Report on Professional Ethics in Finance: HSBC Bank PLC

This report delves into the realm of professional ethics within the finance sector, using HSBC Bank PLC as a case study. It meticulously examines the fundamental principles of ethical behavior, including integrity, objectivity, and confidentiality, and explores the legal, regulatory, and ethical requirements that govern the industry. The report highlights the role of professional bodies in promoting ethical conduct and discusses the importance of operating within a code of conduct and practice. It also addresses the risks associated with improper practices, the significance of maintaining up-to-date knowledge, and strategies for ethical client, supplier, and colleague interactions. Furthermore, the report emphasizes the need for objectivity, adherence to organizational values, and proper handling of confidential information. It covers procedures for addressing unethical behavior, reporting incompetence, and preventing ethical conflicts, culminating in a discussion of the importance of an ethical approach to sustainability within the finance profession.

Professional Ethics

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Fundamental principles of ethical behaviour...................................................................4
1.2 Legal, regulatory and ethical requirements that affect accounting and finance sector....5
1.3 Role of professional bodies in relation to accounting and finance sector........................5
1.4 Reason about expectation to operate business within code of conduct and practice.......6
1.5 Risk of improper practice within an organisation and importance of vigilance...............6
1.6 Opportunities for maintaining an up-to-date knowledge of changes...............................7
TASK 2............................................................................................................................................7
2.1 Way to work ethically when working with clients, suppliers, colleagues and others......7
2.2 Importance of objectivity and maintaining a professional distance between professional
responsibilities and personal life............................................................................................7
2.3 Importance of adhering to organisational and professional values, codes of practice and
regulations..............................................................................................................................8
2.4 Importance of adhering to organisational policies to handle clients money....................8
2.5 Circumstances when confidential information should be disclosed ................................8
2.6 Importance of working within limits and confines of own professional experience,
knowledge and expertise........................................................................................................9
TASK 3............................................................................................................................................9
3.1 Relevant authorities and internal departments to which unethical behaviour, breaches of
confidentiality.........................................................................................................................9
3.2 Action to take in instances when requests for work are beyond the employee’s competence
................................................................................................................................................9
3.3 How to report inappropriate behaviour of client............................................................10
3.4 Internal and external procedures to be followed for stopping illegal and unethical practices
..............................................................................................................................................10
3.5 Strategies used to prevent ethical conflicts....................................................................11
TASK 4..........................................................................................................................................11
4.1 Importance of an ethical approach to sustainability.......................................................11

4.2 Responsibilities of finance professionals in upholding the principles of sustainability.11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
INTRODUCTION
Professional ethics are the principles that regulate the behaviour of a person or a group in
a business environment. This provide rules on how a person should act towards other people and
institutions in such environment. People associated with organisations should behave ethically

when dealing with internal and external clients. The present report is based upon HSBC Bank
PLC, which is one of the largest financial and banking sector organisation of the world. The
report is focussed on the concept of ethical principles which are needed to be followed by
individuals dealing in organisations (Baase, 2012) . The main aim of this unit is to describe
importance of working within ethical code which in context with accounting and finance
professionals. Along with this, the ethical behaviour that is required to be maintained when
working with internal and external customers is discussed. Furthermore, the ethical responsibility
of finances professional is discussed in relation to promotion of sustainability.
TASK 1
1.1 Fundamental principles of ethical behaviour
Ethics is a branch of philosophy dealing with what is morally right or wrong. Code of
ethics referred as main aspects to control behaviour of professionals who are associated with an
organisation (Fundamental principles of ethical behaviour, 2016). In banking and financial
sector, a professional is required to follow certain principles which regulate their ethical
behaviour in business environment, these are mentioned below - Integrity – A professional should be honest and having strong moral principles, or moral
uprightness. It is a personal choice to hold one's self to consistent standards. In
ethics, this is regarded as the honesty and truthfulness or accuracy of one's actions. Objectivity - A professional must be unbiased towards an activity or situation.
Professionals in finance sector especially auditors must avoid conflicts of interest as
failure to remain independent and objective sometime hamper their status (Cheng, 2012) .
Therefore, they must follow ethical values of objectivity and independence. Professional and technical competence and due care - Professionals are required to act
patiently and possess such skills and knowledge that makes sure that the clients get
competent professional services which are based on the present developments in
legislation and practice. Professional behaviour - A professional is required to comply certain laws and
regulations appointed by government or other legal bodies while conducting operations
and avoid any act that defames their professional ethics.

