Appendix B:

The IMA Code of Conduct for Management Accountants

Practitioners of management accounting and fi nancial management have an obliga-tion to the public, their profession, the organization they serve, and themselves, to maintain the highest standards of ethical conduct. In recognition of this obligation, the Institute of Management Accountants (IMA) has promulgated the following stan-dards of ethical conduct for practitioners of management accounting and fi nancial management. Adherence to these standards internationally is integral to achieving the objective of management accounting.

Competence

Practitioners of management accounting and fi nancial management have a respon-sibility to:

• Maintain an appropriate level of professional competence by ongoing development of their knowledge and skills.

• Perform their professional duties in accordance with relevant laws, regulations, and technical standards.

• Prepare complete and clear reports and recommendations after appropriate analy-sis of relevant and reliable information

Confi dentiality

Practitioners of management accounting and fi nancial management have a respon-sibility to:

Accounting Ethics, Second Edition. Ronald Duska, Brenda Shay Duska, and Julie Ragatz

© 2011 John Wiley & Sons, Ltd. Published 2011 by John Wiley & Sons, Ltd. ISBN: 978-1-405-19613-0

Appendix B 231

• Refrain from disclosing confi dential information acquired in the course of their work except when authorized, unless legally obligated to do so.

• Inform subordinates as appropriate regarding the confi dentiality of information acquired in the course of their work and monitor their activities to assure the maintenance of that confi dentiality.

• Refrain from using or appearing to use confi dential information acquired in the course of their work for unethical or illegal advantage either personally or through third parties.

Integrity

Practitioners of management accounting and fi nancial management have a respon-sibility to:

• Avoid actual or apparent confl icts of interest and advise all appropriate parties of any potential confl ict.

• Refrain from engaging in any activity that would prejudice their ability to carry out their duties ethically.

• Refuse any gift, favor, or hospitality that would infl uence or would appear to infl u-ence their actions.

• Refrain from either activity or passively subverting the attainment of the organiza-tion ’ s legitimate and ethical objectives.

• Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.

• Communicate unfavorable as well as favorable information and professional judg-ment or opinion.

• Refrain from engaging [in] or supporting any activity that would discredit the profession.

Objectivity

Practitioners of management accounting and fi nancial management have a respon-sibility to:

• Communicate information fairly and objectively. • Disclose fully all relevant information that could reasonably be expected to infl u-

ence an intended user ’ s understanding of the reports, comments, and recommen-dations presented.

232 Appendix B

Resolution of Ethical Confl icts

In applying the standards of ethical conduct, practitioners of management accounting and fi nancial management may encounter problems in identifying unethical behavior or in resolving an ethical confl ict. When faced with signifi cant ethical issues prac-titioners of management accounting and fi nancial management should follow the established policies of the organization bearing on the resolution of such confl ict. If these policies do not resolve the ethical confl ict, such practitioner should consider the following course of action.

• Discuss such problems with the immediate superior except when it appears that superior is involved, in which case the problem should be presented to the next higher managerial level. If a satisfactory resolution cannot be achieved when the problem is initially presented, submit the issue to the next higher managerial level.

• If the immediate superior is the chief executive offi cer or equivalent, the acceptable reviewing authority may be a group such as the audit committee, executive com-mittee, board of directors, board of trustees, or owners. Contact with a level above the immediate superior should be initiated only with the superior ’ s knowledge, assuming the superior is not involved. Except where legally prescribed, communi-cation of such problems to authorities or individuals not employed or engaged by the organization is not considered appropriate.

• Clarify relevant ethical issues by confi dential discussion with an objective adviser to obtain a better understanding of possible course of action.

• Consult your own attorney as to legal obligations and rights concerning the ethi-cal confl ict. If the ethical confl ict still exists after exhausting all levels of internal review, there may be no other recourse on signifi cant matters than to resign from the organization and to submit an informative memorandum to an appropriate representative of the organization. After resignation, depending on the nature of the ethical confl ict, it may also be appropriate to notify other parties.