Ethical issues in exams

This section will explore what is expected from students when answering exam questions related to ethics. You are advised to view scenarios using an “ethical lens”, being aware of any potential threats or “red flags” to the longer term success of the business, and to apply the Code and consider ethical conflict resolution.

In the end of this part there is a selection of questions and scenarios based on past exams and practice tests, together with links to further resources.

Evidencing an understanding of ethics

Throughout the exams in the syllabus your application of the CIMA Code of Ethics and your consideration of ethical conflict will be tested. Examiners have noted that there are times when students:

  • struggled with applying analysis to the ethical aspects in the exams
  • gave too generic and speculative answers
  • failed to distinguish between business and ethical considerations

Ensure that you are prepared for the ethical dimension of exams to avoid mistakes and missing out on marks.

The syllabus includes a wide range of topic areas, including for example ethics in relation to tax, corporate responsibility, organisational culture and the impact of globalisation. It also includes ethical conflict resolution.

Ethical issues vs business issues

So what is the difference between an ethical issue and a business issue? In general terms, a business issue is one which affects the performance, profitability or cash flow of the company and which needs to be tackled to improve business efficiency.

In contrast, an ethical issue is one in which the performance of the company, and often profitability, may be in conflict with the well-being of stakeholders (employees, customers, community)  and what is considered to be sustainable and “good business”.

Reputational failure is a business issue and the source of reputational failure is the ethical consideration. The source itself should be resolved (i.e. the threat that should be safeguarded) before it becomes a reputational issue.

Please view our case study here.

Ethical conflict

Aspects of ethical conflict could appear in a number of exams, you must therefore feel confident that you would recognise when a conflict might arise, and also how you might respond appropriately in such situations.

Being familiar with the Code is essential, as it outlines common threats and safeguards, and helps guide appropriate action. You should be showing your skills in understanding the complexities of the situation and how the ethical principles would apply in resolving them. The principles of the Code are:

  • Integrity
  • Objectivity 
  • Professional competence and due care
  • Confidentiality
  • Professional behaviour

View the CIMA Code of Ethics

Ethics from operational to strategic level

The 2019 syllabus offers objective tests for each subject, and an integrated case study at each level. The integrated case study includes pre-seen material and information given on the day, as well as during the exam.

The syllabus includes material such as sustainability and integrated reporting, and there is a focus on risk. Supply chain management, organisational culture, globalisation and public interest issues are also featured.

The  syllabus is competency based. The four finance competencies outlined in the CGMA Competency Framework are technical skills, business skills, leadership skills, and people skills.

The weight placed on each competency shifts throughout your study level, from concentrating on technical skills in operational level, to a more even focus between the four key competencies in strategic level.

The CGMA Competency Framework underlines how all skills are underpinned by ethics, integrity and professionalism.

In exams, you need to be able to show that you can identify an ethical issue and apply the Code of Ethics to resolve it. In the later levels in particular you should be able to analyse and evaluate, thus being able not only to quote the fundamental principles but explain how and why they impact on wider business decisions – and what the benefits of this are.

In the next section we highlight a mix of questions from current practice tests and a previous case study. Ethical considerations may come up in a number of subjects but your approach would be the same. As is highlighted in Part 1 and 2, you have a particular responsibility to uphold the Code in all that you do.

Test: Sample questions and case studies

The examiners recommend that you evidence:

  • What the ethical issue is
  • Why you consider it to have an ethical dimension
  • Detailed and justified advice on what actions could be taken to address the ethical issue in the short-term and longer-term together with your justification for the advice.

This not only shows how you have developed an ethical understanding, but will also help you achieve higher marks.

Ethics CPD tool: doing the right thing

Take a look at our Ethics CPD Tool which will challenge you with a variety of different scenarios.

Find out more