B1.1 The Finance Minister is proposing a change to increase the fines imposed on auditors for
misconduct, with the aim of deterring unethical behavior and ensuring greater accountability in the
auditing profession, which the minister believes should be met with fines in the millions.
B1.2 In B1.1, the conduct was implemented through two main ways: first, by establishing clear
guidelines and policies that outline expected behavior and ethical standards, and second, by
providing training and education programs to ensure employees understand and adhere to these
standards.
B1.3 The key link between the case in Study unit 4.5.3 and the conduct in B1.2 is that both involve
unethical behaviour related to the misuse of company resources and the breach of trust.
B1.4 The Finance Minister proposed the change in order to address the current economic challenges
and improve the financial stability of the country. The Finance Minister proposed the change in
order to address the growing budget deficit and stimulate economic growth by implementing
measures to increase tax revenue and reduce government spending.
B1.5 The conduct in B1.1 has two impacts: it promotes a positive work environment by fostering
respectful and inclusive communication, and it enhances team collaboration and productivity by
encouraging active participation and sharing of ideas.
B1.6 One real-world end-result of the impacts described in B1.5 is the depletion of natural
resources, leading to environmental degradation and loss of biodiversity.
B1.7
1. Enron Corporation: Enron Corporation was an American energy company that was involved
in fraudulent accounting practices and corporate misconduct. The company's unethical
conduct led to its bankruptcy in 2001, impacting its employees, shareholders, and business
partners.
2. Arthur Andersen: Arthur Andersen was one of the "Big Five" accounting firms and served as
Enron's auditor. The firm was implicated in the Enron scandal for its role in approving
misleading financial statements. As a result, Arthur Andersen faced legal consequences,
including criminal charges and the loss of its reputation.
3. WorldCom: WorldCom was a telecommunications company that engaged in accounting
fraud, inflating its assets and earnings. The fraudulent conduct led to the company's
bankruptcy in 2002, impacting its employees, investors, and creditors.
4. Tyco International: Tyco International was a multinational conglomerate involved in various
industries, including security systems and electronics. The company faced allegations of
corporate fraud and misconduct, including unauthorized executive compensation and
accounting irregularities. Tyco's unethical behavior impacted its shareholders, employees,
and business partners.
B1.8 One likely underlying motivation for the conduct in B1.1, which is tax evasion, could be the
desire to minimize financial obligations and maximize personal gain or financial benefit.
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