneous documentation of professional judgments is important. Documentation

demonstrates that a sound process was followed and helps the development of a well-

reasoned conclusion. When professional judgment is challenged, contemporaneous

documentation shows the analysis of the facts, circumstances, and alternatives considered

as well as the basis for the conclusions reached. The extent of documentation and the effort

expended in the process will vary with the significance and complexity of an issue.

When the professional judgment process is appropriately applied and contemporaneously

documented, it is much easier to support and defend the conclusions reached. Conversely,

decisions that appear to be arbitrary; not supported by the facts, evidence, or professional

literature; or not well-reasoned or documented are difficult to support.  

The sample framework that follows is an example of a common sense approach to reaching

judgments based loosely on the work of the Advisory Committee on Improvements to

Financial Reporting.  It certainly is not the only approach to applying professional judgment,

as there are multiple paths to reaching appropriate decisions and judgments.

Considerations When Applying Professional Judgment

IDENTIFY ISSUE: Identify the accounting or auditing issue requiring the use of professional

judgment. Consider the following:

● Has the issue been sufficiently framed?

● Are there any related issues that need to be considered in the process?

GATHER THE FACTS: Objectively obtain a thorough understanding of the relevant facts and

information available concerning the transaction, event, or situation. Consider the following:

● Have source documents and other materials been examined, knowledgeable client

personnel interviewed, and other available sources of information considered?

 ● Were the appropriateness and reliability of the assumptions and data to be used in

the analysis of the transaction or situation sufficiently assessed, tested, and objectively

challenged by obtaining sufficient competent evidence?

REVIEW RELEVANT LITERATURE: Identify the accounting or auditing literature (or other

standards and rules) relevant to the issue, keeping in mind the various authoritative

pronouncements in the GAAP hierarchy and the different sources of professional auditing

and attestation pronouncements. Consider the following:

● Has the relevant accounting or auditing standard been identified and reviewed,

recognizing that reference to more than one authority may be appropriate to

address the issue?

● Have the underlying principles in the relevant accounting or auditing literature been

considered?

● To the extent that one particular authority does not address the issue directly, have

other pronouncements or literature, by analogy, been considered as appropriate?

ANALYZE ISSUE: Apply the applicable accounting or auditing literature to the relevant facts

and other information concerning the transaction, event, or situation and assess the most

appropriate accounting treatment or auditing approach under the circumstances. Consider

the following:

● Do the individuals addressing the issue have sufficient knowledge, experience, and

objectivity for the matter being evaluated?

● Do additional resources need to be involved in addressing the issue?

● Have the reasonable alternatives been identified?

● Have the reasonable alternatives been analyzed, including the pros and cons of

each alternative? For example, has all evidence been considered, including

potentially contradictory evidence, and whether any negative evidence was

outweighed by positive evidence?

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 ● Has preferability or diversity in practice been considered?

● Has the business purpose and the form and substance of the transaction been

analyzed?

● Have the audit risks and potential responses to those risks been analyzed? For

example, if assessing the inherent risk of material misstatement of an account

balance or assertion have the potential errors relevant to the account and the factors

that could reasonably increase the likelihood of a material misstatement (by error or

fraud) been analyzed?

● Has consideration been given as to whether the treatment that results from applying

the relevant literature has been applied consistently to similar transactions, events, or

situations?

Outline how to exercise professional judgement with regard to practical situations.

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SESSION 3:
Use ethical procedures in a professional environment
Learning outcomes
● 1. Ethical procedures are used in the professional environment that comply with the

code of professional conduct

● 2. Situations are evaluated to judge the professional intervention and procedure that are

most appropriate

● 3. Procedures are developed and implemented, where necessary, in accordance with

organisational and professional ethics

What do we mean by work-place ethics?

One of the most important responsibilities that we place on the leaders of organizations is

upholding the highest standards of ethical behavior.  In a nutshell, this comes down to doing

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the right thing even when the wrong thing might also have some attraction.  Work-place

ethics are most often related to decision-making processes.  Most leaders face the

opportunity to choose between alternative courses of action in their work situations and

other aspects of their lives. Work-place ethics refer to choosing the option that is determined

to be the moral or legal “right” choice, even if the other alternative(s) are very attractive

and even if you can “get away with” the less ethical choice.  

Why is it important to exercise work-place ethics?

Leaders are often put in decisions where they must choose among options that vary in their

degree of ethical behavior.  One of the reasons why this is a common issue for leaders is that

there are often competing priorities for businesses 1.  On the one hand, organizations exist to

generate profits for their shareholders, which may encourage leaders to act in ways that are

less ethical in order to cut costs or increase revenues.  On the other hand, organizations are

made up of human beings who are personally invested in the company and often live in the

communities in which they work.  If the individuals are harmed by decisions that maximize

company profitability, then the decision is not an ethical one.  Only one stakeholder is

getting their needs met, at the expense of other stakeholders.  

According to one theory, leaders may make bad ethical decisions and rationalize these

decisions2:  For example, a leader may tell themselves it is not really illegal or immoral, or

perhaps that it will never be found out or that their bad behavior will be rewarded. 

How do I make sure my decisions are ethical?

If you are worried about how a decision will impact others or how others will perceive your

decision, then chances are ethics are a consideration.  You might start by asking yourself

some questions3:

1. How would you define the problem if you stood on the other side of the fence?

2. What is your intention in making this decision?

3. Whom could your decision or action injure?

 4. Are you confident that your position will be as valid over a long period of time as it

seems now?

5. Could you disclose without qualm your decision or action to your boss, your CEO, the

board of directors, your family, society as a whole?