 Confidentiality - This is the responsibility of Professionals to keep financial and personal
information of clients and business in confidential manner which must not be disclosed
without proper authority (Banks, 2012) .
1.2 Legal, regulatory and ethical requirements that affect accounting and finance sector
In each and every sector, it is essential to follow the ethics, legal and rules. The strong
regulatory and legal foundation is helpful in providing the growth of accountancy profession.
Ethical, legal and regulatory requirement are helpful in conducting business in an effective
manner. In context to accounting and finance sector, in regulations there is more demand on
amount of tax. In order to perform roles and responsibilities in appropriate manner, it is
necessary for accountant to have knowledge about those factors which affect accounting and
finance sector. This includes - Code of Practice - This is concerned with the values and beliefs of the organisation in
relation to the manner in which professionals conduct any activity in this sector. Every
organisation has set some specific set of ethical code of practices which incorporate with
professional values and principles. Compliance – In finance sector it is important for the professionals especially auditors to
perform business activities of finance sector without compromising with legal authority.
 Laws - It includes both civil and criminal law which states that certain activities of
business are acceptable as minimum standard but viewed as unethical also.
1.3 Role of professional bodies in relation to accounting and finance sector
In accounting and finance sector, every organisation used to set ethical guidelines either
in written or unwritten form. In UK, accountants need not be necessarily be a part of any
professional organisation, but it is mandatory for Chartered Accountants to be a member of
ICAEW, CAI or ICAS. It is major responsibility of professional bodies in organisation to
promote ethical behaviour in their business (Dent and Whitehead, 2013). The main role of each
professional working in finance and accounting sector to understand the certain code of ethics
and should avoid conflict of interest. In order to create ethical culture in organisation
professional can conduct continuous professional development programme for existing
workforce so that they modify their skills. They must ensure that services provided by them are
in trait framework and according to professional behaviour guidelines. Ethical behaviour
promotes honesty in the working environment of company and increases their profitability.

1.4 Reason about expectation to operate business within code of conduct and practice
Ethics can be as specific principles which govern an individual's behaviour to work in
professional manner. Code of ethics can be determined in terms of professional values that
incorporates principles and standards within a corporations. It is the responsibility of an
organisation to operate its business activities without harming environmental factors as it will
help a business entity in achieving their social objectives (Forster, 2012) . There are various
guidelines within which individuals, financial enterprises like HSBC Bank and finance sector
must operate which are necessary to be complied with due to the following reasons -
 It preserves the fundamental human rights of employees, business entity and customers.
 It reflects a strong commitment to equal opportunities for employment at all levels in
business environment.
 To promote social and economical upliftment and development of individual and country.
Thus, it can be said that professional code of conduct and practice is essential to be complied
with so as to eliminate any legal involvement in conduct of operations.
1.5 Risk of improper practice within an organisation and importance of vigilance
Improper practice and unfair labour practices is related to unethical conduct, offensive
behaviour etc., which create the negative impacts on business. If the ethical practices and code of
conduct are not followed by HSBC bank then it will be improper practices and the company
may have to face some issues or risks related to this problem. The risk of improper practices is
reducing the productivity of business due to money laundering and terrorist financing. Therefore,
on the other hand, Vigilance refers to an action to pay attention on any difficulties or
complexities. In order to remove the improper practice risks, HSBC bank can use the vigilance
for determining any issues or complexities. It gives necessary devices for the aim of improving
the performance of company (Fainstein and DeFilippis, 2015) . Through vigilance, bank can
prevent any happenings of incidents with the financial implications for business and consumers.
1.6 Opportunities for maintaining an up-to-date knowledge of changes
It is essential for an organisation to keep their knowledge of code of practice, regulation
and legislations that can influence the working of financial and banking sector. This help
professionals to work with desirable manner along with the requirements of laws and other
regulatory bodies ( Han, Park and Jeong, 2013). For making the working easier HSBC have to

