Volkswagen Case – CFA Code of Ethics

Subject: Business
Pages: 3
Word count: 689
Topics: Business Ethics, Business Law, Ethics, International Business


Volkswagen Company has violated some of the codes of conduct of the CFA. The ethical conduct of the company was put into question after the company was recently found to have cheated in their emissions tests. The company had succeeded to cover this massive scandal with the invention of sophisticated software that was fixed into diesel vehicles to manipulate information relating to emission. The production of the diesel gate technology led the company to commit various unethical practices. This analysis tries to elaborate the CFA code of conduct that the company violated through these unethical practices. 

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Volkswagen violated the professionalism code of conduct in various aspects. First, it did not comply with the knowledge of the law. The company ought to have understood and complied with the rules, regulations, and all applicable laws. Volkswagen knew the regulations on emissions and decided not to comply through creating software that could cheat the emissions tests. Second, the company abused its independence and objectivity. The company does not use reasonable care and judgment in the achievement of objectivity and independence. It benefits from selling high emission vehicles in markets that do not allow such emissions. The company creates software that helps it to pass the emission tests illegally (Code of Ethics and Standards of professional Conduct, 2014). 

Volkswagen violates the code of duties to clients. The firm ought to have loyalty, prudence, and care to all its clients. The company did not act with reasonable care and exercise judgment in their dealings with clients. The company sold high emission vehicles to clients by lying to them that those vehicles had low emissions. The clients were duped into buying high emission vehicles without their knowledge. The company violated the principle of fair dealing when interacting with their clients by cheating them on the emissions tests. The company did not consider the suitability of the vehicles to the clients. In contrary, they did the opposite. They were only concentrated with high volumes of sales and not the satisfaction of their clients. The company failed in its performance presentation to clients. The entity through its engineers cheated in the emissions test. Their engineers used diesel gate software to lower the emissions during the test only.  

The firm violated the code of integrity of capital markets. The company had material nonpublic information and used it to make others act on the information. The company used the information of cheating in the emissions tests to make its customers to purchase the vehicles assuming they were low emission vehicles. The firm participated in market manipulation. The practice of cheating through the emission prices made the company to raise its prices for the vehicles. The misleading of the public through the cheating of emissions made the company almost double its sales in the United States. 

The company violated the code of duties to employers. The company’s engineers were not loyal to their employers. They ought to have advised the company on the legal means that they could reduce the emissions instead of cheating in the tests. Their cheating ended up putting the reputation of the company into question. The senior managers in the company did not make an effort to ensure that the engineers complied with the rules, regulations, and applicable laws. Employees of Volkswagen knowingly made misrepresentations by cheating in the emission tests that were performed internally. This misrepresentation led to the misconduct of these employees. Their actions led to fraud and dishonesty (Asset manager code of professional conduct, 2005). 


In summary, Volkswagen has violated the standards of professional conduct. First, it did not meet professionalism due to their lack of knowledge of the law and lack of objectivity and independence. Second, the entity did not meet its duties to the clients by ensuring loyalty, prudence, care, suitability, and fair dealing. Moreover, the firm lacked the integrity of capital markets by not disclosing material nonpublic information and through market manipulation. Lastly, the company did not meet its duties to employers.

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  1. Asset manager code of professional conduct. (2005). Charlottesville, VA.
  2. Code of Ethics and Standards of professional Conduct. (2014). 
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