Some basic principles to help you make ethical decisions

A key reason why decisions that have ethical implications may be difficult for leaders to

make is that they may be encountering situations that they have never had to deal with

before.  This lack of experience may be characterized by a great deal of ambiguity in terms

of what to do.  Some basic principles may be useful in helping to guide the ethical decision-

making process:

1.Don’t allow personal gains to outweigh the good of the organization

2.Recognize all perspectives when making an ethical decision

3.Respect people and their rights

4.Keep promises and honor contracts

5.Use feelings to help decide morale dilemmas

6.Get all the facts

7.Treat all people fairly

8.Define who you are, your company & personal values

9.Always challenge your decision to be in line with your values, beliefs and morals

10.  Never compromise your integrity

11.  Ethical decisions must use fair procedures and account for unjust action

12.  Don’t choose the easiest answer; consider all the options (don’t just go for a quick fix)

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13.  Don’t overstep the bounds of what outsiders will tolerate while balancing company’s &

outsider’s interest

14.  Consider the risk of setting & trying to achieve overly ambitious goals

15.  Communicate that all employees have a responsibility to keep the company’s moral &

ethical standards in check

16.  When in doubt, don’t

17.  Instill proper checks & balances of  ethical behavior that don’t create bottlenecks

18.  When possible seek the input of effected individuals at a moral crossroads

Abraham Lincoln described character as the tree and reputation as the shadow. Your

character is what you really are; your reputation is what people think of you. Thus, your

reputation is purely a function of perceptions (i.e., do people think your intentions and

actions are honorable and ethical) .while your character is determined and defined by your

actions (i.e., whether your actions are honorable and ethical according to the 12 ethical

principles:

1. HONESTY. Be honest in all communications and actions. Ethical executives are, above all,

worthy of trust and honesty is the cornerstone of trust.  They are not only truthful, they are

candid and forthright. Ethical executives do not deliberately mislead or deceive others by

misrepresentations, overstatements, partial truths, selective omissions, or any other means

and when trust requires it they supply relevant information and correct misapprehensions of

fact.

2. INTEGRITY. Maintain personal integrity. Ethical executives earn the trust of others through

personal integrity. Integrity refers to a wholeness of character demonstrated by consistency

between thoughts, words and actions. Maintaining integrity often requires moral courage,

the inner strength to do the right thing  even when it may cost more than they want to pay.

The live by ethical principles despite great pressure to do otherwise. Ethical executives are
principled, honorable, upright and scrupulous. They fight for their beliefs and do not sacrifice

principle for expediency.

3. PROMISE-KEEPING. Keep promises and fulfill commitments. Ethical executives can be

trusted because they make every reasonable effort to fulfill the letter and spirit of

their promises and commitments. They do not interpret agreements in an unreasonably

technical or legalistic manner in order to rationalize non-compliance or create justifications

for escaping their commitments.

4. LOYALTY.  Be loyal within the framework of other ethical principles. Ethical executives justify

trust by being loyal to their organization and the people they work with. Ethical executives

place a high value on protecting and advancing the lawful and legitimate interests of their

companies and their colleagues. They do not, however, put their loyalty above other ethical

principles or use loyalty to others as an excuse for unprincipled conduct.  Ethical executives

demonstrate loyalty by safeguarding their ability to make independent professional

judgments. They avoid conflicts of interest and they do not use or disclose information

learned in confidence for personal advantage.  If they decide to accept other

employment, ethical executives provide reasonable notice, respect the proprietary

information of their former employer, and refuse to engage in any activities that take undue

advantage of their previous positions.

5. FAIRNESS. Strive to be fair and just in all dealings. Ethical executives are fundamentally

committed to fairness.  They do not exercise power arbitrarily nor do they use overreaching

or indecent means to gain or maintain any advantage nor take undue advantage of

another’s mistakes or difficulties. Ethical executives manifest a commitment to justice, the

equal treatment of individuals, tolerance for and acceptance of diversity. They are open-

minded; willing to admit they are wrong and, where appropriate, they change their positions

and beliefs.

6. CARING. Demonstrate compassion and a genuine concern for the well-being   of

others. Ethical executives are caring, compassionate, benevolent and kind. They understand

the concept of stakeholders (those who have a stake in a decision because they are

affected by it) and they  always consider the business, financial and emotional

41
consequences of their actions on all stakeholders. Ethical executives seek to accomplish

their business objectives in a manner that causes the least harm and the greatest positive

good.

7. RESPECT FOR OTHERS. Treat everyone with respect.  Ethical executives demonstrate respect

for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake

in their decisions; they are courteous and treat all people with equal respect and dignity

regardless of sex, race or national origin. Ethical executives adhere to the Golden Rule,

striving to treat others the way they would like to be treated.

8. LAW ABIDING. Obey the law.  Ethical executives abide by laws, rules and regulations

relating to their business activities.

9. COMMITMENT TO EXCELLENCE. Pursue excellence all the time in all things.  Ethical

executives pursue excellence in performing their duties, are well-informed and prepared,

and constantly endeavor to increase their proficiency in all areas of responsibility.

10. LEADERSHIP. Exemplify honor and ethics.  Ethical executives are conscious of the

responsibilities and opportunities of their position of leadership and seek to be positive

ethical role models by their own conduct and by helping to create an environment in which

principled reasoning and ethical decision making are highly prized.

11. REPUTATION AND MORALE. Build and  protect and build the company’s good reputation

and the morale of it’s employees.  Ethical executives understand the importance of their

own and their company’s reputation as well as the importance of the pride and good

morale of employees. Thus, they avoid words or actions that that might undermine respect

and they take affirmative steps  to correct or prevent inappropriate conduct of others.

12. ACCOUNTABILITY. Be accountable. Ethical executives acknowledge and accept

personal accountability for the ethical quality of their decisions and omissions to themselves,

their colleagues, their companies, and their communities.