Professional Ethics, An Effective Weapon Against Fraud

1. Professional Ethics, An Effective Weapon Against Fraud

2. Ethics & You • Corruption is defined as immoral, depraved, dishonest especially through taking bribes • An act which reflects the ethical standard of the person involved • Personal decision to go straight or to go astray

3. A Moral Crusade • Professor Lethbridge HKU once said in “Hard graft in Hong Kong” stated that the general public obviously expected the Commissioner of ICAC and his hadpicked staff to launch a moral crusade against deviant minority a dark figure indeed.

4. What is Ethics? • To guide one’s behaviors means ethics is used as the criterion to help making decision in an act to make sure it is ethical. This involves an ethical method.

5. How to Make Ethical Decision • Why is ethical method necessary • To judge independently • Many alternatives are not right or wrong • Either this or that attitude • The decision best is at ease with one’s conscience

6. Examples to make an ethical decision • I WISH TO BUY A SUIT • Goal : to buy a suit • Action : to find some money • Means : not decided yet – I wish to find ethical means

7. Check the means itself • List all the alternatives • I can take money from my saving • I can borrow it from a bank • I can steal from someone • I can do without the suit

8. Would the above conflict with the followings • Do my friends accept the act • My peers think stealing is only smart • Personally I think stealing without telling is stealing and unethical • My family values honor greatly • My professional codes forbids stealing

9. Check the consequences • List the probable consequences for each of the alternatives • Immediate consequences • Get the money to buy the suit • Sorry some one will lose the money • He would not be able to buy the camera • He may suspect me and lose faith in me

10. Make the Decision • Take some money fro my saving • Through stealing brings temporary joy to me but the bad effects outweigh the good • The same decision-making is used repeatedly to help to determine whether the act itself is ethical, the goals as well as the means • Only when all three are selected ethically could the act be ethical

11. The 3 Rs of Ethical Demands / Adherence • Meeting basic Requirement • Responsibilities clearly defined • Responsive to needs. Punishable / disciplined if neglected

12. Example • A drug manufacturer put down the required description of the medicine specified by law, or the code of practice issued by the pharmacists association.

13. R2 • Assuming responsibilities (both direct an indirect) • Not clearly defined, may or may not generally expected to be responsible • Not necessarily punished or disciplined if neglected

14. Example • The drug manufacturer put down information not specified for disclosure • Not warned the public of side effects • Though neither the law nor the code of the trade required it.

15. R3 • Be responsive to social calls, needs • Not generally expected to assume the duty • Definitely not punished if neglected • No upper limit set

16. Example • In view of public concern over safety of drugs, the manufacturer voluntarily improved the drug • Abandon the original drug if considered hazardous to health • Urge fellow tradesman to adhere to standards specified by law & code.

17. CRC Formula • C Stands for self-discipline : a self disciplined driver stays within specified speed limits even when no policeman is around • Rstands for Responsibility • A responsible driver avoids erratic driving even if no law spells out requirements in this respect

18. C stands for Commitment • A Transportation company owner committed to a social call for traffic safety arranges refresher or remedial driving courses for his drivers at his own initiative and expenses

19. Universal Values at a Closer Look Reciprocity : Would I like this done to me The Golden Mean : to avoid extremes is itself a virtue Integrity : the moral standards of a man and his words, actions are always coherent and integrated, is ethical in both his goals and ends

20. Universal Values at a Closer Look 4. Responsibilities to customers. Liabilities for products or service. Hones and fair dealing. 5. Responsibilities to employees : Fair personnel policies, good working conditions

21. Basic tenets of Professional Ethics • Commitment : to excellence in work • To satisfaction from work itself as a reward • To identify with the profession and protect its honor

22. Basic tenets of Professional Ethics • Responsibilities : for service / work done both legally & morally for protecting the average citizen from exploitation. • Discipline : self-regulation and disciplining fellow professionals.

23. Law & Ethics • Law is negative, it punishes and prohibits people from doing certain things • Ethics is positive, it encourages and rewards • Law sets the minimum standard for people to follow so as to maintain public order • Ethics urges people to adhere to high standards • People are compelled to follow outside sanctions such as punishment

24. Law & Ethics • People are urged to follow ethical standards by both outside and internalized values • Legal requirements are clearly spelt out. It is the chief social control • Ethics are vague, but effective as social control • Ethics and law are intimately related

25. Law & Ethics • Ethics is necessary to keep the government going • Ethics is not as something abstract, ideal dogmatic or mystical. It is just a sensible guidelines for group life.

26. Business Ethics • Business needs more control • Average man needs and affects him in many ways (e.g. food, clothing, health or even life style) • It is highly profit oriented. Some in business would readily sacrifice public well-being, or at least that to the consumer, for their own gains.

27. It controls vast resources, skills, it wields tremendous power. • Legislative concern over business practices has tightened • Business sector is asked to assume public accountability

28. Ethics Plus Decision Making Model • Establish the relevant facts and identify the ethical issues • Take stock of all stakeholders or parties involved • Have an objective assessment of each stakeholder’s position • Identify viable alternatives and their effects on the stakeholders

29. Compare and evaluate the likely consequences of each alternative with reference to the standards expected • Select the most appropriate course of action • Professional trade company code of conduct

30. Legal requirements : e.g. are there any breaches of the laws such as the PBO • Uncompromising self-values e.g. honest, fairness, trustworthiness • Sunshine test : whether the issue can be discussed openly and the decision disclosed without misgivings?

31. The Importance of an Ethical Culture • Corporate code of conduct • System of control • Management of staff integrity

32. Strengthening System of Control • Clear work procedures • Clear job responsibilities • Segregation of duties and functions • Effective staff supervision • Adequate safeguards against tampering with sensitive information • Effective internal and external communication

33. Strengthening System of Control • Channels for complaints and views • Continuous monitoring and reviews • Independent and surprise audit check