Posted: August 6th, 2022
Identify Ethical Standards Violated
For each of the situations listed, identify the main standard of the IMA Statement of Professional Ethics that is violated (competence, confidentiality, integrity or credibility).
1. In a casual conversation with friends on a Friday night, Peter talks about how transfer prices are set at the firm where he is an accountant. As part of that conversation, he shares the variable costs of the company’s main product.
2. Jake, the controller who oversees transfer policies at Nealy Industries, fails to inform management that his sister is the senior partner in a consulting firm that is bidding for work at Nealy Industries.
3. At the year-end report to the board of directors, Connor, the controller, prepares the performance report. The board will base annual bonuses on this report. Connor designs the report so that favorable Key Performance Indicators (KPIs) are prominently displayed, while unfavorable KPIs are not included or are hidden in the back pages of the report so they are unlikely to be seen.
4. Each month, Kate, a corporate controller, prepares segment reports for all divisions of her company. In these reports, she includes all general ledger accounts. As a result, each division’s report is several pages long and no one except Kate and her staff can interpret the reports.
5. In the six years since he graduated with an accounting degree, Phil has not attended any continuing education seminars. An important part of Phil’s job involves everything from preparing performance reports. He has realized that he knows enough to do his job and has not forgotten any relevant information from his university syllabus.
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