A.S. FlemingFall 2010 Acct 431 – Cost Management "Ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right

A.S. Fleming Fall 2010

Acct 431 – Cost Management

"Ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right and wrong.

It is the application of values to decision making. These values include honesty, fairness, responsibility, respect

and compassion."

Rushworth KidderPresident, Instiutute for Global Ethics



Every art, and every science reduced to a teachable form, and in like manner every

action and moral choice, aims, it is thought, at some good: for which reason

a common and by no means a bad description of the Chief Good is, “that

which all things aim at”.

-- Aristotle



Surely then, even with reference to actual life and conduct, the knowledge of it must have great weight; and like archer, with a mark in view, we shall be more likely to

hit upon what is right: and if so, we ought to try to describe, in outline at least, what

it is…

-- Aristotle



Well then, since this uses all the other practical sciences, and moreover lays

down rules as to what men are to do, and from what to abstain, the End of this must include the Ends of the rest, and so must

be The Good of Man.

-- Aristotle



“Honest stands at the gate and knocks, and bribery enters in” – Barnabe Rich

“The accomplice to the crime of corruption is frequently our own indifference” – Bess Myerson



Question: “Do you believe in the devil? You know, a supreme evil being dedicated to the temptation, corruption, and destruction of man?”

Response: “I’m not sure that man needs the help.” – Calvin & Hobbs



“Power corrupts. Knowledge is power. Study hard. Be evil.” – anonymous



Ethics and Moral Psychology…

Religious Question:

Do you have an obligation to improve society to get into Heaven? If you fail, does everybody go to Hell?

Or

Do you have to obey individual rules to get into heaven?



Consequentialists• morally right choices increase the “good”

• often a “black or white” approach

• The greater good may hurt the individual

A Societal or Group Approach

E.g., Old Testament, Prescribed Destruction of Sodom and Gomorrah




Deontologists• agent centered

• intention focused

• obligation or duty based

• golden rule

An Individual Approach

E.g., Old Testament, Prescribed Destruction of Sodom and Gomorrah…but if you find 10 good men?




IMA’s Statement of Ethical Professional Practice…

Model For Compliance With Section 404 of The Sarbanes-Oxley Act of 2002

http://www.imanet.org/ima/sec.asp?TRACKID=&CID=84&DID=119

Members of IMA shall behave ethically.

A commitment to ethical professional practice includes overarching principles that express our values, and standards that guide our conduct.



IMA’s Statement of Ethical Professional Practice https://www.imanet.org/about_ethics_statement.asp

IMA’s overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility.

Members shall act in accordance with these principles and shall encourage others within their organizations to adhere to them.

IMA’s Principles…



IMA’s Standards…

I. Competence

II. Confidentiality

III. Integrity

IV. Credibility




Each member has a responsibility to:

1. Maintain an appropriate level of professional expertise by continually developing knowledge and skills. 2. Perform professional duties in accordance with relevant laws,

regulations, and technical standards. 3. Provide decision support information and recommendations that

are accurate, clear, concise, and timely. 4. Recognize and communicate professional limitations or other

constraints that would preclude responsible judgment or successful performance of an activity.

I. Competence …




II. Confidentiality …


1. Keep information confidential except when disclosure is authorized or legally required.2. Inform all relevant parties regarding appropriate use of confidential information. Monitor subordinates’ activities to ensure compliance. 3. Refrain from using confidential information for unethical or illegal advantage.




III. Integrity …


1. Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.

2. Refrain from engaging in any conduct that would prejudice carrying out duties ethically.

3. Abstain from engaging in or supporting any activity that might discredit the profession.




IV. Credibility …


1. Communicate information fairly and objectively. 2. Disclose all relevant information that could reasonably be expected to

influence an intended user’s understanding of the reports, analyses, or recommendations.

3. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or

applicable law.




Resolution of Ethical Conflict …

In applying the Standards of Ethical Professional Practice, you may encounter problems identifying unethical behavior or resolving an ethical conflict.

When faced with ethical issues, you should follow your organization’s established policies on the resolution of such conflict.

If these policies do not resolve the ethical conflict, you should consider the following courses of action:




1. Discuss the issue with your immediate supervisor except when it appears that the supervisor is involved. In that case, present the issue to the next level.

If you cannot achieve a satisfactory resolution, submit the issue to the next management level. If your immediate superior is the chief executive officer or equivalent, the acceptable reviewing authority may be a group such as the audit committee, executive committee, board of directors, board of trustees, or owners.

Contact with levels above the immediate superior should be initiated only with your superior’s knowledge, assuming he or she is not involved.

Communication of such problems to authorities or individuals not employed or engaged by the organization is not considered appropriate, unless you believe there is a clear violation of the law.





2. Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics Counselor or other impartial advisor to obtain a better understanding of possible courses of action.

3. Consult your own attorney as to legal obligations and rights concerning the ethical conflict.





IMA Ethics Help Line …

The Institute of Management Accountants offers an ethics helpline service.

Members of IMA and other financial professionals may contact this helpline for free, confidential guidance on ethical issues.

Please call 1-800-245-1383 for this service.

After a preliminary discussion of the problem to determine the kind of ethics matter being reported, an ethics counselor will respond to the caller. Confidentiality is maintained at all times.

The counselor will not provide a specific resolution but will explain how the dilemma relates to the provisions of IMA’s Statement of Ethical Professional Practice.

The Purpose Is To Provide Guidance To Those That Find Themselves In An Ethical Dilemma

https://www.imanet.org/about_ethics_helpline.asp

Documents

A.S. FlemingFall 2010 Acct 431 – Cost Management "Ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right