8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Study Guide
Principles and Standards of Professional Ethics

I. Keep It Personal
A. In addition to improving our ethical skills, we need to also stay energized about our personal commitment to ethics. Many professionals find that when
presented with difficult decisions that challenge ethics at a very personal level, the personal commitment needed to make the hard decision can be
energized by asking oneself the following question: Would the person you most love and admire be proud to watch the decision you're about to make?
B. Evidence of your commitment to ethics is tied very closely to your “personal brand.” Organizations spend significant resources to guard and strengthen
their brand in the marketplace. As a business professional, you have a personal brand. A single decision, for good or bad, can have an incredible and
long-lasting impact on your personal brand.
C. Remember that “Perception = Reality.” Not only do you need to make ethically based decisions, but the ethics in your decisions must to be clear to others
around you. Like it or not, the perception that others have of you as an ethically-based professional matters very much, despite any argument you might
want to make that your ethics are not being perceived correctly. Hence, be sure that the ethics in your decisions and actions are clear for others to see.
II. IMA Statement of Ethical Professional Practice—Principles
A. The IMA (Institute of Management Accountants) has an important brand, and continually invests significant resources to strengthen that brand across the
world. An important element of the IMA brand is represented in explicit principles and standards of professional ethics as described in the IMA Statement
of Ethical Professional Practice.1 This statement is available on the IMA website.
B. IMA members are expected to fully comply with the IMA Statement of Ethical Professional Practice. The IMA Statement distinguishes between two
separate but related views on professional ethics:
1. Overarching principles that express ethical values, and
2. Specific standards that guide ethical conduct.
C. The IMA Statement lists four overarching ethical principles to guide member conduct. These principles with specific descriptions follow below.
1. Honesty. IMA members should be honest and truthful in their professional communication and in their professional analysis and work.
2. Fairness. IMA members should be fair and balanced, without favoritism, in their professional work and decisions involving other colleagues and
stakeholders.
3. Objectivity. IMA members’ analysis and decision making should be reasoned, thorough, and dispassionate.
4. Responsibility. IMA members are responsible to comply with and uphold the standards of Competence, Confidentiality, Integrity, and Credibility.
D. Note that the last IMA guiding principle, Responsibility, is the bridge to the IMA's standards of ethical conduct.
III. IMA Statement of Ethical Professional Practice—Standards
A. After listing the four overarching principles, the IMA Statement then describes four specific standards of ethical conduct. These standards are crucial as
failure to comply may result in disciplinary action by the IMA. Each of these standards is detailed across several specific aspects of the standard.
B. The first IMA standard of conduct is Competence. IMA members with ethical competence will demonstrate the following specific characteristics.
1. Maintain an appropriate level of professional leadership and expertise by enhancing 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. Recognize and help manage risk.
C. The second IMA standard of conduct is Confidentiality. IMA members who take an ethical approach to confidentiality will engage in the following
processes.
1. Keep information confidential except when disclosure is authorized or legally required.
2. Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.
3. Refrain from using confidential information for unethical or illegal advantage.
D. The third IMA standard of conduct is Integrity. IMA members who have integrity in their conduct are committed to the following professional practices.
1. Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of
any potential conflicts of interest.
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.
4. Contribute to a positive ethical culture and place integrity of the profession above personal interests.
E. The fourth and final IMA standard of conduct is Credibility. IMA members who are credible in their conduct will be observed to do the following actions.
1. Communicate information fairly and objectively.
2. Provide all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or
recommendations.
3. Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or
applicable law.
4. Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
F. A careful study of the specifics involved in each IMA standard of professional ethics, and a candid assessment of one's personal practice with respect to
these standards, will help finance and accounting professionals better assess specific situations to directly recognize and successfully respond to ethical
conflicts.

Practice Question
You have recently been hired as an accountant for the largest residential construction company in the state. Your primary responsibility is to track costs for each
home being constructed. Tracking the costs for direct materials and direct labor is relatively straightforward. Accounting for manufacturing overhead costs, on the
other hand, presents a challenge. The company's current practice is to allocate overhead costs on the basis of direct labor hours. As a result, larger houses that
require more labor construction time are allocated a larger share of the overhead. While larger homes do tend to require more management and engineering
design support, this is not always true. Hence, you've been working on an activity-based costing system to improve the overhead cost assignment process.
Your company was recently selected by the state to build a number of low-income housing complexes. The state has agreed to an arrangement whereby it will pay
costs plus a 10% profit margin. Construction of these low-income housing units will be relatively simple. These smaller buildings are based on a straightforward
design used consistently for each house. Compared to the average house the company builds for the open market, these government project houses will require
substantially less management and engineering support.

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At a meeting following the granting of the construction contract by the state, the production supervisor proposes the following idea:

Since the state has agreed to pay our costs plus 10%, the higher the costs on the project, the more money we make. What we need to do is funnel as much
overhead cost as we reasonably can to this low-income housing project. Now I don't want anyone to think I am proposing something unethical. I am not
saying that we should charge the state for fictitious costs. I'm simply proposing that we allocate overhead cost on a per-house basis with each house,
regardless of size, being allocated the same amount of overhead.

As the cost accountant for the company, it is clear to you (and you believe it is clear to everyone else) that allocating overhead costs as a constant amount per
house instead of per direct labor hour will shift a substantial amount of overhead in the organization from the company's core-product homes that are priced
competitively in the open market to the government-project homes that are priced based on cost. This approach would be a significant misrepresentation of how
overhead costs are actually created in the organization. If this cost assignment proposal goes forward, you will be the one expected to design and deploy the new
system. You can see that most in attendance at the meeting are being persuaded by the production supervisor's idea.

The IMA Statement of Ethical Professional Practice provides very specific aspects of ethical conduct for each of its four standards of behavior. Carefully consider
those aspects in light of this scenario, and indicate for each aspect if it applies to the scenario. More specifically, your determination can be one of three levels: (1)
Clearly applies, (2) Maybe applies, and (3) Does Not apply.
Answer:

(Note that this is a subjective analysis. Be sure that you understand your response in comparison to the suggested solution below.)

