Module:01_Ethics, Corporate Governance and Business Law-2nd Edition by Md.Md.Monowar FCA,FCMA,CPA,FCS, CPFA

Fundamentals of Ethics,
Corporate Governance and Business Law
2nd Edition (April-2020)
Page# 1
Md.Monowar Hossain FCA, CPA, FCS, CGA, CIPFA(UK), FCMA
CFO & Head of ICC, Agrani Bank Limited
eMail: md.monowar@gmail.com
Corporate Governance
and
Business Laws
__________________________________________________________________
Md. Monowar Hossain, FCA, CPA, FCMA
FCS, CIA, CIFRS, FIFC, CIPFA(UK), CGA
Chief Financial Officer (CFO) &
Head of Internal Control and Compliance (ICC)
Agrani Bank Limited
e-Mail: md.monowar@gmail.com
__________________________________________________________________
The contents of this paper may not be transmitted, re-published, modified, reproduced, distributed, copied, or sold without the prior consent of the author.

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Md. Monowar Hossain FCA, CPA, FCMA
FCS, CIA, CPFA(UK), CIFRS, FIFC, MBA
Head of Internal Control and Compliance (ICC) and CFO,
Agrani Bank Limited.
Former ‘Consultant (ED), Office of the Chief Accountant,
Bangladesh Securities and Exchange Commission (BSEC).
Former ‘GM (Internal Control and Compliance)’, Rupali Bank Ltd.
Former ‘Head of Corporate Governance & Financial Reporting Compliance
(CGFRC)’, Dhaka Stock Exchange Ltd.
Former ‘Head of Finance & Company Secretary’, Brummer & Partners
AB.
Former ‘Financial Management Consultant’, Institute of Social Studies
(ISS), Netherlands activity at the University of Dhaka, Bangladesh.
Md. Monowar Hossain, a Chartered Accountant, a Management Accountant, a Chartered Secretary,
Certified General Accountant, qualified from the ICAB, ICMAB, ICSB, ICGAB respectively. A qualified
member of all four professional Institutions in Bangladesh. At present, serving as the Head of Internal
Control & Compliance (ICC) and Chief Financial Officer (CFO) at Agrani Bank Limited from 1st
March 2015, a State-Owned Commercial Bank having 960 Branch networking with 14,000 human capital.
In 25years, professional experiences, contributed…
(1) At Agrani Bank:
 General Manager, Head of Internal Control & Compliance (ICC): 01/03/2015 and continuing
 Chief Financial Officer (CFO): 04/07/2019 (MD Circular: 09/19) and continuing
 Head of Agrani Equity Investment Co. Ltd. (Subsidiary of Agrani Bank Limited:
04/07/2019 to 19/09/2019.
 Head of Corporate Branches:
• Purana Palton Corporate Branch: 04/07/2019 to 19/09/2019
• Moulavi Bazar Corporate Branch: 04/07/2019 to 19/09/2019
• Uttara Corporate Branch: 04/07/2019 to 19/09/2019
• Bangabandhu Road Corporate Branch, N. Gang: 04/07/2019 to 19/09/2019.
(2) ‘Bangladesh Securities and Exchange Commission (BSEC)’ as the ‘Consultant of Office of the
Chief Accountant (Executive Director position)’;
(3) ‘General Manager (Internal Control and Compliance, ICC)’ at ‘Rupali Bank Ltd.’, responsible for
managing ICC risk through the Audit & Inspections, Monitoring and overall Compliance in the Bank;
(4) ‘Head of Corporate Governance & Financial Reporting Compliance (CGFRC)’ in ‘Dhaka Stock
Exchange Ltd.’ for 4 years;
(5) ‘Head of Finance & Company Secretary’ for ‘Brummer & Partners AB’, multinational
organization of Sweden, in its Dhaka Office;
(6) ‘SGS Bangladesh Limited’ for 6 years;
(7) ‘Cho Yang Line’ for 2 years;
(8) Worked as the ‘Financial Management Consultant’ at the ‘Institute of Social Studies (ISS)’,
Netherlands’ activities at Dhaka University, Bangladesh for 7 years.
Also, a Member of CIPFA(UK), Fellow Member of the Institute of Financial Consultant, a Fellow Member of
the Institute of Internal Auditor (IIA), USA. Did Masters in ‘Accounting’ and ‘MBA’. Have a long experience
in Regulatory Compliance, IFRS/IAS Compliance, Internal Control and Compliance (ICC), Auditing, Internal
Audit, Finance & Accounts, Taxation and Company Secretarial issues for more than 25 years.
One of the Co-Founder of the ‘Foundation of Chartered Taxation of Bangladesh (FCTB)’. Its objective is to
Increase Tax Payers, Strengthening Tax-net and Increase the Tax Revenue of Bangladesh. FCTB and United
International University (UIU) are jointly offered the ‘Post Graduate Diploma in Tax Management (PGDTM)’,
a specialized value-added qualification in tax management and tax compliance.

