Ethical Issues and the Current Code of Ethics for Management Accountants-Are They Compatible?

Abstract

In recent years, ethics in business has become a much discussed topic. The bank failures, insider trading, and other scandals have led many to believe that there has been a decline in the morals and ethics of people in government, business, and even religion. While the instances of unethical behavior may or may not be indicative of an overall breakdown in the moral and ethical standards of our system of business and professions, it does indicate that we need to reevaluate our ethical standards on a continuing basis. Because professionals in business serve a varied public-stockholders, employees, customers, they have an obligation to serve the public interest. Therefore, ethics must be an ongoing and integral part of a profession's culture. Management accountants, as business professionals, serve a di verse public and therefore have an obligation to maintain the highest standards of ethical conduct. In recognition of this obligation, in 1983 the National Association of Accountants (NAA) and the Institute of Management Accountants (IMA) adopted a code of ethics for management accountants. This code of ethics, currently in force, provides general guidance concerning Competence, Confidentiality, Integrity, and Objectivity to management accountants. The current code of ethics is a valuable tool for improving the ethical atmosphere of management accounting and management accountants. The code provides a degree of stability and consistency in ethical decision making in the management accounting profession. However, the current code of ethics is not comprehensive (as no code can ever be) to meet every ethical situation confronting the profession. In the past, three research studies identified some of the key elements of a code of ethics for management accountants. In this paper, we compare the results of these three studies with the current