Management Accounting
The IMA statement of ethical professional practice begins with the overarching principles of honesty, fairness, objectivity and responsibility. The statement consists of four standards, these being competence, confidentiality, integrity and credibility. Lastly, the statement provides guidance for the resolution of ethical conflict. Three steps are to contact a superior, then an IMA ethics counselor and then finally a lawyer.
There is evidence in the Enron case that Enron's executives violated some of the elements of the IMA ethical statement. Now, it is worth remembering that the fraud was related to the financial accounting statements, and there is less strict legal guidance with respect to managerial accounting, but the IMA statement still pertains to the accounting function. Clearly, Enron did not adhere to the overarching principles of honesty, fairness, objectivity and responsibility. It is felt that they were probably deliberately dishonest and it has been proven that they hid the true financial condition of the company in convoluted statements. There is a strong relation between the lack of transparency and lack of honesty. Fairness is violated because senior management needed to be fair to the other stakeholders, and it was not. Enron executives were not objective either, but were instead childish in their responses to questions about the accounting. Lastly, they consistently failed to accept responsibility for their actions until a judge forced them to.
With respect to competence, the managers are supposed to provide information that was clear, concise and timely, and this was not the case. Many within Enron did not have a clear picture of the company's finances, much less anybody outside of the company. Integrity was also violated. There was clear conflict of interest on the part of managers who were being compensated via bonuses, the valuation of which they were essentially responsible for. This led to overvaluing of contracts and a lack of willingness on the part of managers to disclose bad news....
Lessons from Ethical Violations in Public AccountingPublic accounting is a field faced with ethical issues similar to any area of practice. Unethical practices in accounting are often motivated by management greed, incentives, bonus, management pressure, and more. These practices only lead to short-term gains (Finn, Chonko & Hunt, 1988). The long-term impacts are usually negative consequences. Ethical behavior and practices are critical aspects of good accounting. Accounting regulations and rules
Accounting: Ethical Issues in Budgeting What should an employee do when he or she discovers that there is an error in a projection? Accounting professionals have a duty to observe high standards of conduct and integrity in order to uphold the reputation of the accounting profession. For instance, if an error occurs in sales projections, the accountant has a duty to correct the error immediately and inform the head of the department
Managerial Accounting: Organizations and Expectations The profession and practice of accounting has become increasingly prominent and increasingly scrutinized over the past decade or so, in the wake of major scandals and upsets in the business world that can be traced in part to nebulous and unethical accounting practices or outright frauds. Because of this increased prominence, accountants today need to be more concerned than ever with not only the standards to
Pirate Steel Ethics Case Study Three issues are the main challenges in this case study. One is the theory of rights, which is particularly imperative in the existence of an organization. This theory claims that all parties should be well represented and has utmost satisfaction. There should be no violation of rights for any of the parties. In this case study, all the parties should have information on the proceedings of
Rank VI personnel: senior technician; supervisory staff, chief technician, assistant to specialists, 1 senior secretary, graduate trainee. Rank VII personnel Senior clerical staff technician senior clerk, senior switchboard, security supervisor. A junior trainee mgrs. Keeping only Sr. switchboard, Jr. trainee mgrs Skilled grade: craftspersons salaries clerk computer operator security men. Keeping 1 craftsperson, salaries clerk, and 3 security guards Semi-Skilled Grade: general driver general clerk typist/receptionists. Entertainment and publicity budget Limited events with volunteer help, donated food, drink and entertainment Total Employees Before = 55) After cuts) 34 Total
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