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BUSINESS ETHICS

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ORGANIZATION:

KPMG

CODE OF ETHICS AND EXAMPLES OF VIOLATION:

1. Insider Trading

It is the sale or purchase of securities, based on any important information that came

into your knowledge because of your job as an auditor.

The employees of KPMG are prohibited to indulge in insider trading, whether it is

sale/purchase of shares of KPMG or any firm related to KPMG.

Example:

I being the junior audit internee at KPMG was sent with the audit team to audit

Habib Limited Bank. While auditing I came across a major project proposal accepted by HBL

that will increase the market share of HBL. Later I bought shares of HBL with intention of

selling them at profit and indulged myself in insider trading.

2. Suspected illegal acts by client

KPMG is committed to act lawfully and ethically and encourage this behavior inmarketplace. If any auditor become aware of any illegal act (suspected or known) of client,

should raise their concern.

Example :

While auditing HBL I came to know that in their financial statements they have

misstated their assets. Moreover they had changed the method of depreciation just for the sake of

tax evasion. Instead of taking this method into account I ignored it and kept quiet about it.

3. Independence and conflict of interest

Employee at KPMG should avoid real or perceived conflict of interest and should

make independent decisions.

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Example:

While auditing an electronic company I developed good friendship with their

sales manager and ignored fake sales & sales return posted by him (for sake of showing good

performance)

VIOLATION OF CODE OF ETHICS AND REACTION

1. Sexual harassment

Sexual harassment is prohibited and looked down upon in every organization. In

past once I observed a junior female internee feeling uncomfortable. The reason behind her

discomfort was double meaning talk and passing comments by a senior member of the audit

team.

Accusing someone of sexual harassment and proving your point is very

difficult..It put me in difficult situation as I did not want to raise this issue because it would be

awkward for the female internee and will also effect by relationship with the senior member.

KPMG has a compliance helpline where you can report anonymously or confidentially. By usingthe hotline I anonymously posted this issue, in result of which the management took appropriate

steps to make working environment comfortable for female staff.

2. Confidentiality of intellectual property

It is the responsibility of every employee to take care of intellectual property of

their firm and every other organization related to the firm

The audit team of coca cola company included 2 new audit internees. The

competitors of the company offered bribe to the internee in exchange of material information of

strategies and future projects of the company. The internees accepted the offer and provided the

information. I overheard their telephonic conversation and immediately reported this unethical

act to the top management. According to code of ethics of ICAP (Institute of Chartered

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Accountants Pakistan) such unethical act results in cancelling of their Chartered Accountant

certificate.

3. Unauthorized entry in firm premises

Employees are given with badges that provide access to office entrance. Without

these badges no one is allowed to enter the office premises.

Few days back I witnessed one of my colleague helping an unknown person to

enter the office premises. My colleague swiped his card and when the door opened the allowed

the other person to accompany him. This was a threat to security of firm and assuming it a

serious issue I reported the matter to the Human Resource Manager but I refrained by

mentioning the colleagues name. Taking into account the security issue the firm hired a security

guard for the main door who checks the badge and swipes it for the employee. Moreover he onlyallows one person to enter the office per swipe.