Professional Ethics and Governance notes

Professional Governance and Ethics notes

SomeaKenya provides Updated and Revised notes for the current CPA syllabus. Revision kits (Past papers with answers) are also available to help you with revision of the upcoming exams. you can get these materials in Hardcopies (Printed and Binded) and also Softcopies through Our mobile application which can be downloaded at Playstore.


Table of Contents

  1. Overview of Professional Ethics
    • Definitions of ethics, the good as the last end, the common good, ethical norms, morality, values and ethical conduct, conscience and levels of conscience
    • Ethical philosophy, principles
    • Ethics and professionalism
    • Definition of Business Ethics and Corporate Ethics
    • Benefits and importance of ethical conduct in the investment industry
    • Ethics and law
    • Challenges to ethical behaviour and ethical dilemma
    • Ethical decision making framework
    • Code of ethics and professional standards – ICIFA
    • Code of ethics versus code of conduct
    • Role of a code of ethics in defining a profession


2.                   Ethical Theories

  • Moral development (theories): Kohlberg Theory; Gilligan’s Theory
  • Consequentialist Theories: Utilitarian; Egoistic; Common Good
  • Non-consequentialist Theories: duty-based; the rights; the fairness or justice, the divine command
  • Agent-centred theories: the virtue; the feminist
  • Applied Ethics: terms used in ethical judgments; obligatory, impermissible, permissible, supererogatory
  • Framework for ethical decision making: the consequentialist framework; the duty framework; the virtue framework

3.                   Ethics and the Investment Industry

  • Need for high ethical standards in the investment industry and why it matters
  • Types of investment fraud
  • Ethics, Society, and the Capital Markets
  • Capital Market Sustainability and the Actions of market players
  • Relationship between ethical and legal standards
  • Commitment to Ethics by Firms
  • Applying the ethical framework
  • The standards of professional conduct
  • An ongoing commitment to professional competence: ethical decisions in the stock market; short selling, pump and dump, insider trading, bucketing, false trading, cornering
  • Factors influencing business ethics
  • Establishing ethics and trust in the investment industry


4.                   Generally Accepted Codes of ethics and Standards of Professional Conduct

  • Professionalism
  • Concerns of professional ethics
  • Integrity of Capital Markets
  • Duties to clients
  • Duties to employers
  • Investment analysis, recommendation and actions
  • Conflict of interest
  • Code of ethics for various professionals: ICIFA code of conduct, standards and ethics; Stewardship Code for Institutional Investors 2017; The code of corporate governance practices for issuers of securities to the public 2015
  • King IV Report on Corporate Governance
  • The revised Organisation for Economic Co-operation and Development (OECD) principles of corporate governance and their relevance to non-OECD countries
  • Cadbury Report of the committee on the financial aspects of corporate governance
  • The Hampel committee on corporate governance

6.                  Global Investment performance standards (GIPS)

  • The genesis of the GIPS standards
  • Construction and purpose of composites in performance reporting
  • Requirement for verification
  • Structure of the GIPS standards
  • Benefits from compliance
  • Features of the GIPS standards and the fundamental of compliance
  • Scope of the GIPS standards with respect to investments firms
  • Implementation of GIPS standards in countries and conflicts with local regulations
  • The nine major sections of the GIPS standards

7.                   Overview of Governance

  • Definition of governance
  • Principles of Governance
  • Importance of Governance
  • Governance and Management
  • Ethical Leadership
  • Codes of governance
  • Importance of Codes of Governance
  • Corporate Governance Concepts
  • Historical overview of Corporate Governance
  • Inter-relationship between Business Ethics and Corporate Governance
  • Governance and the Law
  • Role of the board in promotion of ethical conduct

8.                   Theories of Corporate Governance

  • The Agency Dilemma
  • Agency Theory
  • Stewardship Theory
  • Resource Dependency Theory
  • Stakeholder Theory
  • Transaction Cost Theory
  • Political Theory


9.                   Emotional Intelligence

  • Definition of emotional intelligence (EQ)
  • Components of emotional intelligence
  • Signs of High Emotional Intelligence
  • The Importance of Emotional Intelligence in a Leader

10.               Accountability, Risk Management and Internal Control

  • Ethical risk and how to manage it
  • The Fraud Triangle Theory
  • Traditional Risk Theory applied to ethical risk
  • Financial reporting
  • Integrated reporting
  • Strategies and processes in enterprise risk management
  • Board’s role in enterprise risk management
  • Internal controls
  • Audit Committee
  • External auditor
  • Internal audit charter and work plan

11.               Stakeholders Management

  • Stakeholder groups
  • Shareholders and stakeholder rights and interests
  • Shareholders and stakeholder obligations
  • Minority shareholders
  • Stakeholders engagement
  • Stakeholders dispute resolution
  • Shareholders association and education
  • The Role of institutional investors in corporate governance
  • Institutional investors’ relationship with investee companies

12.            Case Studies in Professional Values and Governance

  • Importance of case studies
  • Using ethical concepts to analyze case studies
  • Practical professional ethical study cases
  • Enron scandal
  • Case studies on select stock brokerage firms and banks

13.               Contemporary Issues and emerging trends

  • Impact and inter-relationships between social media and professional ethics and governance, how much should employees post, technology, racial discrimination



Written by 

Leave a Reply

Your email address will not be published. Required fields are marked *