25602 Ethics in Finance

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2025 is available in the Archives.

UTS: Business: Finance
Credit points: 6 cp

Subject level:

Undergraduate

Result type: Grade and marks

Requisite(s): 25300 Fundamentals of Business Finance OR 25400 Financial Literacy
These requisites may not apply to students in certain courses. See access conditions.

Description

Ethical practices instil a public trust in the fairness of markets, allowing them to function efficiently. Additionally, ethical practices by finance and investment professionals benefit all market participants and stakeholders and lead to increased investor confidence in global capital markets. The perspectives acquired in this subject are useful to students in their place of work as a framework for ethical conduct in the investment profession is presented by focusing on the CFA Institute Code of Ethics and Standards of Professional Conduct. Citing examples of the scandals that have shaken public confidence in the ethics of Wall Street, this subject explains the importance of ethics in the operation of financial institutions and in the personal conduct of finance professionals.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:

1.	explain the major intellectual theories of ethics as a basis for the analysis and resolution of ethical dilemmas in finance
2.	critically examine ethical standards and issues of questionable professional conduct in finance by addressing topical issues related to ethics in investment decisions, financial markets, and financial services
3.	relate ethical principles to the financial theory of the firm, stakeholder theory, takeovers, corporate social responsibility and governance, international businesses, machine learning and artificial intelligence
4.	analyse, interpret and apply the CFA Institute Standards of Professional Conduct and recommend practices and procedures designed to prevent violations of ethical and professional practices related to financial analysis, investment management, and financial market trading.

Contribution to the development of graduate attributes

This subject contributes to the development of the following graduate attributes:

Intellectual rigour and innovative problem solving
Communication and collaboration
Social responsibility and cultural awareness
Professional and technical competence

The subject contributes to the aim of preparing students to commence a fulfilling and effective career in business, especially in finance professions, such as investment management, portfolio management and financial planning. In particular, the subject:

provides the intellectual basis for students to foster ethical and sustainable decision making in their future workplace through analysis and application of ethical theories and relevant financial theory to real world ethical dilemmas in business and finance,
applies the CFA Institute Code of Ethics and Standards of Professional Conduct through evaluation and assessment of international ethical case studies finance, incl. discussion of cultural relativism (e.g., Islamic finance), social justice and environmental challenges in finance),
develops and improves critical personal skills required in the workplace which include awareness, management, and resolution of ethical issues and conflicts of interest in finance using individual and team-based problem solving and presentations in class.

Teaching and learning strategies

A range of teaching strategies are used to pursue the subject’s purpose, which is to provide an understanding of real ethical problems faced by finance professionals and their resolution. The strategies include:

Student learning is achieved through integration of the subject’s content with relevant professional practice in an international context which is supported by a range of active learning experiences, which include:
- discussion of hypotheticals following in-class online polls,
- individual and group class exercises (as preparation for lectures, as well as in class simulations), including solving ethical dilemmas in business and finance based on real life cases of ethical misconduct.
- case studies, which students prepare before coming to class using resources that include news contributions, videos, regulatory rules and related opinions, and latest academic research (sources are provided on the learning management system and through the UTS library reserve material)
- role plays to simulate business decision making at the individual’s and business organisation level.
Guided learning is fostered by the study of theories, cases, concepts and applications outside class time using online (media supported) and offline (reading assignments).
The student learning experience develops throughout the semester along a set of rigorous academic learning goals which aim at fostering students’ cognitive ability to engage in moral reasoning.
Student learning is driven by students’ critical examination and questioning of solution approaches to ethical dilemmas using cutting edge academic research and learning tools.
Importantly, the subject encourages students to test their ideas and approaches to solve ethical dilemmas and provides feedback to facilitate responsible decision making in business and finance contexts. For example, students simulate in role plays business situations or transactions that exhibit potential conflicts of interests. Afterwards, students are being provided with feedback regarding their ability to identify and manage ethical dilemmas, as well as regarding the moral impact of the outcome situation/transaction on individuals involved and the greater community and society.

Content (topics)

Ethics in the world of business.
Welfare, rights, justice,
Whistle-blowing, trade secrets and conflict of interest.
Topics in ethics in finance.
Corporate social responsibility
Corporate Governance.
International business ethics.
The Ethics of Machine Learning and Artificial Intelligence
CFA Institute Standards of Professional Conduct – professionalism; integrity of capital markets; duties to clients; duties to employers; investment analysis, recommendations and actions; conflicts of interest.

Assessment

Assessment task 1: Quizzes (Individual)*

Intent:	Four quizzes each worth 25% (totalling 100%)
Objective(s):	This addresses subject learning objective(s): 1, 2, 3 and 4
Weight:	100%
Criteria:	Assessment is based on the following criteria: Demonstration of the understanding of ethical theories, related concepts, and implications for application to financial practices. Level of critical engagement with decision-making examples in the financial industry and application of decision-making frameworks to manage and resolve ethical dilemmas. Demonstrated capability to critically engage with financial theories of the firm to analyse and evaluate stakeholder behaviour. Ability to analyse and evaluate ethical dilemmas in finance and determination of compliance of behaviour and practices with standards of professional conduct. *Note: Late submission of the assessment task will not be marked and awarded a mark of zero.

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

Required textbook:

Boatright, J.R. & Smith J.D. 2017. Ethics and the Conduct of Business, 8th edition Pearson, NJ, USA.

Required handbook:

Standards of Practice Handbook (12th ed.), 2024, CFA Institute, Charlottesville, VA, USA.
Free handbook download (PDF and ebook, link to be found on Canvas)

Other resources

Canvas will be used to support your studies as follows:

Announcements about this subject will be posted regularly by the subject coordinator
To provide electronic copies of subject materials such as subject outline, lecture notes, PowerPoint slides and subject documents
To provide links to other digital resources and websites
To talk with other students about your studies and share resources or ideas
To post students' marks to the gradebook