A. Competence
Not 1. Maintain an appropriate level of professional leadership and expertise by enhancing knowledge and skills.
Maybe 2. Perform professional duties in accordance with relevant laws, regulations, and technical standards.
Clearly 3. Provide decision support information and recommendations that are accurate, clear, concise, and timely. Recognize and help manage risk.

B. Confidentiality
Not 1. Keep information confidential except when disclosure is authorized or legally required.
Not 2. Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.
Maybe 3. Refrain from using confidential information for unethical or illegal advantage.

C. Integrity
Maybe 1. Mitigate actual confilicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of
any potential conflicts of interest.
Clearly 2. Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
Clearly 3. Abstain from engaging in or supporting any activity that might discredit the profession.
Clearly 4. Contribute to a positive ethical culture and place integrity of the profession above personal interests.

D. Credibility
Clearly 1. Communicate information fairly and objectively.
Clearly 2. Provide all relevant information that could resonably be expected to influence an intended user's understanding of the reports, analyses, or
recommendations.
Maybe 3. Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or
applicable law.
Not 4. Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.

Summary
It is crucial that we teach, learn, and improve our ability to specifically recognize and successfully address a variety of ethical challenges and conflicts in business.
The IMA Statement of Ethical Professional Practice provides valuable guidance on principles and standards of ethics that can help IMA members better practice
their ethical values as business professionals. IMA principles describe the specific values that should describe IMA members who are committed to be ethical
professionals. These four principles are Honesty, Fairness, Objectivity, and Responsibility. The IMA Statement then goes on to specifically describe four standards
that should guide the ethical conduct of IMA members. These standards are Competence, Confidentially, Integrity, and Credibility. Each of these standards has
very specific aspects that should be understood and thoughtfully considered in addressing all business processes, analyses, and decisions.

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Flashcards
Principles and Standards of Professional Ethics

1
FC.ps.prof.ethics.FC002_1709
Difficulty: N/A

What are the four overarching ethical principles described in the IMA
Statement of Ethical Professional Practice? Honesty
Fairness
Objectivity
Responsibility

2
FC.ps.prof.ethics.FC003_1709
Difficulty: N/A

What are the four specific standards of ethical conduct described in

the IMA Statement of Ethical Professional Practice? Competence
Confidentiality
Integrity
Credibility

3
FC.ps.prof.ethics.FC004_1709

Describe how IMA members uphold the principle of Honesty as To uphold the principle of Honesty, IMA members should be honest
described in the IMA Statement of Ethical Professional Practice. and truthful in their professional communication and in their
professional analysis and work.

4
FC.ps.prof.ethics.FC005_1709
Difficulty: N/A

Describe how IMA members uphold the principle of Fairness as To uphold the principle of Fairness, IMA members should be fair and
described in the IMA Statement of Ethical Professional Practice. balanced, without favoritism, in their professional work and decisions
involving other colleagues and stakeholders.

5
FC.ps.prof.ethics.FC006_1709
Difficulty: N/A

Describe how IMA members uphold the principle of Objectivity as To uphold the principle of Objectivity, IMA members’ analysis and
described in the IMA Statement of Ethical Professional Practice. decision-making should be reasoned, thorough, and dispassionate.

6
FC.ps.prof.ethics.FC007_1709
Difficulty: N/A

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Describe how IMA members uphold the principle of Responsibility as To uphold the principle of Responsibility, IMA members are
described in the IMA Statement of Ethical Professional Practice. responsible to comply with and uphold the standards of Competence,
Confidentiality, Integrity, and Credibility.

7
FC.ps.prof.ethics.FC008_1709
Difficulty: N/A

Describe how IMA members uphold the standard of Competence as Maintain an appropriate level of professional leadership and
described in the IMA Statement of Ethical Professional Practice. expertise by enhancing knowledge and skills.
Perform professional duties in accordance with relevant laws,
regulations, and technical standards.
Provide decision support information and recommendations
that are accurate, clear, concise, and timely. Recognize and help
manage risk.

8
FC.ps.prof.ethics.FC009_1709
Difficulty: N/A

Describe how IMA members uphold the standard of Confidentiality as

Keep information confidential except when disclosure is
described in the IMA Statement of Ethical Professional Practice.
authorized or legally required.
Inform all relevant parties regarding appropriate use of
confidential information. Monitor to ensure compliance.
Refrain from using confidential information for unethical or
illegal advantage.

9
FC.ps.prof.ethics.FC010_1709
Difficulty: N/A

Mitigate actual conflicts of interest. Regularly communicate with

Describe how IMA members uphold the standard of Integrity as business associates to avoid apparent conflicts of interest.
described in the IMA Statement of Ethical Professional Practice. Advise all parties of any potential conflicts of interest.
Refrain from engaging in any conduct that would prejudice
carrying out duties ethically.
Abstain from engaging in or supporting any activity that might
discredit the profession.
Contribute to a positive ethical culture and place integrity of the
profession above personal interests.

10
FC.ps.prof.ethics.FC011_1709

Communicate information fairly and objectively.

Provide all relevant information that could reasonably be
Describe how IMA members uphold the standard of Credibility as
expected to influence an intended user's understanding of the
described in the IMA Statement of Ethical Professional Practice.
reports, analyses, or recommendations.
Report any delays or deficiencies in information, timeliness,
processing, or internal controls in conformance with
organization policy and/or applicable law.
Communicate professional limitations or other constraints that
would preclude responsible judgment or successful performance
of an activity.

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Test Bank Questions

Principles and Standards of Professional Ethics

Question 1

2.F.2.c
cma11.p2.t1.me.0096_0820

Which standard in IMA's “Statement of Ethical Professional Practice” states that financial management professionals should not engage in activities that might
discredit the profession?

*Source: Retired ICMA CMA Exam Questions.

