MAA250 Ethics for Financial Professionals Case Study Analysis, 2019

This document presents a comprehensive case study analysis on ethics for financial professionals, addressing specific questions related to ethical codes, banking scandals, and regulatory frameworks. The analysis explores the application of ethical principles and codes of conduct, including APES 110, FASEA, and the Banking Code, within the context of real-world scenarios. The response to question 2 focuses on ethical codes adopted by Trans-Century Resources and the responsibilities of Senior Financial Officers, emphasizing the importance of accurate financial reporting and stakeholder management. The analysis of question 4 examines banking scandals and the need for ethical cultures in financial institutions, highlighting the role of ethical "nudges" and leadership in preventing unethical practices, including a case study of CBA's unethical activities. Finally, the response to question 6 discusses the modifications to the Australian Banking Code of Practice, emphasizing its advantages in protecting customers, small businesses, and ensuring ethical conduct. The assignment demonstrates an understanding of ethical decision-making in finance, drawing on relevant theories and principles to provide a professional analysis of the case study questions.

Running Head: Ethics for financial professionals
Ethics for financial professionals
Name of the Student
Name of the University
Author Note

1Ethics for financial professionals
Table of Contents
Response to question 2...............................................................................................................2
Response to question 4...............................................................................................................3
Response to question 6...............................................................................................................4
References..................................................................................................................................6

2Ethics for financial professionals
Response to question 2
There are certain Code of Ethics which have been adopted by the Board of Directors
of Trans-Century Resources and these are applicable to the Chief Executive Officers of the
company and the Chief Financial Officer of the company. This code makes the Senior
Financial Officer to focus on the areas of ethical risk and it also provide guidance for helping
them to recognize and deal with the ethical issues. It also provides a mechanism for reporting
any unethical conduct, to create a culture of accountability and honesty and to promote a true
and fair disclosure of the financial reporting in accordance with the law (Carr 2020).
There are certain duties which have to be undertaken by The Senior Financial Officers
in order to adhere to an ethical code of high standard. This code normally serves as a source
of guiding principles and the senior Financial Officers are supposed to raise questions about
particular circumstances to the Audit Committee for consulting with the legal counsel with
provisions to this code (Jaijairam 2017). These guidelines include-
 The disclosure of true, fair and accurate financial reports and other filings according
to the Securities and Exchange Commission (SEC) is the responsibility of the Senior
Financial Officers.
 The company policy should comply with the rules and regulations, laws of the
business operations and it is the responsibility of the Senior Financial Officers to see
whether the policy is adhered to the laws and rules.
 It is the duty of the Senior Financial Officer to disclose about the matters which can
affect the ability of the company to prepare the financial data to the Board of
Directors and the Audit Committee.

3Ethics for financial professionals
Therefore, it should be noted that the board of the company is authorized to take appropriate
actions against the Senior Financial Officer for the event of violation of rules and regulations.
Every person associated with the business organization is termed as stakeholders and
different stakeholders have different expectations from the company. It is the duty of the
company managers to balance the claims of every organization and this should be done
ethically. Therefore, there must be equal treatment for every shareholders and managers are
expected to respond to as many stakeholders as possible. However, while prioritizing the
claims of the stakeholders it should keep in mind about the time and resource constraints
(Salvioni, Astori and Cassano 2015).
Response to question 4
There have been a number of scandals in banking sector during and after the financial
crisis of 2008. Therefore, emphasis has been given for creating more ethical cultures in the
financial services. In order to have an ethical culture the banks need to avoid those scandals
which are caused by rogue employees and other scandals like Libor-fixing cases and to solve
these issues the banks need to undertake several steps (Kottasz and Bennett 2016). Normally,
financial institutions recruit people without judging them on the basis of integrity and ethical
behaviour and the institutions are required to build ethical “nudges” into the processes and
procedures of the institutions which can remind the employees as well as the clients for doing
the right thing. The financial institutions are required to apply this code of ethics in the daily
routine work and it is important to realize by the financial institutions that ethical behaviour
needs practice. Hence, the banks are needed to demonstrate as well as reward the ethical
behaviour as a regular activity (Hyvärinen, Risius and Friis 2017). It is the duty of the leaders
to make sure that there should not be any practise of ethical lapses and should reach out to the
employees for the same (Abedin and Arif 2015).

