Chapter 1, Problem 1.9SE

Identify ethical standards violated (Learning Objective 4)

ETHICS

For each of the situations listed, identify the primary standard from the IMA Statement of Ethical Professional Practice that is violated (competence, confidentiality, integrity, or credibility.) Refer to Exhibit 1–7 for the complete standard.

1. a. Jack, an accountant for a smartphone manufacturer, told his friends about a new model of smartphone being released by the company in the following quarter. For competitive reasons, the company keeps its models shrouded in secrecy until the release date.
2. b. The CFO directed that certain expenses be reclassified as assets, so that target profit could be achieved. The CFO rationalized that jobs would be saved by reaching the targeted income figures.
3. c. Even though Meagan’s company is adopting a new ERP system that impacts the accounting system, Meagan (a management accountant) has not completed the required ERP training from the vendor.
4. d. Oliver provides an analysis of the profitability of a company-owned store that is managed by Oliver’s best friend, Bob. Oliver neglects to include allocated fixed costs in Bob’s report. If Oliver includes those allocated fixed costs, the store will show a loss and Bob’s job could be in danger.
5. e. Yimeng, a purchasing agent for her company, received two tickets from a supplier to the upcoming Ohio State versus University of Michigan football game. These tickets sell for over $500 each.