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Learning objectives of this article:
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What are the standards of ethical conduct for practitioners of management accounting and financial management
Practitioners of management accounting and financial management have an
obligation to the public, their profession, the organization they serve, and
themselves, to maintain the highest standards of ethical conduct. In
recognition of this obligation, the Institute of management Accountants has
promulgated the following standards of ethical conduct for practitioners of
management accounting and financial management. Adherence to these standards
internationally is integral to achieving objective of management accounting.
Competence:
Practitioners of management accounting and financial management have a
responsibility to:
- Maintain an appropriate level of professional competence by ongoing development of their knowledge and skills.
- Perform their professional duties in accordance with relevant laws, regulations and technical standards.
- Prepare complete and clear reports and recommendations after appropriate analysis of relevant and reliable information
Confidentiality:
Practitioners of management accounting and financial management have a
responsibility to:
- Refrain from disclosing confidential information acquired in the course of their work except when authorized, unless legally obligated to do so.
- Inform subordinates as appropriate regarding the confidentiality of information acquired in the course of their work and monitor their activities to assure the maintenance of that confidentiality
- Refrain from using or appearing to use confidential information acquired in the course of their work for unethical or illegal advantage either personally or through third parties.
Integrity:
Practitioners of management accounting and financial management have a
responsibility to:
- Avoid actual or apparent conflicts of interest and advise all appropriate parties of any potential conflict.
- Refrain from engaging in any activity that would prejudice their ability to carry out their duties ethically.
- Refuse any gift, favor, or hospitality that would influence or would appear to influence their actions.
- Refrain from either activity or passively subverting the attainment of the organization's legitimate and ethical objectives.
- Recognize and and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
- Communicate unfavorable as well as favorable information and professional judgment or opinion.
- Refrain from engaging or supporting any activity that would discredit the profession.
Objectivity:
Practitioners of management accounting and financial management have a
responsibility to:
- Communicate information fairly and objectively
- Disclose fully all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, comments, and recommendations presented.
Resolution of Ethical Conflicts:
In applying the standards of ethical conduct, practitioners of management
accounting and financial management may encounter problems in identifying
unethical behavior or in resolving an ethical conflict. When faced with
significant ethical issues practitioners of management accounting and financial
management should follow the established policies of the organization bearing on
the resolution of such conflict. If these policies do not resolve the ethical
conflict, such practitioner should consider the following course of action.
- Discuss such problems with immediate superior except when it appears that superior is involved, in which case the problem should be presented to the next higher managerial level. If a satisfactory resolution cannot be achieved when the problem is initially presented, submit the issue to the next higher managerial level.
- If the immediate superior is the chief executive officer or equivalent, the acceptable reviewing authority may be a group such as the audit committee, executive committee, board of directors, board of trustees, or owners. Contact with a level above the immediate superior should be initiated only with the superior's knowledge. assuming the superior is not involved. Except where legally prescribed, communication of such problems to authorities or individuals not employed or engaged by the organization is not considered appropriate.
- Clarify relevant ethical issues by confidential discussion with an objective adviser to obtain a better understanding of possible course of action
- Consult your own attorney as to legal obligations and rights concerning the ethical conflict.
- If the ethical conflict still exists after exhausting all levels of internal review, there may be no other recourse on significant matters than to resign from the organization and to submit an informative memorandum to an appropriate representative of the organization. After resignation, depending on the nature of the ethical conflict, it may also be appropriate to notify other parties.