4Ethics for financial professionals
There are number scandals which showcase the unethical practices of CBA and these
incidents are interlinked with each other. Firstly, the financial planners have acted unethically
by placing the savings of elderly retired bankers into products of high-risk investment and
also falsified the documents but there is no evidence of such forged documents. Secondly,
CBA was encouraging unethical behaviours of the financial planners and for this they were
getting paid in the forms of bonuses, commissions and overseas trips since they have met
their sales target by practising fraudulent activities. They have been encouraged for
generating excess sales by adopting these activities otherwise threatened with dismissal for
not meeting the targets. Lastly, in order to cover up for these fraudulent activities the CBA
became aware of the unethical practices which have been performed by the financial planners
and therefore suspended one of its financial planners for a month. However, after a month he
has been promoted to senior financial officer (Franklin 2019).
Thus, it can be said that the second ethical case is the most central issue and it has
been considered as one of the drivers which has triggered the behaviour of the financial
planners and has created an impact on CBA for which the bank is trying to minimise the
damages caused to their reputation (Lukmanjaya 2019).
Response to question 6
The Australian banks have modified the Code of Practise for meeting the expectations
of the community. This code is easier to understand with a clear view and offers large
protections for all the customers of the bank. This banking code has been considered as the
strongest banking code of all times. This is the first banking code that has been approved by
ASIC and this code has strong enforcement and compliance. The alleged breaches of this
code have been investigated by the independent Banking Code Compliance Committee
(BCCC) and it can warn the banks for taking corrective measures in terms of serious

5Ethics for financial professionals
breaches. The Australian Financial Complaints Authority uses this code as a benchmark
across the whole banking industry. This banking code consists of enforceable standards for
the customers, guarantors and small businesses which they can expect from the Australian
banks. As per this banking code, the banks are required to take care of those customers with
special attention who are experiencing vulnerability. There are many advantages of this
banking code, for instances it makes managing of credit cards easier by providing services
like informing the customers about the features of the credit cards, customers can enjoy some
additional benefits which they have never experienced before and this will also allow the
Australian banks for providing many affordable banking products. In terms of the small
businesses this new banking code is serving as a saviour by simplifying the contract of loan
with less conditions, providing of longer notice period during the times of alteration of
conditions of loan and by improving the process of communication and creating great
transparency among the business owners and the insolvency practitioners (Australian
Banking Association. 2020).

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References
Abedin, M.J. and Arif, S., 2015. Sound Corporate Governance and Its Benefits in Financial
Institutions: Does It Really Matter for Organizational Development. International Journal of
Economics, Finance and Management Sciences, 3(5), p.507.
Australian Banking Association., 2020. New Banking Code - Australian Banking Association.
[online] Available at: https://www.ausbanking.org.au/campaigns/new-banking-code/
[Accessed 23 Jan. 2020].
Carr, N., 2020. CEO/CFO Code of Ethics. [online] Sec.gov. Available at:
https://www.sec.gov/Archives/edgar/data/1098469/000109000205000163/tcex14.htm
[Accessed 23 Jan. 2020].
Franklin, J., 2019. Money laundering scandals create opportunities for fintech. International
Financial Law Review.
Hyvärinen, H., Risius, M. and Friis, G., 2017. A blockchain-based approach towards
overcoming financial fraud in public sector services. Business & Information Systems
Engineering, 59(6), pp.441-456.
Jaijairam, P., 2017. Ethics in Accounting. Journal of finance and accountancy, (172705),
pp.1-13.
Kottasz, R. and Bennett, R., 2016. Managing the reputation of the banking industry after the
global financial crisis: Implications of public anger, processing depth and retroactive memory
interference for public recall of events. Journal of Marketing Communications, 22(3),
pp.284-306.

7Ethics for financial professionals
Lukmanjaya, B., 2019. The role of corporate culture as a contributor to fraud and corruption
in Australia: Perceptions of forensic accountants and industry professionals (Doctoral
dissertation, Queensland University of Technology).
Salvioni, D., Astori, R. and Cassano, R., 2015. Corporate sustainability and ethical codes
effectiveness. Available at SSRN 2577393.