Integrity

Confidentiality

Competence

Credibility

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Question 2

2.F.2.a
cma11.p2.t1.me.0098_0820
The IMA's overarching ethical principles include all of the following, except:
Honesty

Fairness

Competence

Objectivity

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Question 3

2.F.2.c
tb.ei.fraud.006_1805
To resolve potential ethical issues within an organization, management has recently instituted an ethics hotline. As part of submitting complaints, all employees
must list their department, their name, and their complaint. Is this in compliance with the IMA Statement of Ethical Professional Practice?
No, although an ethics hotline is a proven tool to help offset ethical issues, any submissions to the hotline should be anonymous in nature.

Yes, setting up an ethics hotline is one of the recommended steps that organizations can use to help address ethical issues.
No, an ethics hotline is not a proven method to help employees address potential ethical issues within an organization, so this would not be a solution in this
case.
Yes, ethics hotlines provide a guarantee that unethical behavior will not occur within the organization.

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Question 4

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tb.ei.fraud.056_1805
As more and more organizations introduce robotics and automation in the accounting and financial reporting processes, there are many positive and negative
outcomes associated with this trend. What is a possible implication that could lead to a violation of the ethical principle of competence?
The only competence issue that might be involved through increased automation and digitization of the accounting process is the training required to use
these robotic tools.
One significant way that the increased integration of robotics could negatively impact accounting competency would be if accountants feel they no longer
need to remain up to date and informed on standards and updates.
Robotics and automation will only positively increase the competence factor linked to management accounting professionals since these tools are improving
productivity.
In an increasingly automated business environment, since robots will handle much of the technical research and analysis, there is no way that this can violate
the principle of competence.

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Question 5

2.F.2.a
tb.ps.prof.ethics.001_1712
Which of the following is one of the three characteristics related to Competence in the standards of conduct as outlined in the IMA Statement of Ethical Professional
Practice?
Provide all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or
recommendations.
Perform professional duties in accordance with relevant laws, regulations, and technical standards.

Refrain from using confidential information for unethical or illegal advantage.

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

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Question 6

2.F.2.a
tb.ps.prof.ethics.001_1805
Which of the following principles is not part of the IMA Statement of Ethical Professional Practice?
Technology integration throughout both the business and the supply chain

Honesty in conducting business

Operating in a fair and equitable manner with customers, vendors, and employees

Managing the business in a responsible manner, including stewardship of professional assets

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Question 7

2.F.2.a
tb.ps.prof.ethics.002_1712
Which of the following is one of the three characteristics related to Confidentiality in the standards of conduct as outlined in the IMA Statement of Ethical
Professional Practice?
Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

Maintain an appropriate level of professional leadership and expertise by enhancing knowledge and skills.

Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.
Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential
conflicts of interest.

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Question 8

2.F.2.b
tb.ps.prof.ethics.002_1805
Based off the IMA's Statement of Ethical Professional Practice, what is a method by which organizations can resolve ethical issues if they lack formal ethics policies?
Installing physical and information technology surveillance tools within the organization, to monitor both employees and assets.

Establishing a code of ethics is a proven method to help resolve ethical issues that may arise in an organization.

Making all employees sign a code of ethics, including a pledge to abide by the code while at the firm.

Putting into place an ethics hotline, which should be anonymous in nature, can act as method by which employees can discuss ethical issues.

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Question 9

2.F.2.a
tb.ps.prof.ethics.003_1712
Which of the following is one of the four characteristics related to Integrity in the standards of conduct as outlined in the IMA Statement of Ethical Professional
Practice?
Refrain from using confidential information for unethical or illegal advantage.

Perform professional duties in accordance with relevant laws, regulations, and technical standards.

Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.

Contribute to a positive ethical culture and place integrity of the profession above personal interests.

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Question 10

2.F.2.b
tb.ps.prof.ethics.003_1805
The IMA Statement on Ethical Professional Practice consists of a combination of ethical principles and standards to help translate these principles into practice.
Which of the following is not a component of the standard of competence?
Accounting professionals, especially CMAs, should achieve perfection in financial reporting, analysis, and managerial advice.

Financial professionals should continuously improve their skills, competencies, and leadership abilities by embracing continuing education.
Financial professionals should have the ability to consistently perform professional duties in accordance with relevant laws, regulations, technical standards,
and changing requirements.
CMAs should provide support, insight, and analysis to management and professional colleagues that is accurate, clear, concise, and timely.

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Question 11

2.F.2.a
tb.ps.prof.ethics.004_1805
Which of the following is a component of the IMA's Statement of Ethical Professional Practice as it pertains to integrity when operating in a business environment?
Forecast and accurately predict all instances of ethical misdoings, and potential unethical behavior within an organization.

All employees should sign a code of ethics. This will ensure they live by the ethical values of the organization.
To operate with integrity within an organization, management accountants should refrain for engaging in conduct that would prejudice them in carrying out
current duties.
To operate with integrity, professionals must adhere to a standard of excellence that involves making no mistakes in carrying out duties.

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Question 12

2.F.2.b
tb.ps.prof.ethics.005_1712

The president of your company has a reputation for using the company jet for personal trips, and for extending business trips in order to vacation with his family in
exotic locations. This use of company resources frustrates many of the employees. Your role in the company is to issue reimbursements to employees for business
expenses incurred during business trips. The president gives you the receipts from his most recent trip and says, “These receipts show the cost of my meals as well as
my family’s meals. Go ahead and reimburse me for all of it.” Company policy states that the expenses of family members accompanying employees on business trips
are not reimbursable.

Assuming you reimburse the entire amount, which of the following standards of conduct as outlined in the IMA Statement of Ethical Professional Practice are you
violating?

Competence

Confidentiality

Integrity

Credibility

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Question 13

2.F.2.a
tb.ps.prof.ethics.005_1805
Which of the below correctly identifies the four overarching ethical principles included in the IMA's Statement of Ethical Professional Practice?
The four pillars of the statement are honesty, fairness, responsibility, and objectivity.

The four pillars of the statement are innovation, globalization, digitization of business operations, and social media trends.

The primary components of the statement are diversity, inclusiveness, cross functional training, and internal controls.

The four pillars are sustainability initiatives, stakeholder reporting, corporate governance development, and human capital.

