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Case Study - Pro. Ethic
Case Study - Pro. Ethic
Case Study - Pro. Ethic
CASE STUDY
ANSWER
As the situation given, Serra Pandan Sdn. Bhd. is facing a poor corporate
governance. Having a family business is not an easy things. It requires good faith,
trust and good business sense. It also can be a pitfall to the failure of a business if it
does not establish healthy relationship boundaries between work and family. Impact
of having a poor corporate governance, maybe only leads to a company failing to
achieve its stated goals but the worst thing is it may lead to the collapse of the
company. Furthermore, having a poor corporate governance can pose conflict
towards shareholders. An example for ineffective corporate governance stem from;
Non-independent and under-qualified board members
Poor ethical leadership
Lack of integrity
Management who exhibit ineptitude
Inconsistent distribution of duties and responsibilities
Fraud
b. Whistle blower
c. Company remuneration
d. Conflict of interest
From the situation given there have a conflict of interest. First of all is
nepotism. It means giving favors to relatives and close friends. In this case in Serra
Pandan Sdn Bhd, one of the family member has moral ethic related to the business
family. Their behavior ethics has affected the project. Business family is very
challenging for board of directors outside of family members. They over spend
business allowance for personal use.
Secondly, self dealing. Self dealing is when someone acts in their own
interest rather than the interest of the organization. For example, shareholders only
interested on company profit because it may have affected their wealth via dividend.
Familiarity threat:-
That threat that due to a long or close relationship with client or employee, a
professional accountant will be too sympathetic to their interests or too accepting of
their work.