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Cost Accounting

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Cost Accounting
ETHICAL ISSUES IN MANAGERIAL ACCOUNTING

The aim of this paper is to highlight in the light of the empirical researches conducted previously the presence of ethical issues and dilemmas in managerial accounting. The implications of which can be disastrous bringing colossal giants crumbling to their knees. The prime aim is to throw light at the subtle inconsistencies that can cost the companies far more than just money but their entire image. The asset of ‘good will’ has its nemesis in these unethical practices surfacing.

Management accountants work inside a company, handling all internal accounting data. These individual often allocate production costs, create management reports and provide support for managerial decisions. Ethical issues can result from managerial accounting activities. Like all professionals, management accountants must be sure to be ethical when working for a company.

Importance • Facts
Business owners and managers typically rely on managerial accounting information in making decisions. Managerial accountants who act unethically and report inaccurate or irrelevant information can distort the decision process. They can also lose the trust of business owners and managers. • Features
A large part of managerial accounting is allocating business costs to the goods and services a company produces. Accountants who fail to allocate all costs in an effort to make production processes look better may cause the company to lose money. Revenue is lost because companies price goods and services according to their cost to the business.

Potential
Companies can face legal repercussions from unethical management-accounting practices. Many companies undergo financial audits, which can discover inappropriate accounting methods. Business owners unaware of unethical acts from their managerial accountants may be subject to fines or penalties from government agencies.

In scenarios where the ethical dilemmas present themselves with the

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