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Question 14

2.F.2.c
tb.ps.prof.ethics.006_1712

Scott Bestor is an accountant for Westfield Company. Early this year, Scott made a highly favorable projection of sales and profits over the next three years for
Westfield’s hot-selling computer PLEX. As a result of the projections Scott presented to senior management, the company decided to expand production in this area.
This decision led to dislocations of some plant personnel who were reassigned to one of the company’s newer plants in another state. However, no one was fired,
and in fact the company expanded its workforce slightly. Unfortunately, Scott rechecked his projection computations a few months later and found that he had
made an error that would have reduced his projections substantially. Luckily, sales of PLEX have exceeded projections so far, and management is satisfied with its
decision. A few days later, however, Scott’s manager asked him if he had reviewed his calculations and if he had found any errors. If Scott confesses the error, he
could jeopardize his possible promotion. He knows that his manager will never review the calculations and find the error.

If Scott says he did not make an error, which of the following standards of conduct as outlined in the IMA Statement of Ethical Professional Practice is most clearly
being compromised?

Fairness

Confidentiality

Objectivity

Integrity

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Question 15

2.F.2.c
tb.ps.prof.ethics.006_1805
What piece of the IMA's Statement of Ethical Professional Practice might be violated in the following situation? In order to meet short-term financial pressures, some
of the accounting team collaborates to artificially inflate the results of the business.
Clearly, this is a situation where the standard of competences has been violated.

Simply overstating the performance of the organization from a financial perspective does not constitute a violation of any known ethical standard.

Since these actions will ultimately hurt the organization and management team, the standard of loyalty has clearly been violated.

In this situation, the standard of integrity is violated due to the actions taken by the accounting professionals to overstate the performance of the firm.

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Question 16

2.F.2.c
tb.ps.prof.ethics.007_1805
Several members of the management team at a multinational organization traveled abroad to finalize an export deal with a new customer. While overseas and at a
client dinner, one member of the leadership team discloses confidential information about pending product and service launches. This information helps finalize the
deal. What is the possible ethical implication of this behavior?
While the individual business deal and transaction is not, in and of itself, a violation of ethical standards, disclosing confidential information violates the
standard of confidentiality.
Since these two organizations are already entering business together, confidential information can be passed between the two firms.

Doing business in an overseas market automatically triggers ethical investigations in many overseas markets, and this deal is no exception.

There does not appear to be any ethical violations or transactions based on the identified fact pattern.

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Question 17

2.F.2.c
tb.ps.prof.ethics.008_1805
Which of the following scenarios would best demonstrate a violation of the IMA professional standard of competence when performing business and accounting
functions?
The CFO and corporate conspire to falsify and overstate the financial results of the organization to appease shareholders.

After a particularly bad day at the office, a disgruntled employee decides to start embezzling funds with a colleague who works in the treasury department.

By using artificial intelligence programs and software, the likelihood of a competence failure moving forward is almost zero.

Due to a lack of sufficient training or education, the controller is unable to accurately review the work submitted for their review by accounting staff.

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Question 18

2.F.2.b
tb.ps.prof.ethics.009_1805
Because they hold a senior role in the financial reporting segment, an accountant has access to confidential company data. Although they provide this data to a
relative to help them with stock trades, and do not use it themselves, they have not violated the IMA standard of integrity. Is this true or false, and why?
False. Disclosing this information to a relative, which allowed them to benefit from this inside information, is an act discrediting to the profession and violates
the standard of integrity.
True. Since the accountant did not trade on this inside information directly they have not violated the standard of integrity.
False. Since they disclosed this information to a family member they have violated the standard of integrity, whereas if they had disclosed it to the public at
large they would have not violated the standard.
True. There does not appear to a violation of the standard of integrity, since the accountant received no direct financial benefit.

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Question 19

2.F.2.b
tb.ps.prof.ethics.010_1805
An accountant is suspicious of some activity that they believe may be fraudulent and/or unethical in nature. What is the best approach for how this issue might be
initially handled?
Upon discovering the potentially unethical activity, the employee should discuss this with their manager, or if it involved the manager, the appropriate level of
management, and utilize internally available resolution tools.
If there is ever a question over the ethical nature of an action or entry, the first step should always to be involve the internal audit function.

As soon as an employee suspects that some actions undertaken at the firm might be unethical, the SEC must be notified.

Unless the suspected unethical behavior directly involved the employee or a direct supervisor, there is no need for any action to be taken.

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Question 20

2.F.2.b
tb.ps.prof.ethics.011_1805
An employee is tasked with preparing the bank reconciliations and delivering the cash drop to the local bank branch on a weekly basis. If this action constitutes a
possible incentive for unethical behavior, how should it be addressed?
There does not appear to be either a potential or actual violation of best practices, nor does it appear to produce an environment for unethical behavior.
In order to effectively address this potential issue, at least one additional employee should be trained on these tasks so they can perform both when the current
employee takes vacation.
In addition to cross-training at least one employee on these roles, a manager or supervisor should be tasked with performing an additional review of the
associated work papers.
This is an issue and a problem that can be entirely addressed by the increased integration of technology and automating the bank reconciliation process.

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Question 21

2.F.2.b
tb.ps.prof.ethics.012_1805
In the context of improving the ethical environment at an organization, in what ways could the creation of an ethics sub-team and appointment of a chief ethics
officer hurt, rather than help, the ethical culture of a firm?
Technology and automation are more important than ethics training and regulatory enforcement, so this would just discourage employees from learning new
skills.
The installation of a chief ethics officer and the creation of a sub-team all but guarantee that ethical issues will be a thing of the past.
Since ethics is an inherently subjective field that is open to interpretation, the creation of a team will not help address the numerous issues that could arise
over time.
Since the organization has appointed a chief ethics officer and assembled a sub-team, other employees may feel that ethics is no longer their concern.

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Question 22

2.F.2.b
tb.ps.prof.ethics.013_1805
In reviewing the operational budget for the next two-year period, senior management is deciding whether it wants to reduce ethics training and workshops to invest
more in technology training. Which statement below identifies a potential negative consequence of this approach?
Since Bitcoin and other cryptocurrencies will clearly be the primary form of exchange within the next year or two, the organization must dedicate resources to
training in these areas.
Not understanding the ethical implications, benefits, and potential challenges of new technology tools may leave the organization open to fraud and unethical
conduct with a direct link to new technological trends.
With all the advances in technology, especially the ability to encrypt and analyze larger amounts of information, ethics training is just not as important.