Page# 3
GE05: Fundamentals of Ethics, Corporate Governance and Business Law
Syllabus structure
Topics Study weightings
A Ethics and business 15%
B Ethical conflict 10%
C Corporate governance 10%
D Comparison of English law with alternative legal systems 10%
E The law of contract 20%
F The law of employment 10%
G Company administration and finance 25%
100%
GE05 – A. Ethics and business (15%)
Learning outcomes
On completion of their studies students should be able to: Indicative syllabus content
Lead Component Level
1. demonstrate an
understanding
of the
importance of
ethics to
business
generally and to
the professional
accountant.
(a) apply the values and
attitudes that provide
professional accountants
with a commitment to act in
the public interest and with
social responsibility;
3 (1) The importance of ethics.
(2) Values and attitudes for professional
accountants.
(3) Legal frameworks, regulations and
standards for business.
(4) The role of national ‘Professional Oversight
Boards for Accountancy’ and ‘Auditing
Practices Boards’.
(5) The role of international accounting bodies
e.g. IFAC.
(6) The nature of ethics and its relevance to
business and the accountancy profession.
(7) Rules based and framework approaches to
ethics.
(8) The ‘Seven Principles of Public Life’ –
selflessness, integrity, objectivity,
accountability, openness, honesty and
leadership.
(b) explain the need for a
framework of laws,
regulations and standards in
business and their
application;
2
(c) explain the nature of ethics
and its application to
business and the
accountancy profession;
2
(d) distinguish between detailed
rules based and framework
approaches to ethics.
2
2. explain the need
for CIMA
members to
adopt the
highest
standards of
ethical
behaviour.
(a) explain the need for
continual personal
improvement and lifelong
learning;
2 (9) Personal development and lifelong
learning.
(10)The personal qualities of reliability,
responsibility, timeliness, courtesy and
respect.
(11)The ethical principles of integrity and
objectivity.
(12)Professional competence, due care and
confidentiality.
(13)Disclosure required by law.
(14)The concepts of independence, scepticism,
accountability and social responsibility.
(15)The CIMA and IFAC ‘Code of Ethics for
Professional Accountants’.
(b) explain the need to develop
the virtues of reliability,
responsibility, timeliness,
courtesy and respect;
2
(c) explain the ethical principles
of integrity, objectivity,
professional competence,
due care and confidentiality;
2
(d) identify concepts of
independence, scepticism,
accountability and social
responsibility;
2
(e) explain the reasons why
CIMA and IFAC each have a
‘Code of Ethics for
Professional Accountants’.
2

