Ethical Standards for Management Accountants Essay Example
Ethical Standards for Management Accountants
Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the accounting industry that have adopted a code of ethics for their specific field of accounting. For example, the National Institute of CPAs has instituted the “Code of Ethical Conduct” that sets forth ethical standards and rules of conduct for its members. Also, the Institute of Internal Auditors (IIA) has a Code of Ethics that applies to its members and to Certified Internal Auditors. However, the focus of this paper will be on the ethical standard for Management Accountants, which has been set forth in the Institute of Management Accountants (IMA) Standards of Ethical Conduct.
The vast majority, approximately 80%, of accountants and financial professionals work inside businesses and organizations – not in public accounting firms. Therefore, ethical standards play a huge role in the financial reporting of organizations around the world. According to the IMA, the roles and responsibilities of management accountants include the following:
• Managing functions that are critical to business performance
• Supporting organizational management and strategic development
• Provide accurate and insightful information for better decisions
• Ensuring the organizations operate with integrity
Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the accounting industry that have adopted a code of ethics for their specific field of accounting. For example, the National Institute of CPAs has instituted the “Code of Ethical Conduct” that sets forth ethical standards and rules of conduct for its members. Also, the Institute of Internal Auditors (IIA) has a Code of Ethics that applies to its members and to Certified Internal Auditors. However, the focus of this paper will be on the ethical standard for Management Accountants, which has been set forth in the Institute of Management Accountants (IMA) Standards of Ethical Conduct.
The vast majority, approximately 80%, of accountants and financial professionals work inside businesses and organizations – not in public accounting firms. Therefore, ethical standards play a huge role in the financial reporting of organizations around the world. According to the IMA, the roles and responsibilities of management accountants include the following:
• Managing functions that are critical to business performance
• Supporting organizational management and strategic development
• Provide accurate and insightful information for better decisions
• Ensuring the organizations operate with integrity