Identify Ethical Standards Violated
1. In a casual conversation with friends on a Friday night, Peter talks about how
transfer prices are set at the firm where he is an accountant. As part of that
conversation, he shares the variable costs of the company’s main product.
2. Jake, the controller who oversees transfer policies at Nealy Industries, fails to inform
management that his sister is the senior partner in a consulting firm that is bidding for
work at Nealy Industries.
3. At the year-end report to the board of directors, Connor, the controller, prepares the performance report. The board will base annual bonuses on this report. Connor designs the report so that favorable Key Performance Indicators (KPIs) are prominently
displayed, while unfavorable KPIs are not included or are hidden in the back pages of
the report so they are unlikely to be seen.
4. Each month, Kate, a corporate controller, prepares segment reports for all divisions
of her company. In these reports, she includes all general ledger accounts. As a result,
each division’s report is several pages long and no one except Kate and her staff can
interpret the reports.
5. In the six years since he graduated with an accounting degree, Phil has not attended
any continuing education seminars. An important part of Phil’s job involves everything from preparing performance reports. He has realized that he knows enough to do his
job and has not forgotten any relevant information from his university syllabus.
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For each of the situations listed, identify the main standard of the IMA Statement of
Professional Ethics that is violated (competence, confidentiality, integrity or credibility).
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