follow the changes, this also help them in not disturbing the environment of business. This is
very necessary for the professionals present in financial and banking sector.
TASK 2
2.1 Way to work ethically when working with clients, suppliers, colleagues and others.
Banks and other financial organisations like HSBC are required to work in an ethical
manner while dealing with clients, suppliers, colleagues and other people as they deal with a
large number of people on a daily basis. Some of these ways are -
 Treating all employees with honesty and equity and give them full respect.
 Running a business in a manner that assures the behaviour of operations in a healthy and
secure environment without posing any risk to colleagues, clients and suppliers.
 Ensuring that the functions of organisation follow the code of conduct and practice and
fulfils all social and ethical obligations.
 Ensuring an honest and transparent behaviour while having communication with clients,
suppliers or colleagues (Hannafey and Vitulano, 2013) .
2.2 Importance of objectivity and maintaining a professional distance between professional
responsibilities and personal life
Maintaining both personal and professional boundaries in a business is an important task to
work. Boundaries refer to a limit that a professional keep in order to protect them and clients
from being unethical, conflicting and unprofessional relationships. Professionals are required to
make a boundary between their personal life and professional life so that they can focus on their
work. Individuals should stay away from personal talks and gossips. In professional life,
individual should focus on completing their own desires. the purpose of professionals is to meet
the demand of business and fulfilling requirement of clients so that their needs could be fulfilled
right on time. This distance in personal and professional lifestyle, helps to achieve the business
objectives and reduces the chances of disputes and conflicts.
2.3 Importance of adhering to organisational and professional values, codes of practice and
regulations
Leading banking and financial institution HSBC PLC providing banking services to all
across the world. Company has prescribed values and follows specified code of conduct and
practice wherein they make sure that every employee has right to sphere basic human rights and

is not discriminated on any basis (Harfield, 2012) . Also, company ensures healthy life to staff
and keep them safe from any physical and psychological injury and cultivating a strong brand
image, etc. Also, professionals who are part of entity behave in an ethical manner corresponds to
values, codes of practice and regulations so that they do not have to face any legal consequences
as a result of non-compliance and can continue their operations patiently.
2.4 Importance of adhering to organisational policies to handle clients money
Banks and financial institutions like HSBC deals with a large number of clients on a daily
basis to serve their purpose of provision of security. The company offers a number of accounts to
keep the currency of customers safely within organisational premises and to offer them the
option of withdrawal any time they want depending upon the choice of account by clients. In this
company, policy can be related to managing the funds, handling the cash procedures etc. Under
this, departments are more responsible in order to complying with handling of cash along with
creating the written operating process. The policy related to handle client’s money is helpful for
the staff members to examine the transaction related to accounting in same manner. It acts as
roadmap for application of accounting principles and also neglects the variance in the employee
judgement.
2.5 Circumstances when confidential information should be disclosed
Disclosure of confidential information in front of third party is strictly prohibited by law.
But in certain conditions like an customer found to be associated with money-laundering,
terrorists financing or due-diligence etc., then professional accountants of HSBC have right to
disclose such information in compliance with legal authorities. Any client when found suspected
in money laundering then under the Terrorism Act 2006 and Money Laundering Regulation
2007, it is a criminal offence. Therefore, it is an essential duty of auditors to disclose confidential
information to legal authorities. This would help in reducing occurrence of adverse affect of
criminal activities which may impact on business reputation in negative manner as well.
2.6 Importance of working within limits and confines of own professional experience,
knowledge and expertise
While every professional working in a financial institution like HSBC want to work in a
manner that is free from all restrictions and ensures ultimate freedom, it can not be neglected that
working within limits becomes necessary and important sometimes (Keefer and Davis, 2012) . If

a professional working in a bank possess knowledge of his limits and still fail to work within
them, the probable consequences may be failure of contract in relation to supply of services,
incriminate of fraud, professional neglect along with failure of faith and trust of clients. There
are many government bodies which work to monitor the activities performed by financial and
banking sector. This make the organisation of these sector to work according to the rules which
keep them away to any legal issues.
TASK 3
3.1 Relevant authorities and internal departments to which unethical behaviour, breaches of
confidentiality
Every organisation faces various kinds of issues related to failure of confidentiality and
unethical behaviour of employees. In relation to finance sector, any employee who observes any
kind of illegal activity can report it to Money Laundering reporting officer as it will help them in
breakdown of issues within the same sector. HSBC has also gone through such issues at
workplace which need to be reported. For unethical behaviour, HSBC has reported its manager
for solving out issues (Knapp and et. al., 2013) . Similarly, in case of illegal acts and other
malpractices followed in HSBC then manager need to take immediate actions so that it won't
take place in future. In case of any of any suspected fraud, unethical behaviour, failure of
confidentiality or misconduct, the report can be given to police, their Majesty's Revenue and
Customs (HMRC) or any other legal and regulatory authority situated in United Kingdom.
3.2 Action to take in instances when requests for work are beyond the employee’s competence
It is important for senior authority of financial sector to identify whether their employees
are performing their task efficiently or not. Their responsibility is not limited to evaluate their
performance but it also includes problems and barriers because of which employees are not able
to work effectively. When a professional is asked to perform a task regarding which they do not
possess sufficient expertise, time, training, there are huge chances of concern that may arise in
such individual mind in relation to the accuracy along with effectiveness and efficiency of work.
Thus, in such cases, employers in banking and financial institutions such as HSBC PLC may
adopt certain measures like shifting of roles and duties of individuals, inter departmental transfer
of such employee so that they can perform the task that they possess expertise and competence