Because technology can automate many lower-level accounting functions, the opportunity for fraud and unethical activity is vastly reduced.

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Question 23

2.F.2.a
tb.ps.prof.ethics.014_1805
Which of the following best outlines a situation when the IMA standard of credibility might be violated?
When the organization reports financial results that are below market expectations, which in turn impacts the credibility of the ability of financial professionals
to manage the firm.
If the management accountants, including the corporate controller, own a stake in a competing firm, and do not disclose this before doing business with their
own organization.
Knowingly not including certain information, due to a delay in receiving it from a third party, and not informing the end users of the report that the information
they are using is incomplete.
Without expertise in emerging technologies like blockchain, AI, and quantum computing, clearly the credibility of management accountants is negatively
impacted.

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Question 24

2.F.2.a
tb.ps.prof.ethics.016_1805
Analyzing the current environment, and the relationship between ethics, technology, and management decision making, what appears to be the future of ethical
decision making?
Technology, including data security, monitoring, and the ability to track employee actions within the organization, will help reduce opportunities for fraud, and
help management make better-informed decisions.
With the advances and changes in technology, the decision-making framework will move from individuals to machines, reducing ethical errors.
Employees can be monitored almost continuously due to advances in enterprise resource planning systems, so opportunity for ethics violations will be
eliminated.
Artificial intelligence and machine learning will embed ethical rules into every system within an organization, eliminating the need for internal audit or
monitoring tools.

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Question 25

2.F.2.a
tb.ps.prof.ethics.017_1805
Viewed through the context of ethical decision making, what is an appropriate view of comparing GAAP earnings versus non-GAAP earnings as reported by
organizations?
Non-GAAP earnings are clearly a violation of ethical regulations and standards and are currently under investigation by the SEC.

Since businesses are changing so quickly, the reporting of GAAP information no longer provides information useful to investors.

GAAP and non-GAAP information are equal in nature, so there is no comparable difference between these types of information.
The differences between GAAP and non-GAAP earnings, while not unethical per se, can present investors with a somewhat confusing view of how the
organization is truly performing.

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Question 26

2.F.2.c
tb.ps.prof.ethics.018_1805
To help improve the ethical culture and operating environment present within an organization, the management team established an ethics portal requiring
employees to list their name, department, and supervisor. Is this an effective methodology?
No. Ethics hotlines and portals can help reduce the possibility of occurrence of ethics issues; however, they should be set up to be anonymous to safeguard
employee confidentiality.
No. Ethical hotlines have not usually been shown to reduce the number of ethical violations or issues within an organization.
Yes. The establishment of an online-based portal for reporting possible ethical violations, including requiring employee information, reduces the likelihood of
frivolous reports.
Yes. Setting up an ethical reporting platform such as the one described in the question will eliminate the possibility of ethical issues.

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Question 27

2.F.2.b
tb.ps.prof.ethics.019_1805
An accounting manager knows that the organization they work for publishes both GAAP and non-GAAP earnings on a quarterly basis. Non-GAAP earnings are
routinely higher and emphasized by the management team instead of GAAP earnings. What course of action, if any, should the accounting manager take?
In this specific situation, and with the given information provided, there does not appear to be any unethical behavior underway by management. No action is
necessary.
Given the information provided, there is a clear violation of both fiduciary duty and the ethical responsibilities of management team, which should be reported
to the audit committee.
Based on the given information, management is already acknowledging potentially unethical behavior by admitting they are preparing two different sets of
earnings figures.
Non-GAAP earnings are normally issued by organizations with international operations and can be seen as the same as preparing earnings under IFRS, so no
action is necessary.

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Question 28

2.F.2.c
tb.ps.prof.ethics.020_1805
One of the assistant controllers at a large multinational organization was very busy with other obligations and skipped a training session of the changes in the lease
accounting standards. Due to missing this training, they made an error in the financial reports. What, if any, standard from the IMA Statement of Ethical Professional
Practice has been violated in this situation?
Mistakes happen quite often in the accounting and finance fields, especially as standards change, so even though a training was missed, there have been no
standards violated.
The standard of integrity has been violated in this situation, since the controller did not take it upon themselves to obtain external training and education on
this issue.
Since the employee was very busy with other things, and the employer did not follow up with them to make up the training, no competencies have been
violated.
In this situation, and since the training was not made up by the assistant controller, the standard of competence has been violated. Management accountants
must keep abreast of professional and regulatory changes.

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Question 29

2.F.2.c
tb.ps.prof.ethics.021_1805
A management accountant oversees cash reconciliation, cash management, and reporting the cash balances to external users of operational and financial
information. Upon reviewing the comparison between deposits and bank statements, the accountant notices some differences. What is an appropriate course of
action to take?
Since the management accountant is only involved in a portion of the process, the final review, there is no need for the management accountant to report any
potential issues.
Bringing this discrepancy to the attention of management, at appropriate levels, and discussing it with other individuals working in the cash management
function, is an appropriate first step to take in this situation.
The only course of action to take would be for the management accountant to report these differences to the bank, which is the external third party involved.
Management can reduce the opportunity risk of fraud by instituting a mandatory review of all entries, reports, and management dashboards before final
approval.

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Question 30

2.F.2.a
tb.ps.prof.ethics.022_1805
When the IMA Statement of Ethical Professional Practice is analyzed, what is the best definition and categorization of the standard of credibility from the perspective
of a management accountant?
Credibility is directly tied to the specialized knowledge held by an accounting professional, and the best way to recognize this is external certifications.
An appropriate way to evaluate and rank the credibility of an accounting professional is to evaluate how ethical and open the accountant is with other
colleagues and management.
Accounting and accountants are not evaluated based on their credibility or the credibility of an organization, so this standard is not applicable for either
finance or accounting professionals.
The only effective way to institute credibility at an organizational and individual level is to mandate information technology upgrades to establish credibility for
employees.

