ICAEW SE · Chapter 6 · Question 6 of 10
A company legally moves its profits to a low-tax jurisdiction through an artificial arrangement that has no commercial purpose. Many stakeholders criticise the company. What does this illustrate about the relationship between ethics and law?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) An action can be legal but still be considered unethical
Explanation
Law sets minimum standards of behaviour, whereas ethics is about doing the right thing in the circumstances. An arrangement may comply with the letter of the law yet be seen as unfair or contrary to the spirit of the law. Ethical behaviour therefore often goes beyond legal compliance.
More The concept of ethics and its significance for the accountancy profession MCQs
- Q8Which of the following is most important in establishing an ethical culture within an organisation?
- Q9When a professional accountant is making an ethical decision, why is it important to identify the stakeholders affected?
- Q10A professional accountant in practice is asked to provide assurance on a client's greenhouse gas emissions statement. Which statement…
- Q1Which of the following best describes professional ethics?
- Q2Which statement correctly contrasts ethical objectivism with ethical relativism?