Paper Example: Overriding Principles under the IMA

As a component of business, ethics in accounting ensures that financial managers make the right decisions with finances, according to the stipulated procedures of the organization. These procedures uphold the practices the firm undertakes while handling the accounting records. As a member of the Institute of Management Accounting, business managers have the responsibility to comply with and uphold the standards of Competence, Confidentiality, Integrity, and Credibility. Failure to comply may result in disciplinary action. These standards and added principles of honesty, fairness, objectivity, and responsibility ensure the right decisions are made in organizational resource management.

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Stakeholders affected by Marcus' Actions

Marcus actions have affected many stakeholders. As the cost accountant, he unethically approves a false cost analysis for the company equipment, thereby altering the company's actual financial capabilities. The organization thus may fail to have a real reflective piece about its assets and liabilities. When he agrees to make false entries about the costs of products, Marcus' integrity has been bought by his colleague Ray, further undermining Marcus to unethical management standards. Not only is the organization affected but also its relationship with employees who may find it reasonable to manipulate information. Other stakeholders likely to be affected by Marcus dishonesty include the organization's supply chain personnel.

Marcus Ethical Obligations to the Company

Marcus' ethical obligations to the company include maintaining an appropriate level of professional leadership and expertise by enhancing knowledge and skills, keeping the information confidential except when disclosure is authorized or legally required, mitigating actual conflicts of interest. To his friend, he has the obligation to maintain regular communication practice to prevent possible conflicts of interest, advise all parties of any potential conflicts of interest while passing information fairly and objectively, according to the standards of the IMA. However, Marcus fails to honor these ethical obligations leading to the compromise of the firm against performing its accounting roles according to the set standards.

Standards Marcus Violated

According to the IMA Statement of Ethical Professional Practice, Marcus would have violated the standards of credibility, integrity, competence, and confidentiality if he chose to go along with Ray's request. Specifically, Marcus fails to honor the rules of privacy when a group of employees becomes knowledgeable of the costs of equipment hence this action leads to the compromise of his integrity as an accountant. He also lacks both credibility and competence as the core ethical standards when he considers manipulating costs of machines to favor his friend Ray. Besides, Marcus lacks confidentiality for his management practice goes against the ethical standards set by IMA in protecting the firms against any form of breach by the employees.

How Marcus Could Help the Friend by Holding Ethical Obligations

In the case study, Marcus could help his friend yet uphold his ethical obligations in many ways. By engaging his friend's supervisor into a discussion about the possible ways of solving the issue ethically, plausible strategies would be discussed between Marcus and the friend. If this fails to provide a solution, Marcus may advise his friend to seek the services of an attorney, and manage the issue professionally. Besides, it is possible to call the IMA helpline and request how vital elements of the IMA Statement of Ethical Professional Practice could be applied to the ethical issue.