Jessy is the executive director and qualified accountant of a large public listed company. Jessy was recently

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Question:

Jessy is the executive director and qualified accountant of a large public listed company. Jessy was recently in charge of awarding large outsourcing contracts for her company, without inviting an open tender. When her family fell into heavy debt, she looked for a way to make some additional income. Her company was seeking to place a contract for a large outsourced service. Out of desperation she accepted a bid from one supplier who said it would pay her $50,000 as a 'thank you' once the contract was awarded.

She justified her behaviour by reminding herself that she obtained her job partly because she was an accountant and that she had worked extremely hard to obtain her accounting qualification. She believed she was entitled to make a 'higher personal return' on her investment of time and effort in her accountancy training and through successful qualification as a professional accountant. Her act was in violation The IFAC code of professional ethics. The IFAC code of professional ethics (2009), relevant to accountants, contains the following advice. 'A professional accountant in business or an immediate or close family member may be offered an inducement. Inducements may take various forms, including gifts, hospitality, preferential treatment, and inappropriate appeals to friendship or loyalty. Offers of inducements may create threats to compliance with the fundamental principles of professionalism.

Required:

a) Briefly describe the five types of ethical threats in the IFAC code of professional ethics (2009) and discuss how accepting excessive 'gifts' or 'hospitality' can give rise to some of these threats within this case.

b) Criticise Jessy's beliefs and behaviour, and explain why accepting the $50,000 conflicts with her duty to uphold the public interest.

c) There are ethical issues, legal restrictions and other regulations around potential insider trading.' Required: Explain what 'insider dealing/trading' is and why it is an unethical and often illegal practice.