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Question 31

2.F.2.c
tb.ps.prof.ethics.023_1805
Management accountants are often faced with potential ethical dilemmas in the workplace and must consider different considerations when making decisions.
Under what example is the standard of competence most likely to have been violated?
Even though a management accountant is not familiar with the updated revenue recognition standards, they take responsibility for a revenue recognition
project at the organization, resulting in a material misstatement.
The corporate controller chooses not to attend a follow-up training on the changes to lease accounting but does not directly perform or enter information
linked to lease standard information.
Even though the risk of data hacks and breaches are increasing in both severity and frequency, not all field employees have received data security and
password training equivalent to those provided for office employees.
Management accountants already receive continuing professional education credits on a continuous basis anyway, so there is no way an accountant can
violate the standard of competence.

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Question 32

2.F.2.c
tb.ps.prof.ethics.024_1805
At an organization facing significant shareholder pressure to meet quarterly earnings results, what is one potential way in which the ethical principle of honesty may
be violated?
A clear-cut example of violating the ethical principle of honesty would be employees within the organization not receiving consistent ethics training and
education.
One way that honesty would be violated at an organizational level would be if the footnote disclosures at the organization did not correctly state and
document information that would be material to external users of shareholder information.
The reporting of both earnings prepared in accordance with US GAAP and earnings that were prepared under a non-GAAP reporting framework represent a
violation of the principle of honesty.
Management accountants already receive continuing professional education credits on a continuous basis anyway, so there is no way an accountant can
violate the principle of honesty.

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Question 33

2.F.2.b
tb.ps.prof.ethics.025_1805
Based on the IMA's Statement of Professional Ethical Practice, which of the following statements below outlines the best process by which an organization can put
together an ethical environment reinforced by executive integrity?
The establishment of an ethics training program, reporting tool for possible unethical behavior, and internal training led by senior members of the executive
team will all contribute to the integrity of the organization.
The best way that a management could build an ethical culture that operates with integrity throughout the decision-making process is to institute new
analytics and technical tools to track employee behavior.
Cross-training and job rotation are the best way to create a culture of integrity throughout an organization, since that means other employees will be reviewing
work prepared by other employees.
If there is training related to ethics in place at the organization, the organization will operate with an environment of integrity and ethical values.

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Question 34

2.F.2.b
tb.ps.prof.ethics.026_1805
Based on the IMA Statement of Ethical Professional Practice, and the four overarching standards embedded within, how can the ethical principle of responsibility be
violated in a business situation?
The ethical principle of responsibility could be violated if some of the accountants within the organization do not take the time to review their work, assuming
someone else will catch any errors.
The ethical principle of responsibility would be violated in an instance when opinions for local or regional experts are ignored, since those at central
headquarters have more resources available to them.
If the management accountant in question is not the CFO, the principle of responsibility will not be violated, since there are always additional layers of review
required.
If management accountants pursue and advocate for technological upgrades and enhancements that can serve as a replacement for manually reviewing work.

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Question 35

2.F.2.a
tb.ps.prof.ethics.027_1805
Which option below most accurately outlines and lists the four overarching ethical principles that are a part of the IMA Statement of Ethical Professional Practice?
Innovation, Honesty, Automation, and Digitization

Competence, Confidentiality, Integrity, and Credibility

Strategic Thinking, Stakeholder Oriented, Precision, and Accuracy

Honesty, Fairness, Objectivity, and Responsibility

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Question 36

2.F.3.i
tb.ps.prof.ethics.028_1805
Considering the importance that the management team places on meeting and exceeding quarterly earnings figures, what is one possible ramification for other
employees?
Taking cues from the management team, employees will have more opportunities for fraud within the organization.

The most logical aspect of the fraud triangle to be influenced by this mindset is confidentiality.

Since every organization is under pressure to meet and exceed financial targets, this is not unusual and will not have a distinct ethical impact on the firm.
The most logical point such behavior and attitudes would influence would be related to the pressure felt by management and employees to adjust results to
meet expectations.

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Question 37

2.F.2.c
tb.ps.prof.ethics.029_1805
While giving a presentation at a business conference, one of the leading accounting professionals of a multinational organization accidentally discloses product
information about a new item due to launch in eight weeks. What standard, if any, has been violated in this situation?
Since the information was disclosed about a product that had not been released yet, the standard of confidentiality has been violated in this situation.

The information and product data were disclosed at a trade conference, which is perfectly normal, so no standards of the profession have been violated.
Because the product is coming out in eight weeks, making this previously confidential information public is not significant, since it would come out soon
anyway.
The presentation of confidential information is a unique example of a breach of competence, especially since disclosing this data is a clear violation of common
sense.

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Question 38

2.F.2.a
tb.ps.prof.ethics.030_1805
Viewed within the framework of internal control and internal audit, what is the most comprehensive definition of a critically important employee?
An individual who can exercise influence over the preparation and review of the financial statements for external users.

A person or small group of individuals who have the primary and sole role for preparation of audited financial statements within an organization.
A person tasked with the primary responsibility for information technology functions, upgrades, and data security, including data feeds into the financial
statement preparation system.
All of the other answers are components of what constitutes a critically important employee.

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Question 39

2.F.2.b
tb.ps.prof.ethics.031_1805
While attending an offsite meeting with regional leaders from the operational and financial sides of the organization, certain information is discussed that is
confidential. Upon hearing this information, the corporate controller tells his brother to make trades based on this information. What ethical principles, if any, have
been violated?
In this situation, the ethical principle of objectivity has been violated, since management accountants must operate while placing the objectives of the
organization first.
Because it was not the controller but the controller's brother who generated an economic benefit from this situation, there is no violation of ethical principles.

This is a clear violation of the standard of credibility to which all management accounting professionals must adhere.
Insider trading is no longer technically an unethical action, so the fact that this information was used to generate benefits for the family of the controller is not
an issue.

