Question

.Explain the importance of ethics in cost accounting.
.Name three situations the cost accountant may face - in which
Your integrity as an accountant - and how you should deal with it - may be in question

Answer 1

Cost accounting is the subset of managerial accounting and it helps management in determination and accumulation of product process or service cost

Role of cost accounting -

- helps management in making strategic decisions by identifying an organisations comparitive strengths and weaknesses and in a better ways to use improve or eliminate them

- performance measurement

- cost reduction and control

Role of ethics in cost accounting

* ethics - the principles of conduct governing an individual or a profession : the discipline dealing with what is good or bad or right and wrong or with moral duty and obligations, a particular theory or system of moral values

Ethics are important in any field.

In cost accounting ethics play an important role . Ethical situations can arise in any business setting when money is involved

Situation faced by cost accountant

- cost analysis

- budget and forecast effectively

- getting progress data from multiple subcontractors

- integrating schedule and cost

- aligning data between multiple source systems

- time and effort involved with reporting

- managing the customer relationship

- accuracy of reports

- insufficiency resources for controls

- controlling challenges

Integrity requires accountants to be honest candid and forthright with a clients financial information