Question

Name the four areas in which standards of ethical conduct exist for management accountants in the United States. What organization sets forth these standards?

A.

(1) Honesty, (2) Fairness, (3) Objectivity, and (4) Responsibility. These standards are set by the Institute of Management Accountants (IMA).

B.

(1) Competence, (2) Confidentiality, (3) Honesty, and (4) Fairness. These standards are set by Generally Accepted Auditing Standards (GAAS).

C.

(1) Competence, (2) Confidentiality, (3) Integrity, and (4) Credibility. These standards are set by the Institute of Management Accountants (IMA).

D.

(1) Honesty, (2) Fairness, (3) Integrity, and (4) Objectivity. These standards are set by the Council of Management Accountants (CMA).

Answer 1

ANSWER IS OPINION C.

The areas in which standards of ethical conduct exist for management accountants in the United States are: 1.COMPETENCE 2.CONFIDENTIALITY 3.INTEGRITY 4. 4.CREDIBILITY.

These standards are set by the INSTITUTE OF MANAGEMENT ACCOUNTANTS (IMA).

Management accountants should behave ethically for maintaining good professional image. These four areas in which standards ethical conduct exist are explained below:

1. COMPETENCE:

It refers to ensure an appropriate level of professional expertise in developing knowledge and skills. It also includes performing professional duties in accordance with laws,rules and regulation. Accountant should provide decision based on information and recommendations which are accurate, clear, concise and timely.

2. CONFIDENTIALITY:

As per this standard, an accountant should keep information confidential except when disclosure is required legally. He should inform all relevant parties regarding appropriate use of such information and should not use these information for unethical practices.

3. INTEGRITY:

It refers to mitigate the actual conflict of interest and to refrain from any conduct which leads to prejudice in carrying out duties. It also includes abstaining from doing anything that may discredit the profession.

4. CREDIBILITY:

As per this standard, an accountant should communicate information fairly and objectively. He should disclose all information to stakeholders for understanding reports, analysis or recommendations. There must be proper timeliness, internal controls and the right processes with organisational policies.