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GE05 – B. Ethical conflict (10%)
Learning outcomes
1. explain the
various means
of regulating
ethical
behaviour.
(a) explain the relationship between
ethics, governance, the law and
social responsibility;
2 (16)The relationship between ethics and the
law.
(17)The distinction between ethical codes
and contracts.
(18)Corporate governance and social
responsibility.
(19)Unethical behaviour.
(20)The consequences of unethical
behaviour.
(b) describe the consequences of
unethical behaviour to the
individual, the profession and
society.
2
2. explain how
ethical dilemmas
and conflicts of
interest arise
and may be
resolved.
(a) identify situations where ethical
dilemmas and conflicts of interest
occur;
2 (21)The nature of ethical dilemmas.
(22)Conflicts of interest and how they
arise.
(23)Ethical conflict resolution.
(24)The CIMA Code of Ethics for
Professional Accountants –
‘Fundamental Principles’.
(b) explain how ethical dilemmas and
conflicts of interest can be
resolved.
2
GE05 – C. Corporate governance (10%)
Learning outcomes
1. explain the
development of
corporate
governance to
meet public
concern in
relation to the
management of
companies.
(a) define corporate governance; 1 (25)The role and key objectives of
corporate governance.
(26)The interaction of corporate
governance, ethics and the law.
(27)The development of corporate
governance internationally e.g. in the
UK, Europe, South Africa and the
USA.
(28)Rules and principles-based
approaches to governance.
(b) explain the interaction of corporate
governance with business ethics and
company law;
2
(c) describe the history of corporate
governance internationally;
2
(d) distinguish between detailed rules
based and principles based approaches
to governance.
2
2. explain the
impact of
corporate
governance on
the directors
and
management
structure of
public limited
companies and
how this
benefits
stakeholders.
(a) explain the effects of corporate
governance on directors’ powers and
duties;
2 (29)The impact of corporate governance
on directors’ powers and duties.
(30)Types of board structures, the role of
the board and corporate social
responsibility (CSR).
(31)The role of the board in establishing
corporate governance standards.
(32)Corporate governance codes e.g. The
UK Corporate Governance Code.
(33)Policies and procedures for ‘best
practice’ companies.
(34)The regulatory governance framework
for companies.
(35)Stakeholder benefits.
(b) describe different board structures, the
role of the board and corporate social
responsibility;
2
(c) describe the types of policies and
procedures that constitute ‘best
practice’;
2
(d) explain the regulatory governance
framework for companies and benefits
to stakeholders.
2
GE05 – D. Comparison of English law with alternative legal systems (10%)
Learning outcomes
1. explain the
essential
elements of the
English legal
system and the
tort of
negligence.
(a) explain the manner in which
behaviour within society is regulated
by the civil and the criminal law;
2 (36)The purpose of the civil and criminal
law.
(37)The sources of English law: custom,
case law, statute, European law and
other sources.
(38)The distinction between the common
law and equity.
(39)The system of judicial precedent.
(b) explain the sources of English law; 2
(c) illustrate the operation of the
doctrine of precedent by reference to
the essential elements of the tort of
2

Page# 5
negligence and its application to
professional advisers.
(40)The essential elements of the tort of
negligence, including duty, breach
and damage/loss/injury and the
liability of professionals in respect of
negligent advice.
2. describe the
essential
elements of
alternative
legal systems.
(a) describe the characteristics of the
legal systems found in other
countries;
2 (41)Alternative legal systems, including
codified (civil law) systems.
(42)The general characteristics of the
legal systems of France, Germany,
Poland, Italy, Denmark, Greece and
Cyprus.
(43)The general characteristics of the
legal systems of the USA, Malaysia,
China and Sri Lanka.
(44)Elements of Shari’ah law including
sources of Shari’ah law and the Five
Pillars of Islam.
(45)The benefits of international
regulations for commerce and
professional practice through the
work of key bodies e.g. IFAC, ISO,
FEE.
(b) describe elements of Shari’ah law; 2
(c) describe the role of international
regulations.
2
GE05 – E. The law of contract (20%)
Learning outcomes
On completion of their studies students should be able to:
Indicative syllabus content
1. explain how the
law determines
the point at
which a contract
is formed and
the legal status
of contractual
terms.
(a) identify the essential elements of a
valid simple contract and situations
where the law requires the contract to
be in a particular form;
2 (46)The essential elements of a valid
simple contract.
(47)The legal status of statements made
by negotiating parties. Offers and
acceptances and the application of the
rules to standard form contracts using
modern forms of communication.
(48)The principles for establishing that the
parties intend their agreement to have
contractual force and how a contract is
affected by a misrepresentation.
(49)Incorporation of express and implied
terms, conditions and warranties.
(50)The main provisions of the Sale of
Goods Act 1979 and the Supply of
Goods and Services Act 1982.
(51)Excluding and limiting terms; the
Unfair Contract Terms Act 1977 and
the Unfair Terms in Consumer
Contracts Regulations.
(b) explain how the law determines
whether negotiating parties have
reached agreement and the role of
consideration in making that
agreement enforceable;
2
(c) explain when the parties will be
regarded as intending the agreement
to be legally binding and how an
agreement may be avoided because
of misrepresentations;
2
(d) explain how the terms of a contract
are established and their status
determined;
2
(e) describe the effect of terms implied
into contracts by sale of goods and
supply of goods and services
legislation;
2
(f) describe how the law controls the use
of excluding, limiting and unfair
terms.
2
2. explain when
the law regards
a contract as
discharged and
the remedies
available for
breach and
nonperformance
.
(a) describe the factors which cause a
contract to be discharged;
2 (52)Discharge of a contract by
performance, agreement and breach.
(53)The law relating to frustration.
(54)The law relating to damages.
(55)The remedies of specific performance,
injunction, rescission, and requiring a
contract party to pay the agreed price.
(b) explain how the law of frustration
provides an excuse for non-
performance of the contract;
2
(c) explain the remedies which are
available for serious and minor
breaches of contract.
2
GE05 – F. The law of employment (10%)

