Question

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.)

		Primary
	Situation	Standard Violated
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.
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.
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.
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.
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.

Answer 1

Requirement a:

In this case the accountant has violated the confidentiality standard as he disclosed confidential information to his friend.

Requirement b:

The directions of CFO to reclassify expenses as assets to save jobs amounts to cooking the books and violates the integrity standard.

Requirement c:

The management accountant is supposed to complete the ERP training to handle the new ERP system that the company is transitioning to. But she failed to complete the training and therefore violated professional competence standard.

Requirement d:

In this case, the omission of fixed costs in profitability analysis to show a better picture of the store is violative of credibility standard as he fails to communicate the information objectively.

Requirement e:

The actions of purchasing agent violate integrity standard because the acceptance of tickets from a supplier amounts to conflict of interest.