Management Accountants must act ethically. They must respect and maintain suitable professional images of the highest standards of ethical responsibility.
We know first of all what ethics is before we know about the ethical responsibilities of management accountants?
Ethics means doing the right thing and the legal thing, rather than merely obeying the law.
There is a code of conduct for many companies that help guide their employees. The Institute of Management Accountants (IMA) has established four (4) codes of professional, ethical conduct, which are as follows:
Ethical Responsibilities of Management Accountants
1. Competence:
Management Accountants are responsible for carrying out their professional duties in compliance with the applicable laws & regulations and keeping up to date with new developments or changes affecting accounting practice.
Management accountants are responsible for preparing full and consistent reports and recommendations after proper review of appropriate and accurate information.
It is the ethical responsibility of management accountants to Identify and convey professional limits or other limitations that may prohibit an operation’s effective execution or informed decision.
2. Confidentiality:
For any business, the information is susceptible. Competitors always want to know business profitability information, price information, cost information, etc. Management accountants shall not disclose confidential information except where required by law.
When required, remind subordinates of the confidentiality of the information obtained during their work and monitor their actions to ensure that privacy is protected.
Therefore maintaining the confidentiality of business information is one of the management accountant’s primary ethical responsibilities.
3. Integrity:
It is the responsibility of management accountants, either actively or passively, to avoid distorting legitimate and ethical objectives from organizations and to provide favorable and unfavorable information and professional judgments and opinions.
Management accountants are liable for denying any gift, favor, or hospitality that would affect or tend to influence their actions.
Management Accountants abstain from participating in or encouraging any practice that could undermine the profession.
4. Objectivity:
Management Accountants should disclose in full any relevant information that would likely influence their understanding of reports, comments, and recommendations by the intended user.
Management Accountants should never engage in actions that violate ethical standards and should never ignore others’ stories in their companies.
You may also read:
- What is Management Accounting? and Its Functions
- What are the objectives of Management Accounting?
- Difference between Cost Accounting and Management Accounting
- Difference between Financial Accounting and Management Accounting
