ACCA考试F1考试试题练习及答案（4）

(ii) Determine whether your decision in (b)(i) would change if you were to use the Maximin and Minimax

regret decision criteria. Your answer should be supported by relevant workings. (6 marks)

(ii) Write a letter to Donald advising him on the most tax efficient manner in which he can relieve the loss

incurred in the year to 31 March 2007. Your letter should briefly outline the types of loss relief available

and explain their relative merits in Donald’s situation. Assume that Donald will have no source of income

other than the business in the year of assessment 2006/07 and that any income he earned on a parttime

basis while at university was always less than his annual personal allowance. (9 marks)

Assume that the corporation tax rates and allowances for the financial year 2004 and the income tax rates

and allowances for 2004/05 apply throughout this question.

Relevant retail price index figures are:

January 1998 159·5

April 1998 162·6

4 Hogg Products Company (HPC), based in a developing country, was recently wholly acquired by American Overseas

Investments (AOI), a North American holding company. The new owners took the opportunity to completely review

HPC’s management, culture and systems. One of the first things that AOI questioned was HPC’s longstanding

corporate code of ethics.

The board of AOI said that it had a general code of ethics that HPC, as an AOI subsidiary, should adopt. Simon Hogg,

the chief executive of HPC, disagreed however, and explained why HPC should retain its existing code. He said that

HPC had adopted its code of ethics in its home country which was often criticised for its unethical business behaviour.

Some other companies in the country were criticised for their ‘sweat shop’ conditions. HPC’s adoption of its code of

ethics, however, meant that it could always obtain orders from European customers on the guarantee that products

were made ethically and in compliance with its own highly regarded code of ethics. Mr Hogg explained that HPC had

an outstanding ethical reputation both locally and internationally and that reputation could be threatened if it was

forced to replace its existing code of ethics with AOI’s more general code.

When Ed Tanner, a senior director from AOI’s head office, visited Mr Hogg after the acquisition, he was shown HPC’s

operation in action. Mr Hogg pointed out that unlike some other employers in the industry, HPC didn’t employ child

labour. Mr Hogg explained that although it was allowed by law in the country, it was forbidden by HPC’s code of

ethics. Mr Hogg also explained that in his view, employing child labour was always ethically wrong. Mr Tanner asked

whether the money that children earned by working in the relatively safe conditions at HPC was an important source

of income for their families. Mr Hogg said that the money was important to them but even so, it was still wrong to

employ children, as it was exploitative and interfered with their education. He also said that it would alienate the

European customers who bought from HPC partly on the basis of the terms of its code of ethics.

Required:

(a) Describe the purposes and typical contents of a corporate code of ethics. (9 marks)