Ethics for Management Accountants Paper 2

1

Sheila is a financial manager who has discovered that her company is violating environmental regulations. If her immediate superior is involved, her appropriate action is to






2

IMA members are obligated to maintain the highest standards of ethical conduct. Accordingly, IMA’s Statement of Ethical Professional Practice explicitly requires that IMA members






3

Integrity is an ethical requirement for all IMA members. One aspect of integrity requires






4

Under the express terms of IMA’s Statement of Ethical Professional Practice, an IMA member may not






5

An IMA member discovers a problem that could mislead users of the firm’s financial data and has informed his or her immediate superior. (S)he should report the circumstances to the audit committee and/or the board of directors only if






6

Recently, Fan Club, Inc., submitted to management a budget for the coming year. Included in the budget were the plans for a new product, a rechargeable fan. The new fan will not only last longer than the competitor’s product but is also more quiet. While not yet approved, the budget called for aggressive advertising to support its sales targets, as the business community was not yet aware that Fan Club was close to production of a new fan. A member of the management accounting staff “shared” the budget with a distributor. In accordance with IMA’s Statement of Ethical Professional Practice, which one of the following would best represent an ethical conflict in this situation?






7

A new management accountant is concerned about complying with the ethical standard of competence in the IMA’s Statement of Ethical Professional Practice. Which one of the following is not required under the standard of competence?






8

Scott Jon, a new accounting clerk at a firm that had recently terminated several employees due to budgetary cutbacks, accidentally viewed his supervisor’s biweekly paycheck. Not realizing that the paycheck included an annual bonus, Jon erroneously multiplied the gross pay by 26 to find annual earnings. Jon was amazed that his supervisor appeared to earn more than twice the local average for employees in an accounting supervisory position. Jon discussed this situation with a friend, a recently terminated employee of the company who now worked for a local newspaper. As a result of this discussion, the supervisor’s “outrageous” salary was made public. Which one of the standards of the IMA’s Statement of Ethical Professional Practice did Jon’s actions violate?






9

Chris Benedict was recently tried and convicted in court for producing and selling illegal narcotic drugs. None of the activity occurred during work hours, and Benedict performed duties as a management accountant without incident during the period of illegal activity. Benedict has argued that because the illegal activity was unrelated to Benedict’s service as a management accountant, no ethical violation had been committed. Which provision of the IMA’s Statement of Ethical Professional Practice is most likely to apply to Benedict’s illegal actions?






10

At NC Corporation, year-end bonuses at each branch office are based on branch profitability. Due to a slow economy, profitability through the third quarter at the Northeast branch is under budget. To address this issue, the accounting staff at the Northeast branch develops a list of end-of-year actions designed to boost earnings for the year. Which one of the following is most likely to violate IMA’s Statement of Ethical Professional Practice?






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