In: Accounting
The Institute of Management Accountants, like other professional organizations, has produced a statement of ethics that their members are expected to follow. Find the IMA Statement of Ethical Professional Practice and read it in its entirety.
A. ETHICAL PRINCIPLES AND STANDARDS ADVOCATED BY THE IMA.
IMA, the association of accountants and financial professionals in business, is one of the largest and most respected associations focused exclusively on advancing the management accounting profession.
Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values and standards that guide member conduct.
Principles and standards
IMA’s overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility. Members shall act in accordance with these principles and shall encourage others within their organizations to adhere to them.
Standards
IMA members have a responsibility to comply with and uphold the standards of Competence, Confidentiality, Integrity, and Credibility. Failure to comply may result in disciplinary action.
1. COMPETENCE
· 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.
2. CONFIDENTIALITY
· 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.
3. INTEGRITY
· Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts of interest.
· 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.
4. CREDIBILITY
· Communicate information fairly and objectively.
· Provide all relevant information that could reasonably be expected to 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
B. HOW ETHICAL ISSUES SHOULD BE RESOLVED. THEN DETERMINE IF, AND/OR, HOW THE IMA SANCTIONS MEMBERS THAT HAVE ACTED UNETHICALLY.
The IMA Statement is unique among professional codes of conduct in that it provides suggested action steps designed to help resolve ethical issues. It isn’t part of the Standards section that IMA members are required to follow but rather contains suggested actions that IMA members and other accounting professionals may take to resolve unethical matters they may encounter.
The section states that members and other management accountants should work toward a solution of ethical issues and not just stand by and ignore them—while considering all of the risks involved and whether there are protections against retaliation for those who report the existence of an ethical issue.
Recommended actions include following the established policies of the employer organization, including use of an anonymous reporting system if available. Many organizations have developed policies and practices for dealing with and resolving ethical issues, and those policies and practices should be followed when they exist.
In applying the Standards of Ethical Professional Practice, the member may encounter unethical issues or behavior. In these situations, the member should not ignore them, but rather should actively seek resolution of the issue. In determining which steps to follow, the member should consider all risks involved and whether protections exist against retaliation. When faced with unethical issues, the member should follow the established policies of his or her organization, including use of an anonymous reporting system if available.
If the organization does not have established policies, the member should consider the following courses of action:
1. The resolution process could include a discussion with the member’s immediate supervisor. If the supervisor appears to be involved, the issue could be presented to the next level of management.
2. IMA offers an anonymous helpline that the member may call to request how key elements of the IMA Statement of Ethical Professional Practice could be applied to the ethical issue.
3. The member should consider consulting his or her own attorney to learn of any legal obligations, rights, and risks concerning the issue.
If resolution efforts are not successful, the member may wish to consider disassociating from the organization.
The revised IMA Statement of Ethical Professional Practice is a document IMA members can take pride in. They and other finance professionals can use it to form the basis of the ethics practices in their own organizations. Although a legal requirement to adopt a written code of conduct exists only for publicly held corporations in the United States, many private and not-for-profit organizations and other global entities have adopted portions of the IMA Statement as best business practices.
C. ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS’ (AICPA) STATEMENT ON ETHICS AND COMPARE AND CONTRAST IT WITH THE IMA’S ETHICAL PRINCIPLES AND STANDARDS, RESOLUTION OF ETHICAL ISSUES, AND POSSIBLE SANCTION OF MEMBERS WHO HAVE ACTED UNETHICALLY.
The Institute of Management Accountants (IMA) and the American Institute of Certified Public Accountants (AICPA) both provide certification options, continuing education and set professional standards for accountants. Both the IMA and the AICPA emphasize that accountants follow a code of ethics when performing their duties. Both organizations maintain a written code of ethics for their members to follow.
The IMA focuses on the sector of the accounting profession that serves businesses by working within the company, providing financial data to assist management with decision making, budgeting and analyzing alternative courses of action. These accountants serve customers internally within the organization and must maintain a level of trust with these customers. Maintaining high ethical standards develops the trust necessary for accountants to serve the needs of the company’s management and employees.
The AICPA focuses on the sector of the accounting profession that serves investors, lenders and creditors outside of the company. These accountants provide financial statements to assist investors, creditors and owners with decision making regarding credit terms, lending decisions or financial investment decisions. These accountants serve customers externally and must maintain a level of trust with these customers. Maintaining high ethical standards develops the trust necessary for accountants to serve the needs of the company’s owners, creditors and investors.
Both the AICPA and the IMA stress integrity in their ethical standards. Integrity refers to behaving consistently with what is right and maintaining the appearance of what is right. In order to do what is right, the accountant must remain honest with her customers, even when the information she is sharing is negative. The accountant needs to respect the privacy of the customer and keep the information confidential. The only exception to confidentiality is when required by law to share the information.