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Question 40

2.F.2.a
tb.ps.prof.ethics.032_1805
What is the best definition and example of the overarching ethical principle of fairness as it pertains to a business context and situation for management
accountants?
Business is not fair; it is a competition for customers and revenues, so it makes sense that fairness would not apply to most situations.
The best definition or example of fairness in a business context is that employees and managerial professionals must keep confidential information to
themselves, whether it is linked to products or services.
The best way to describe and illustrate the ethical principle of fairness in a business context is the fact that all management accountants should view and
report information through an impartial lens.
An example of operating in an ethical and fair manner is not to use underhanded or unethical tactics or strategies, such as corporate espionage, to obtain
superior business results.

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Question 41

2.F.2.b
tb.ps.prof.ethics.033_1805
What sentence best describes and illustrates the concept of objectivity as it pertains to both management accountants and making better business decisions?
Being objective in a business context means that even if personal financial payoffs are reduced, the best decisions must be made for the business.
Management accountants, by definition, are employed by organizations so it is difficult for them to be objective in the context of making better business
choices.
With technology increasingly integrated into operational and financial decisions, the idea of objectivity can be outsourced to technology, so management
accountants do not have to worry about this issue.
The best way for an organization, and specifically management accountants, to be objective in how they make and evaluate different business decisions is to
consult external experts to review internal decisions.

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Question 42

2.F.2.c
tb.ps.prof.ethics.034_1805
An accountant working on an information technology project is aware of a data hack and breach that was attempted during the last month. Even following this
potential data breach, management does not make upgrades or improvements. What possible ethical issues does this raise?
Accountants are not technology experts, so the fact that they are working on a technology project does not mean they have any responsibility to address
technology issues.
Whenever there is an attempted hack at an organization, a review of data security procedures and policies should be conducted, and be a cross functional
project, involving accountants and non-accountants.
Since the data breach and hacking attempt was not successful, there is no need for any issues to be raised, either by information technology professionals or
accountants.
Once a hack has been attempted and not been successful, the odds of a hack happening in the future drop dramatically so it is no longer an issue.

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Question 43

2.F.2.c
tb.ps.prof.ethics.035_1805
While preparing the financial statements at the organization, and coordinating with operational professionals, the corporate controller discusses a coming financial
merger that is not yet public with a competitor. The meeting consists entirely of internal employees, with no external parties present. What ethical standard may
have been violated?
The only standard that may have been violated in this instance is the standard of competence, since the controller obviously was not acting in the role of
financial expert inside the firm.
Since this meeting consisted entirely of internal employees, there are no ethical standards that could have been violated since external individuals must be
present to violate ethical standards.
The most appropriate ethical standard that may have been violated is credibility, since operational individuals would not realize the implications of financial
information.
Since the information was not public data at the time of the meeting, the corporate controller should not have discussed it, and violated the standard of
confidentiality.

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Question 44

2.F.2.b
tb.ps.prof.ethics.036_1805
Which of the following situations best illustrates a way that an organization can reduce the financial pressure on employees that might drive and motivate employees
to participate in unethical activity?
Every organization is, in essence, driven by a profit motive and a desire to increase the return on their financial assets, so there is no direct way to reduce this
risk.
The best method that an organization can use to help reduce risk is to emphasize that while financial goals are important, other non-financial metrics and tools
are equally important for evaluation and performance purposes.
One of the best methods that the management team at an organization can use to reduce pressure is to upgrade technology and invest in a suite of analytical
tools to help better manage the firm.
Instituting ethics training and an ethical hotline at an organization will help cut down and reduce the pressure at the organization.

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Question 45

2.F.2.a
tb.ps.prof.ethics.037_1805
What statement below most accurately summarizes the overarching ethical principle of honesty as it is embedded in the IMA Statement of Ethical Professional
Practice?
That all managerial accounting employees must receive current training and remain up to date on changes in accounting standards.
When analyzing and reporting different types of information, for both internal and external reporting purposes, management accountants must do so in a way
that places the interest of the organization first.
As decisions and other managerial choices are made, all stakeholders are involved and consulted in a respectful manner.
All decisions, accounting information, and the conversations that take place between accountants should be forthright, open, transparent, and disclose all
applicable information between involved stakeholders.

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Question 46

2.F.2.c
tb.ps.prof.ethics.038_1805
When preparing financial statements for a consolidated organization, the management accountants in charge of this process use incomplete information, do not
follow up for updated estimates and accruals, do not disclose certain warranty items in the footnotes and do not disclose these information deficiencies. What, if any,
standards have been violated?
In this situation, and since the incorrect information was limited to estimates (accruals and warranty items), there was no violation of ethical standards.
Since the accountants involved did not follow up for additional information related to proposed estimates or warranty disclosures, the standard of competence
was clearly violated.
This is a clear violation of the standard of responsibility, since members of the profession are tasked with preparing perfectly accurate financial statements.
Based on the fact pattern outlined above, the standard of credibility was violated since the accounting professionals did not communicate information fairly,
provide all relevant information, or report the deficient information.

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Question 47

2.F.2.b
tb.ps.prof.ethics.039_1805
After onboarding in a new division at their organization, a management accountant overhears colleagues exchanging password information that accesses classified
data. Additionally, while walking past some desks, there are passwords written on post it notes. Are any ethical or control standards being violated?
Not in this situation, since it is common practice for employees to swap password information to improve workflow efficiency and avoid bottlenecks.

This situation is a clear indication and example of deliberate unethical behavior on the part of these employees. Internal audit should be notified immediately.
With the rise of facial recognition, passwords are rapidly becoming less utilized across different industry lines, so this is not a true issue for managers in the
current environment.
This situation is a clear example of a technology policy that is weak and prone to be exploited by potential internal and external data hackers, and should be
addressed with a combination of policy change and training.

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Question 48

2.F.2.a
tb.ps.prof.ethics.041_1805
What is one example of when the IMA Statement of Ethical Professional Practice standard of competence might have been violated by a management accounting
professional within an organization?
The management team at an organization does not invest in sufficient information technology tools due to budget restrictions and constraints.
Recruiting efforts at the firm have been reduced in recent years, due to needing a lower number of entry-level employees because of automation and
technology tools.
Since the finance team wants to reduce overhead costs, including those associated with training and employee education, management did not engage in
education related to changing accounting standards.
Due to a lack of employee training and education, there are errors made with regards to revenue recognition and leasing standards, leading to a restatement of
financial statements.

