BUSINESS ETHICS

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 in
marketplace. 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.

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 using
the 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

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 only
allows one person to enter the office per swipe.