Question

Ethical issues in management accounting Ethical understanding is a key learning outcome for accounting students. Explain what is meant by each of the following fundamental ethical principles for accountants: integrity, objectivity, professional competence, confidentiality, and professional behaviour. What does being ethical mean to you? How could ethics be an issue in a management accounting environment?

Answer 1

Fundamental ethical principles :-

1. Integrity

2. Objectivity

3. Professional competence

4. Professional behaviour

5. Confidentiality

1. Integrity :- integrity is the act of behaving honourably even when no one is watching. People with integrity follow moral and ethical principles in all aspects of life. integrity should extend to professional areas at work such as decision making, interacting with colleagues and serving customers or clients.

employers who are committed to hiring employees with integrity are better equipped to provide high-quality service and maintain a positive reputation. When employees have integrity, dear managers can trust their team is working diligently.

2. Objectivity :- objectivity is an unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no quality compromises are made. objectivity requires that internal auditors do not subordinate their judgement on audit matters to others.

3. Professional competence :- to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional services based on current development in practice, legislation and techniques and act diligently and in accordance with applicable regulations

4. Professional behaviour :- principle of professional behaviour imposes an obligation on all professionals to comply with relevant laws and regulations and avoid any action that the professionals knows or should know may discredit the profession.

5. Confidentiality :- confidentiality is one of the most important of of internal audit professional code of ethics that required internal auditor to keep information that they obtained from client during their audit confidential. internal audit confidentiality also prevents auditors to use the current confidential interest to gain personal benefit.

Being ethical mean to me is not getting unjust enrichment and not making any profit or financial benefits at the cost of others. Being honest and to genuine in any type of situation. The ethics of a person will be presented by his behaviour in the situation where that person is able to do fraud. If a person is able to do fraud and he is willing to do fraud then he is not ethical. If a person is able to do fraud but he is not willing to do the fraud, then he is ethical.