Page# 6
Learning outcomes
1. explain the
essential
elements of an
employment
contract and
the remedies
available
following
termination of
the contract.
(a) explain the differences between
employees and independent
contractors;
2 (56)The tests used to distinguish an
employee from an independent
contractor.
(57)The express and implied terms of a
contract of employment.
(58)The rights and duties of employers and
employees.
(59)Notice and dismissal.
(60)Unfair and wrongful dismissal.
(b) explain how the contents of a contract
of employment are established;
2
(c) explain the distinction between unfair
and wrongful dismissal.
2
2. explain the
impact of
health and
safety law on
employers and
employees.
(a) explain how employers and employees
are affected by health and safety
legislation;
2 (61)The main rules relating to health and
safety at work, sanctions on employers
for non-compliance, and remedies for
employees.
(62)Social security compensation.
(63)Civil liability for occupational injuries.
(b) describe the consequences of a failure
to comply with health and safety
legislation.
2
GE05 – G. Company administration and finance (25%)
Learning outcomes
1. explain the
nature, legal
status and
administration
of business
organisations.
(i) describe the essential characteristics of
the different forms of business
organisations and the implications of
corporate personality;
2 (64)The essential characteristics of sole
traderships/practitionerships,
partnerships, companies limited by
shares and corporate personality.
(65)‘Lifting the corporate veil’ both at
common law and by statute.
(66)The distinction between public and
private companies.
(67)Company registration and the
advantages of purchasing a company ‘off
the shelf’.
(68)The purpose and contents of the articles
of association.
(69)Corporate capacity to contract.
(70)The advantages and disadvantages of
the company limited by shares.
(71)Board meetings: when used and the
procedure at the meeting.
(72)General Meetings of shareholders: when
used and the procedure at the meeting.
(73)The voting rights of directors and
shareholders.
(74)Ordinary, special and written resolutions
and their uses.
(ii) explain the differences between public
and private companies and establishing
a company by registration or
purchasing ‘off the shelf’;
2
(iii) explain the purpose and legal status of
the articles of association;
2
(iv) explain the ability of a company to
contract;
2
(v) explain the main advantages and
disadvantages of carrying on business
through the medium of a company
limited by shares;
2
(vi) explain the use and procedure of board
meetings and general meetings of
shareholders;
2
(vii) explain the voting rights of directors
and shareholders;
2
(viii) identify the various types of
shareholder resolutions.
2
2. explain the law
relating to the
financing and
management
of companies
limited by
shares.
(a) explain the nature of different types of
shares, the procedure for their issue
and acceptable forms of payment;
2 (75)The rights attaching to different types of
shares.
(76)The procedures for issuing shares.
(77)The issue of shares for an improper
purpose.
(78)Payment for shares.
(79)The maintenance of capital principle: the
purposes for which shares may be
issued, redeemed or, purchased and the
provision of financial assistance for the
purchase of the company’s own shares.
(80)The reduction of capital.
(b) explain the maintenance of capital
principle and the reduction of share
capital;
2
(c) explain the ability of a company to
take secured and unsecured loans, the
different types of security and the
registration procedure;
2
(d) explain the procedure for the
appointment, retirement,
2

