In the IMA Statement of Ethical Professional Practice, what are the overarching ethical principles that members are to act in accordance with and encourage others within their organizations to adhere to?
- Honesty
- Fairness
- Objectivity
- Responsibility
Define:
Honesty
Honesty is one of the overarching principles of the IMA Statement of Ethical Professional Practice.
Truthfulness or trustworthiness, telling the truth to the best of one’s knowledge.
What does Fairness entail?
Fairness is one of the overarching principles of the IMA Statement of Ethical Professional Practice.
Acting in an impartial manner and being free from bias, dishonesty, or injustice.
What does Objectivity mean?
Objectivity is one of the overarching principles of the IMA Statement of Ethical Professional Practice.
Basing a judgment on an established set of criteria; being unbiased, free from personal feelings or prejudice, and basing analyses and decisions on the facts alone.
What does Responsibility mean?
Responsibility is one of the overarching principles of the IMA Statement of Ethical Professional Practice.
Performing an act or a function completely and in a timely manner, being answerable or accountable for something that is within one’s own power, control, or management.
What are the ethical standards that IMA members must comply with according to the IMA Statement of Ethical Professional Practice?
- Competence
- Confidentiality
- Integrity
- Credibility
Failure to comply with these standards may result in disciplinary action.
What is required to maintain the standard of Competence, according to the IMA Statement of Ethical Professional Practice?
- Maintain an appropriate level of professional leadership and expertise by enhancing knowledge and skills.
- Perform professional duties in accordance with relevant laws, regulations, and technical standards.
- Provide decision support information and recommendations that are accurate, clear, concise, and timely. Recognize and help manage risk.
What does the standard of Confidentiality require from IMA members, according to the IMA Statement of Ethical Professional Practice?
- Keep information confidential except when disclosure is authorized or legally required.
- Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.
- Refrain from using confidential information for unethical or illegal advantage.
What actions are necessary to uphold the standard of Integrity, according to the IMA Statement of Ethical Professional Practice?
- Mitigate actual conflicts of interest and refrain from engaging in conduct that would prejudice carrying out duties ethically.
- Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
- Abstain from engaging in or supporting any activity that might discredit the profession.
- Contribute to a positive ethical culture and place integrity of the profession above personal interests.
What is involved in the standard of Credibility, according to the IMA Statement of Ethical Professional Practice?
- Communicate information fairly and objectively.
- Provide all relevant information that could influence an intended user’s understanding of the reports, analyses, or recommendations.
- Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.
- Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
What should an IMA member do when encountering unethical issues or behavior, according to the IMA Statement of Ethical Professional Practice?
Follow the established policies of his or her organization. If the organization does not have established policies:
- Discuss the matter with their immediate supervisor, or if the supervisor appears to be involved, with the next level of management.
- Contact the IMA helpline.
- Consider consulting their attorney regarding legal obligations, rights, and risks.
If resolution efforts are not successful, the member may wish to consider dissociating from the organization.
True or False:
The IMA Statement of Ethical Professional Practice requires members to maintain confidentiality at all times, even if a misrepresentation is taking place.
False
The IMA Statement of Ethical Professional Practice as of July 1, 2017 does not contain such a requirement. Maintaining confidentiality should not require a professional accountant to maintain silence if misrepresentation is taking place.
What are the three conditions that must be present for a trusted employee to commit a fraudulent act against his or her employer, according to the fraud triangle?
- Pressure
- Opportunity
- Rationalization
Pressure - a financial problem.
Opportunity - believing they have a way to use their position of trust with their employer to solve their problem without getting caught.
Rationalization - the ability to justify the crime as an acceptable or justifiable act, possibly because they see management behaving dishonestly.
According to the author of Other People’s Money where the theory of the fraud triangle is introduced, how can an employer cut off at least one leg of the “fraud chair” to reduce the chances of fraudulent activity?
- Make employees feel they can come to their employer about financial or other problems.
- Give employees a means to air grievances.
- Set a moral and ethical “tone at the top” of honest behavior.
- Provide a hotline to enable employees to anonymously report suspected wrongdoing.
- Limit opportunity by designing and implementing a control environment that prevents, detects, and deters most fraudulent behavior.
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A.1. Comparative Financial Statement Analysis11
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A.2. Financial Ratio Analysis150
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A.3. Profitability Analysis37
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A.4. Advanced Financial Topics60
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B.1. Risk and Return Fundamentals57
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B.2. Long-Term Financial Management124
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B.3. Raising Capital and Financial Markets38
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B.4. Working Capital Management105
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B.5. Corporate Restructuring and Valuation39
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B.6. International Finance68
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C.1. Cost-Volume-Profit (CVP) Analysis52
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C.2. Marginal Analysis and Decision Making57
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C.3. Pricing Decisions86
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D.1. Enterprise Risk Management (ERM)80
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E.1. Capital Investment Analysis and Cash Flows34
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E.2. Capital Investment Methods and Risk97
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F.1. Business Ethics and Fraud30
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F.2. IMA Code of Ethics and Fraud Triangle14
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F.3. Organizational Ethics and Culture64
