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Business Accounting EBK COST ACCOUNTING

1. Professional Ethics A set of principles and standards are introduced under the ethical professional practice. The principles include honesty, fairness, objectivity, and responsibility. The standards are competence, confidentiality, integrity, and credibility. According to the International Management Accountants , members should comply with and act in accordance with the principles and the standards otherwise a disciplinary action is taken. To state: The ethical dilemma of W. Answer: The given circumstance suggests that W’s current ethical dilemma is integrity, competence, and credibility. The ethical duties of W anticipate to minimize actual conflicts of interest and to communicate regularly with business associates to avoid apparent conflicts of interest. W should perform duties ethically and inform the concerned parties for any potential conflict of interest. W should provide accurate and timely information in compliance with all relevant laws, regulations, and technical standards. Explanation: Apart from ethical dilemma, W should not agree with L because as per standards mentioned by IMS for ethical behaviors, the damaged inventory should not be classified and included in the regular inventory. Reclassification of damaged inventory as regular inventory will impact the understanding of potential users and results in false analysis of financial statements. Conclusion: Hence, the ethical dilemmas of W are discussed above. 2. To state: The action to be taken by W, if L gives a direct order to reclassify the cost. Answer: W should first discuss the matter with L and if the matter does not resolve, then it can be carried to the next management level. W can also take the help of IMA’s ethical counselor to deal with this unethical situation. Explanation: In spite of receiving order from the president of the division manager to reclassify the damaged inventory as regular inventory, she should carry out her duties on ethical and moral ground as it is more important to being ethical than to achieve division’s goals. Conclusion: Hence, the possible action is discussed above.

1. Professional Ethics A set of principles and standards are introduced under the ethical professional practice. The principles include honesty, fairness, objectivity, and responsibility. The standards are competence, confidentiality, integrity, and credibility. According to the International Management Accountants , members should comply with and act in accordance with the principles and the standards otherwise a disciplinary action is taken. To state: The ethical dilemma of W. Answer: The given circumstance suggests that W’s current ethical dilemma is integrity, competence, and credibility. The ethical duties of W anticipate to minimize actual conflicts of interest and to communicate regularly with business associates to avoid apparent conflicts of interest. W should perform duties ethically and inform the concerned parties for any potential conflict of interest. W should provide accurate and timely information in compliance with all relevant laws, regulations, and technical standards. Explanation: Apart from ethical dilemma, W should not agree with L because as per standards mentioned by IMS for ethical behaviors, the damaged inventory should not be classified and included in the regular inventory. Reclassification of damaged inventory as regular inventory will impact the understanding of potential users and results in false analysis of financial statements. Conclusion: Hence, the ethical dilemmas of W are discussed above. 2. To state: The action to be taken by W, if L gives a direct order to reclassify the cost. Answer: W should first discuss the matter with L and if the matter does not resolve, then it can be carried to the next management level. W can also take the help of IMA’s ethical counselor to deal with this unethical situation. Explanation: In spite of receiving order from the president of the division manager to reclassify the damaged inventory as regular inventory, she should carry out her duties on ethical and moral ground as it is more important to being ethical than to achieve division’s goals. Conclusion: Hence, the possible action is discussed above.

EBK COST ACCOUNTING

EBK COST ACCOUNTING

15th Edition

ISBN: 9780133812763

Author: Rajan

Publisher: VST

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Chapter 1, Problem 1.25E

Chapter 1, Problem 1.27P

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EBK COST ACCOUNTING

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