Page# 7
disqualification and removal of
directors;
(81)The ability of a company to borrow
money and the procedure to be followed.
(82)Unsecured loans, and the nature and
effect of fixed and floating charges.
(83)The appointment, retirement and
removal of directors and their powers
and duties during office.
(84)Fraudulent and wrongful trading,
preferences and transactions at an
under-value.
(85)The rights of majority and minority
shareholders.
(86)The division of powers between the
board and the shareholders.
(87)The qualifications, powers and duties of
the company secretary.
(e) explain the powers and duties of
directors when in office;
2
(f) explain the rules dealing with the
possible imposition of personal liability
upon the directors of insolvent
companies;
2
(g) explain the rights of majority and
minority shareholders;
2
(h) explain the division of powers
between the board of a company and
the shareholders;
2
(i) explain the qualifications, powers and
duties of the company secretary.
2
Recommended Books:
1. CMA Study Text on Paper IE 01: Principles of Accounting
2. Steven J. Skinner, John M. Ivancevich (2002), Business 21st
Century
3. Mallin, Christine, A. 2010. Corporate Governance (3rd
edition), Oxford: Oxford
University Press
4. McKendrick, Law of Contract.
5. A Text Book on Law of Contract, under National Law Book Company,
Nilkhet Dhaka, by Md. Haider Ali, 2nd
Edition, 2011.
6. A text book on Easy understanding of The Law of Contract (Theory and
Practice) has been published, publisher: Hira Publication, by Syed
Sarfaraj Hamid, 4th
Edition,2011.

Page# 8
Corporate Governance and Business Laws
Module -01
Ethics and
business
(15%)
1. The importance of ethics.
2. Values and attitudes for professional accountants.
3. Legal frameworks, regulations and standards for business.
4. The role of national ‘Professional Oversight Boards for Accountancy’
and ‘Auditing Practices Boards’.
5. The role of international accounting bodies e.g. IFAC.
6. The nature of ethics and its relevance to business and the
accountancy profession.
7. Rules based and framework approaches to ethics.
8. The ‘Seven Principles of Public Life’ – selflessness, integrity,
objectivity, accountability, openness, honesty and leadership.
Ethics
At its simplest, ethics is a system
of moral principles. They affect
how people make decisions and lead
their lives. Ethics is concerned with
what is good for individuals and
society and is also described as
moral philosophy.
The term is derived from the Greek
word ethos which can mean custom,
habit, character or disposition.
Ethics refers to human
conduct as to make
judgments between what is
right and what is wrong.
should have ...
 Honesty
 Objectivity
 Integrity
 Carefulness
 Confidentiality
 Social Responsibility
 Competence
 Legality
The basic concepts and
fundamental principles of decent
human conduct. It includes study
of universal values such as the
essential equality of all men and
women, human or natural rights,
obedience to the law of land,
concern for health and safety and,
increasingly, also for the natural
environment.
Ethics covers the following dilemmas:
• how to live a good life
• our rights and responsibilities
• the language of right and wrong
• moral decisions - what is good and bad?
Our concepts of ethics have been derived from
religions, philosophies and cultures. They infuse
debates on topics like abortion, human rights and
professional conduct.
1
Code of Ethics of a Professional Accountant
Fundamental Principles - A Professional Accountant shall comply with the following
fundamental principles:
1
https://www.ifac.org/system/files/publications/files/ifac-code-of-ethics-for.pdf