in. Another measure can be providing them adequate training about the subject matter so that
they can do the task they have been assigned with ease.
3.3 How to report inappropriate behaviour of client
Clients or customers are considered as the first priority of every organisation but many
times these clients took this priority for granted and misbehave with employees. This behaviour
generally occurs because of the thought of being priority of organization (Knapp and
VandeCreek, 2012) . In relation to the working staff of finance sector, it is important for its
employees to observe the way their clients are behaving with them and in case if they identified
any unethical behaviour which is non tolerable they can directly report to their first senior.
Method of reporting - Employees who face inappropriate behaviour of clients are required to
review the company's handbook first. This would help in determining if such kind of behaviour
they observed is prohibited or not. For this process, management of HSBC used to conduct
private meeting with employees on regular basis to discuss with them about such activities. In
this process, workers are needed to carry documentation about suspicious activities so that
necessary actions can be taken.
3.4 Internal and external procedures to be followed for stopping illegal and unethical practices
Reporting an illegal activity is biggest problem for employees as they do not know the
actual procedure through which they can report it. Internal and external reporting in case of
suspecting any illegal or unethical activity within the premises of banking and financial
institution like HSBC is necessary so that the whole environment of organisation is not hampered
(Stappenbelt, 2013) . Internal reporting will include procedures wherein the employee will
follow the hierarchy of authority and thus will first communicate to his immediate superior who
will then transfer the information to top managers and owners. They will then take necessary
actions as per their own accord. On the other hand, external reporting will include
communication about the unethical conduct of employer, client, colleagues or any other person
to professional or regulatory bodies.
3.5 Strategies used to prevent ethical conflicts
Conflicts is the situation, arises when two or more peoples have different views and not
agreed on same topic. In relation to ethical conflict it is a state of situation when people disagree
due to their own ethical values. It results from smallest lie for decision which affect employees at

workplace includes fraud, finance, confidentiality and honesty. First strategies for preventing
ethical conflict is educating employees which can be done through organising training sessions
and meetings by the organisation. Second can be set limit for lower level employees for
following ethics and work accordingly so that no ethical conflicts can be prevented. Apart from
this, establishing a strong foundation, developing a culture of integrity within workplace will
help the employer in preventing conflicts.
TASK 4
4.1 Importance of an ethical approach to sustainability
Each and every organisation follow some strategies and approaches to develop the
sustainability in the market. Sustainability can be achieved by introducing ethical approach. This
states the business to focus on three main aspects which includes – Social equity, ecological
health and economical behaviour (Mohajeran, 2014) . When we establish code of ethics, it is
essential for every organisation to concern on advantages of customers, employees, employers
and all stakeholders. In order to run a business successfully, stakeholder’s supports will be good.
And in context with ethical manner, the clear guidelines can help employees to perform their task
in appropriate manner. This also help organisation to increase their faith in customers and this
leads to long term sustainability of firm.
4.2 Responsibilities of finance professionals in upholding the principles of sustainability
Responsibility of financial professional helps in upgrading sustainability of business
organisation. It has been analysed that responsibility of finance professional includes spreading
awareness of social responsibilities (Sadowski and Thomas, 2012) . It also includes promotion of
sustainable practices such as availing quick services to customers, creating positive working
environment for employees and placing efforts in improvement of existing products and services.
All of these contributes in enhancing sustainability of financial institution for long period of
time.
CONCLUSION
From the above mentioned report, it has been concluded that professional ethics are
considered as the behaviour which is expected by an individual to adapt at working environment.
It has also been evaluated that complying with ethical code of conduct and practice is imperative
for the individual or organisational growth. Also, By setting certain rules and regulation, a

company can give safe working environment to workers. Along with this, it has been analysed
that it is essential for professionals or business associations to keep their professional as well as
personal life separate in order to execute their business activities effectively.
REFERENCES
Books and Journals
Baase, S., 2012. A gift of fire. Pearson Education Limited.
Banks, S., 2012. Ethical issues in youth work. Routledge.
Cheng, Y., 2012. Further discussion on the construction of ethics of professional
accountants. International Journal of Business Administration. 3(3). p.28.
Dent, M. and Whitehead, S. eds., 2013. Managing professional identities: Knowledge,
performativities and the'new'professional (Vol. 19). Routledge.
Fainstein, S. S. and DeFilippis, J. eds., 2015. Readings in planning theory. John Wiley & Sons.