Duration
30h Th
Number of credits
| Master in management (120 ECTS) | 5 crédits | |||
| Master in business engineering (120 ECTS) | 5 crédits | |||
| Master in business engineering (120 ECTS) (Digital Business) | 5 crédits |
Lecturer
Language(s) of instruction
English language
Organisation and examination
Teaching in the first semester, review in January
Schedule
Units courses prerequisite and corequisite
Prerequisite or corequisite units are presented within each program
Learning unit contents
1. Description of the Course Learning objectives
This course is tailored for students with either an audit or financial management background and requires a good understanding of the building blocks of those disciplines, acquired during bachelor and master years. The course focuses on the critical importance of integrity in financial markets and the individual and collective roles / accountabilities of professionals in that respect.
At the end of this course, students will have acquired:
- an overview of the main regulations covering finance, with specific focus and case studies (see below)
- a rigorous approach to practically analyse internal control / compliance weaknesses in organisations
- an understanding of the main cognitive biases that are inducive to improper behavior
- hands-on understanding of the roles of compliance, risk, internal audit and regulatory professionals in promoting / protecting / enhancing integrity in financial markets
2. Course structure and table of contents
2.1. The importance of Ethics in Finance
In addition to exploring the theories of ethics, the class will feature real-life examples of ethical issues, covering general and specific cases that investment and finance professionals may typically encounter. Key ethical issues such as conflicts of interests, fiduciary duties, obligations towards clients, agent-principal issues, transparency requirements, ...will be covered and illustrated with real-life examples. This section will also cover the main features of CFA Institute's Code of Ethics and Professional Standards of Practice.
A specific session will be organised on the main cognitive biases that often make professionals blind on their unethical behavior.
2.2. The importance of Regulations in Finance
Over the last decade, and specifically related to the 2008 financial crisis, the level of regulation has grown immensely across the finance industry, covering all sectors (banking, asset management, insurance, financial markets discipline, ...). This section will introduce some of the most important regulations and position them in the broader financial context.
The following pieces of regulations will be covered with practical case studies that students will have to work on (see 2.4. below)
Anti Money Laundering and Counter Finance Terrorism ('AML CFT')
Market Abuse and Transparency
2.3. The importance of Risk, Compliance and Internal Audit for Proper Governance in Finance
The compliance and risk functions (second line of defence), and internal audit (third line of defence) are key components of the three lines of defence model and of a proper governance system. The respective roles of the Board / Executive Management and Regulators will also be covered.
The course will be illustrated through practical examples and will be illustrated with testimonies from financial professionals in those roles (Head of Internal Audit, Head of Compliance, Forensic expert, Regulator).
2.4. Practical situations analysis and Case studies
Reading material
Bruun & Hjejle: 'Report on the Non Resident Portfolio at Danske Bank's Estonian Branch', 19 September 2018 - 87 pages
John Carreyrou, 'Bad blood: Theranos scandal secret and lies in a Silicon Valley start-up' (2018), Knopf - 299 pages
3. Assessment methods
Students in small groups will analyse the the two above case studies and identify the relevant regulations, ethical dilemmas and corporate governance weaknesses that led to those two scandals. Students will be required to prepare a written analysis and to defend it verbally in December 2023 (date to be fixed). A group rating, and potentially an individual rating (in case of individual over or under-performance within the group), will be given and will constitute the final result for the course for each student.
There will be no further exam in January 2024.
Learning outcomes of the learning unit
At the end of this course, students will have acquired:
- an overview of the main regulations covering finance, with specific focus and case studies (see below)
- a rigorous approach to practically analyse internal control / compliance weaknesses in organisations
- an understanding of the main cognitive biases that are inducive to improper behavior
- hands-on understanding of the roles of compliance, risk, internal audit and regulatory professionals in promoting / protecting / enhancing integrity in financial markets
Prerequisite knowledge and skills
- Good understanding of and interest in financial management
- Good understanding of audit processes and of the three line of defence model
Planned learning activities and teaching methods
- Theory sessions (including illustrations and concrete examples)
- Ethical standards and basic rules of professional conduct CFA with practical examples
- 2 Imposed Readings of financial scandals case studies
- Presentations by external guest experts on compliance / regulatory matters
Mode of delivery (face to face, distance learning, hybrid learning)
Face-to-face course
Additional information:
Theory + Exercise sessions
Testimonies:
- regulatory and prudential authorities
- consultants
- audit and compliance officers
Case studies (which will form the grade for the overall course) - see assessment method below
Recommended or required readings
Compulsory Reading material
Bruun & Hjejle: 'Report on the Non Resident Portfolio at Danske Bank's Estonian Branch', 19 September 2018 - 87 pages
John Carreyrou, 'Bad blood: Theranos scandal secret and lies in a Silicon Valley start-up' (2018), Knopf - 299 pages
Useful / Recommended readings:
- Code of ethics and standards of professional conduct, CFA Institute, 2014
- The standards of practice Handbook, 11th edition, CFA Institute, 2014
- Ethics in Finance, John R. Boatright, Third Edition, 2014
- Ethics in Finance, An Introduction, John Hendry, Cambridge
- Capitalism: Money, Morals and Markets, John Plender - specifically Chapters 3, 5, 7, 8 and 12
Course theoretical content:
- Powerpoint presentations and documentation folder (available on university website Lol@).
- videos
- The Milgram Experiment
Exam(s) in session
Any session
- In-person
written exam ( open-ended questions ) AND oral exam
Written work / report
Continuous assessment
Additional information:
The final assessment will be based on the two case studies that students will have to do in group.
Students in small groups will analyse the the two above case studies and identify the relevant regulations, ethical dilemmas and corporate governance weaknesses that led to those two financial scandals.
Students will be required to prepare a written analysis and to defend it verbally in December 2023 (date to be fixed). A group rating, and potentially an individual rating (in case of individual over or under-performance within the group), will be given and will constitute the final result for the course for each student.
Participation in class will also be taken into consideration in the overall mark.
Attention will be paid to avoid any free-rider students trying to purely benefit from the work of others
Work placement(s)
Organisational remarks and main changes to the course
Lectures will take place on Monday from 4:15 to 7:15 pm as from September 18 for approximately 6 sessions of 3 hours - the remaining hours will be devoted for students' work on their case studies
Contacts
Professor
Yves Francis
yfrancis@uliege.be