Page# 9
a) Integrity – to be straightforward and honest in all professional and business
relationships.
b) Objectivity – to not allow bias, conflict of interest or undue influence of others to
override professional or business judgments.
c) Professional competence and due care – to maintain professional knowledge and
skill at the level required to ensure that a client or employer receives competent
Professional Services based on current developments in practice, legislation and
techniques and act diligently and in accordance with applicable technical and
professional standards.
d) Confidentiality – to respect the confidentiality of information acquired as a result of
professional and business relationships and, therefore, not disclose any such
information to third parties without proper and specific authority, unless there is a
legal or professional right or duty to disclose, nor use the information for the personal
advantage of the accountant or third parties.
e) Professional behaviour – to comply with relevant laws and regulations and avoid
any action that discredits the profession.
The importance of ethics
Good Ethics is a fundamental requirement of any profession. It is integral to the
success of the business as well. Ethics is a system of moral principles governing the
appropriate conduct of a person or a group. Maintaining good ethics is being consistent with
the principles of correct moral conduct constantly.
1. Satisfying Basic
Human Needs
2. Creating Credibility
within the
organization
3. Uniting People and
Leadership
4. Improving Decision
Making
5. Able to achieve Long
Term Gains
6. Securing the Society
The importance of ethics in professional life can be evidenced by a number of instances
showing failure of businesses and several scandals. It may be rightly said that the situations
would not have been so worsened had there been observance of ethical standards. Therefore,
maintaining ethical standards is must for the prosperity of an organization as well as the
development of one’s personality. Good ethics will lead us to maintain our honest image. It
will enable us to refrain from such activities that may discredit to our profession. Thus,
adhesion to good ethics is to let our conscience be our guide at all times. Ethics is the activity
of man directed to secure the inner perfection of his own personality.

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Values and attitudes for professional accountants
Values: Important and lasting beliefs or
ideals shared by the members of a culture
about what is good or bad and desirable or
undesirable. Values have major influence
on a person's behavior and attitude and
serve as broad guidelines in all situations.
Some common business values are
fairness, innovation and community
involvement.
The monetary worth of something in areas
such as accounting, economics, marketing
or mathematics.
Attitudes: A predisposition or a tendency to
respond positively or negatively towards a
certain idea, object, person, or situation.
Attitude influences an individual's choice of
action, and responses to challenges,
incentives, and rewards.
Four major components of attitude are
a) Affective: emotions or feelings.
b) Cognitive: belief or opinions held
consciously.
c) Conative: inclination for action.
d) Evaluative: positive or negative
response to
stimuli.
Professional accountants, whether practicing in public or private practice have an
important leadership role in society. Society expects professional accountants to behave and
act in the public interest. Proper ethical behaviour is therefore as important as technical
competence and together forms the basis to the definition of professional behaviour. This is
one of the fundamental principles in the CIMA ‘Code of Ethics’ and is defined as ‘a
professional accountant should comply with relevant laws and regulations and
should avoid any action that discredits the profession’.
An individual’s values and attitudes underpin that person’s behaviour or manner in which they
conduct themselves. Value words such as integrity, honesty and transparency; and attitudes,
such as desire to ‘do the right thing’ will help guide that individual. In professional life, values
and attitudes are codified in a code of ethics which clarifies the behaviour expected of
members of that profession.
Business life, in whatever sector, can throw up many changes and challenges to professional
accountants; throughout which professionals need to demonstrate consistency in their
application of ethical values, attitudes and in their behaviour towards others. It is primarily in
the relationships with others that values and attitudes are demonstrated. Professionals always
need to behave with integrity, to be reliable and work in a timely fashion in his/her dealings
with colleagues, customers, clients, suppliers and all others they come into contact with.
However, against a backdrop of being constant despite change, professionals need to be
aware of the wider expectations of society in order to fulfill their public role.
Society values and expectations do however change from time to time, usually in reaction to
events such as where there has been evidence of corporate failure due to misdemeanour or
fraud. Professional accountants, therefore, need to understand and be sensitised to ethical
issues and pressures, such as ethical implications when taking decisions, to play their role in
protecting against such instances. This is important in helping to build public confidence and
trust in business and the profession directly. If such confidence falters, society through the
democratic process may introduce new laws to curb excessive behaviours. The failure in public
confidence brought about by Enron was the genesis of the introduction of the Sarbanes-Oxley
Act in 2002.
In real life applying values and demonstrating the right attitude of doing the right thing
because it is the right thing to do can be difficult and takes courage.

