IMA Code Of Ethics Case Study

Molly McDale is the controller for Robert’s Manufacturing. It is a small company that manufactures plastic lumber. The head of the company, owner and CEO, Frank Roberts reviews the projected operating income for the year. If the operating income is bellow $200,000 then the company will not give out holiday bonuses to their employees, which includes Molly. Molly feels she has worked hard and earned a bonus. She helped implement several cost saving programs and worked long days without receiving overtime pay. Also noted is the fact that several factory employees are struggling and the holiday bonuses would serve them well. She has decided to change the calculation of manufacturing overhead based on direct labor hours to machine hours used.

Creditability for the IMA standards has three parts to it, 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. Molly broke the ethical code of credibility when she changed the calculation of manufacturing overhead to based on machine hours. She was not objective with her data; she didn’t disclose the relevant information that was asked of her. She changed the calculation because the original would influence Mr. Robert’s. McDale’s responsibilities as a management accountant when considering the IMA standards of ethical principal are very simple. Her job is to completely comply and abide to the rules based on competence, confidentiality, integrity, and credibility. If she steers away from these rules she will be violating the ethical code. And as an accountant you must be completely accurate, honest, capable, and confidential with the data you provided. Unfortunately, she did not follow these codes and broke the IMA standard of ethical