- 20 Marks
CSME – May 2021 – L2 – Q6 – Ethics in Business
Analysis of Mr. John’s actions regarding insider trading based on various ethical perspectives.
Question
Mr John, a professional accountant, is the Chief Executive Officer of a company quoted on the Nigerian Stock Exchange. He also owns about 20% of the company’s shares worth hundreds of millions of Naira. Due to several factors, the company began performing poorly, leading to an unpublished financial report indicating a huge loss. In anticipation of a slide in the company’s share price, Mr. John instructed his stockbroker to sell half of his shares for potential repurchase once the price drops after the financial statements are released. He profited substantially from this transaction.
Required:
a. Analyse the action of Mr. John using:
i. The Model Code (3 Marks)
ii. Critical Theory (3 Marks)
iii. Moral Development of Accountants (4 Marks)
b. Advise Mr. John on the fundamental ethical principles which professional accountants are expected to comply with. (10 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Critical Theory, Ethical Principles, Insider Trading, Model Code, Moral Development
- Level: Level 2
- Topic: Corporate Governance, Ethics in Business
- Series: MAY 2021