Content area
Full Text
Recent corporate financial scandals-Enron, WorldCom, and others-damaged accounting's image, but IMA's Standards of Ethical Conduct can provide guidance for future ethical dilemmas.
IN RECENT YEARS accountants and the profession have come under fire as a result of breakdowns and misdeeds in the financial reporting process. An apparent lack of ethical behavior exhibited by decision makers forms a core area of concern.
The predominantly negative media coverage of the financial and accounting activities of Enron, Tyco, WorldCom, Adelphia, and other U.S. companies has been exhaustive. Thanks to this barrage of negative images, it is probable that many observers of the profession think that the reputation of financial professionals has been damaged irreparably-that it's unsuitable to use the terms "ethical" and "accountant" in the same sentence. What's more, the potential exists for this image to become even more magnified if we don't attempt to restore confidence in the financial reporting process and trust in finance professionals.
One starting point in developing a case for public trust in our profession is to consider how ethical perspectives have been breached in the past and how to avoid these violations in the future. The Institute of Management Accountants' (IMA) "Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management" convey how ethical behavior should be practiced in the profession. In these Standards, IMA has identified areas of ethical professional conduct for its members. They are competence, confidentiality, integrity, and objectivity. As shown in the above table, IMA delineates the professional's responsibilities in each of these four areas.
These Standards are one of the most important, powerful, and positive tools available to financial professionals in communicating the importance of ethical conduct as part of our professional responsibilities. We discuss this point and describe how members can also use the Standards to better understand the ethical dimensions of past abusive practices that were reported in the media.
A FRAMEWORK FOR ETHICAL CONDUCT
The IMA Standards of Ethical Conduct are designed to be proactive, helping finance professionals to link ethical perspectives directly to their ongoing workplace responsibilities. In a perfect world, IMA members would employ these Standards in their professional lives, and there would be little or no notice of this by the general public. Given the barrage of reported...