Page# 11
Example-1
MUTTAKEEN is a qualified management accountant in a light engineering company. It is a
family-run company but does have a number of minority shareholders owning 15% of the
company’s shares. It is the year-end and the company has been through a difficult time
having lost a key client this year, but a memorandum of understanding has now been signed
with a new customer which bodes well for the future. Whilst future sales seem assured, the
MOU is not legally binding. MUTTAKEEN’s Boss, who is not an accountant and is also married
to the owner’s daughter, asks MUTTAKEEN to book a proportion of future sales into this year’s
accounts, telling him the paperwork will be following by the year-end and the factory is to
begin making the products required.
What should MUTTAKEEN do?
MUTTAKEEN’s options:
1) Do as requested
2) Challenge the request
3) Ask for the request in writing
4) Refuse
5) Bring this to the attention of the owner
6) Seek a second opinion from a fellow professional accountant
7) Start looking for another job.
Given the background to this situation, MUTTAKEEN will need to demonstrate courage in
challenging the request that has been made, until he has seen a written order for the new
customer. To do otherwise would be wrong as the year-end accounts would be false, if the
transactions were booked before orders were received.
MUTTAKEEN would be demonstrating the fundamental principles of integrity (being
straightforward and honest), objectivity (refusing undue influence) and diligence (acting in
accordance with applicable and technical standards).
Example-2
MONYEM Properties is a mendium-sized property development company specialising in buying
up inner city sites and redevel-oping them. They mostly build houses on these sites. They
have recently purchased a large site which was a former town gasworks. The price was very
good and MONYEM has immediately put in for planning permission. They have a certificate
from the vendor regarding the environmental cleanup that was done, which they intend to
rely on in their planning application.
What do you think they should do?
Options:
(a) MONYEM Properties continue to seek planning permission
(b) MONYEM Properties could commission their own environmental survey.
MONYEM Properties, acting responsibly, would need to satisfy themselves that the
environmental certificate was valid and the site had been cleaned up to make it suitable for
housing. To do otherwise would potentially be a risk to their reputation if subsequently the
land was proved to be unsuitable for housing use.

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Legal frameworks, regulations and standards for business
The combination of legal
frameworks, regulations,
guidelines and standards for
business are needed to
provide guidance on
behaviours. They exist for
individuals, and collective
bodies to adhere to, and are
a means of engendering
public trust and integrity in
the profession.
They are administered
through and by a number of
regulatory bodies as decreed
by parliament and the
accountancy profession, in
the case of self-regulatory
guidelines which the
accountancy profession has
collectively set itself.
There are two categories of framework:
(1) The first is legally binding and therefore is mandatory on all governed by them, to
comply.
(2) The second is voluntary in nature, where it is good or best practice to follow the
guidelines/standards and to adhere to them as well.
There are a number of frameworks in existence which govern the accounting profession. With
respect to ethical considerations, in the UK the lead has been taken by the Financial Reporting
Council (FRC). The FRC is the UK’s independent regulator for corporate reporting and
governance, with the aim of promoting confidence in these areas. Two further bodies forming
part of the FRC are the Professional Oversight Board (POB) and the Audit Practices Board
(APB). Each has a number of stated objectives but they include an oversight and review
function on ethical matters.
Financial Reporting Act -2015 (Bangladesh)
The Bangladesh National Parliament passed the Financial Reporting Act -2015 on September
6, 2015.
The Institute of Chartered Accountants of Bangladesh (ICAB) was the one and only governing
body for the country’s-chartered accountants. From now onwards the Financial Reporting
Council (FRC) of 12 members under the act will ensure accountability and performance among
the chartered accountants of Bangladesh. Moreover, the council will be a statutory body with
members from various government bodies, institutions and professional groups.
The FRC will be the watchdog body in order to monitor the function of auditors and ensure
transparency and accountability in accounting and auditing of financial organizations,
including various government, autonomous and non-government institutions.
The act will monitor both chartered accountants and cost and management accountants of
Bangladesh.

Module:01_Ethics, Corporate Governance and Business Law-2nd Edition by Md.Md.Monowar FCA,FCMA,CPA,FCS, CPFA

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