Chapter 12, Problem 12.16SE

Identify ethical standards violated (Learning Objectives 1, 2, 3, 4, & 5) 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. Luciana accepts a kickback payment from a contractor to make sure that the contactor’s bid is accepted.
2. b. Ben is a staff accountant. He has recently been moved into a position where he will be working on capital budgeting proposals. Ben does not know how to make an NPV calculation, but he does not take the steps to acquire the skills. He figures he can use ARR and payback for investment analysis instead.
3. c. Dania does not include an estimate of maintenance costs associated with a new computer system. She knows that her department needs the computer system. If the maintenance costs were included in the estimate, the computer system purchase might not be approved.
4. d. Gordon is anxious to impress his date, Laura. Laura works in Purchasing, while Gordon works in Accounting. When they start talking about people they work with, Gordon shares salary information about each person.
5. e. Emmanuel’s company is in negotiations to purchase one of its suppliers. Emmanuel, a management accountant, does not disclose that his mother is a major stockholder of the supplier.