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Question 49

2.F.2.b
tb.ps.prof.ethics.043_1805
As a new project is being reviewed by various members of the operations and finance team, it becomes evident that the corporate controller has a vested interest in
seeing this project succeed, despite severe negative feedback from other members. Does this situation represent a violation of the ethical principle of responsibility
as included in the IMA Statement of Ethical Professionals Practice?
The corporate controller is in violation of the ethical principle of responsibility, since they are remaining in support of the project even when faced with severe
negative feedback.
The corporate controller is not in violation of the principle of responsibility.
The corporate controller is in violation of the principle of responsibility, because they should have foreseen the negative feedback, and implemented ways to
mitigate it.
The corporate controller is in violation of the ethical principle of responsibility, since the project should be correct from the very beginning.

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Question 50

2.F.2.b
tb.ps.prof.ethics.044_1805
Specifically focusing on the technological aspect of business operations, what is one situation that could present ethical dilemmas?
Even faced with the possibility of hacks, management insists on purchasing only the lowest-cost technology upgrades, claiming that insured losses will pay out
sufficient amounts, and the CFO agrees with this plan.
Technology falls outside the domain of a management accountant's expertise so it is not a requirement for accounting professionals to be concerned with
technological challenges and dilemmas.
In the context of technology challenges, an ethical dilemma may be an internal debate between management and finance focusing of the cost/benefit analysis
of various upgrades, especially if the price differential is large.
Every organization knows the importance of technological security and upgrades, so the only possible ethical dilemma in this area would focus on whether
employees are trained.

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Question 51

2.F.2.c
tb.ps.prof.ethics.045_1805
Blockchain and artificial intelligence represent some of the most robust technological changes to impact the profession in the last several decades. What best
describes a possible negative ethical consequence related to the implementation of these technology tools?
One of the possible ethical dilemmas related to these technology tools is that organizations will adopt these platforms and tools without fully understanding
the implications of them.
The organization will successfully implement these tools, and eventually automate away many of the entry-level roles necessary for professionals to gain
experience in the field.
Since these tools are directly related to increased automation and verification of organizational information, there are no ethical implications linked to these
technologies.
In the context of management accounting, blockchain is only related to auditors, and so will have a very limited, if any, impact on the roles of accountants
working in industry.

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Question 52

2.F.2.b
tb.ps.prof.ethics.046_1805
Blockchain and artificial intelligence represent some of the most robust technological changes to impact the accounting profession in the last several decades. How
could these tools lead to a possible violation of the IMA ethical standard of competence?
One possible scenario where the ethical standard of competence could be violated is if these tools are implemented without sufficient training and education.

Artificial intelligence is a grave threat to both the audit and tax practices at firms of all sizes, so this is a clear instance in which competence would be threated.
Since these tools will improve the quality and speed with which accounting work is performed, there is not a logical way that implementing these tools will lead
to a competence violation.
If there is education and training provided at a high level, that describes these technologies at a conceptual level, accountants will be equipped to utilize these
tools with no risk of competence violations.

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Question 53

2.F.2.b
tb.ps.prof.ethics.047_1805
The senior management team at an organization, responding to changes in the competitive landscape, has chosen to completely revamp the internal processes and
controls of an organization. This includes reorganizing the procurement and accounts payable processes at the organization to improve efficiency and productivity.
What can management accountants do to control ethical risks in these new processes?
One of the most effective steps that can be taken by accountants in this situation is to lead increased technology training to maximize the utility of these new
tools and procedures.
Management accountants should address and promote increased job rotation and separation of duties associated with these new tools and reporting
processes.
Since these tools are improving efficiency there is really no reason for management accounting professionals to worry about ethics when improving
productivity in these areas.
Since the changes indicated are not directly linked to the accounting or financial reporting processes of the organization, management accountants have no
responsibility or expertise to recommend a course of action.

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Question 54

2.F.2.b
tb.ps.prof.ethics.048_1805
Thanks to a recent technology upgrade at an organization, the budgeting and forecasting process is nearly 100% automated in nature. Even when accountants are
called in to review certain types of information, it is perceived to be in an advisory role. What possible ethical implications could arise from this behavior?
There are no possible ethical issues connected to this development since the advisory role is what accountants would like to be involved in anyway.

There are no possible ethical issues because of this development, since budgets and forecasting are not the responsibility of management accountants.
The only possible ethical issue that would arise from this upgrade to the budgeting process is that training might not be sufficient to maximize the effectiveness
of these programs.
There are possible ethical issues due to this development because, since the process is almost entirely automated, there is a risk that errors in the underlying
process will not be identified or rectified.

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Question 55

2.F.2.b
tb.ps.prof.ethics.049_1805
Due to the implementation of a new technology and journal processing system, some of the financial reports are inaccurate when reviewed by the corporate
controller. The only errors noted are immaterial in nature for the current period, however. What ethical issues, if any, may have arisen from this situation?
Since the errors are immaterial for the current period, there are no ethical issues that might have arisen.
Any errors in the journal entry process and reporting procedures in place at an organization are always material in nature, no matter how small, and should
addressed as such.
The corporate controller is just the final reviewer in this process, so there should always be errors that are uncovered to justify the position of the controller.
The underlying ethical issue that may arise is that these errors are not the only incorrect entries; other material items may have occurred that were not caught
during the review process.

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Question 56

2.F.2.b
tb.ps.prof.ethics.050_1805
As more and more organizations introduce robotics and automation in accounting and financial reporting processes, there are many positive and negative outcomes
associated with this trend. What is a possible implication that could lead to a violation of the ethical standard of credibility?
This increase in automation and robotics could, in some circumstances, lead management accounting professionals to report certain types of information and
data without fully understanding how this data is produced.
The credibility of management accountants and accounting information will be impacted since accountants will be less respected in the organization if robots
are performing many of the tasks.
In the aftermath of the financial crisis and increasing ethics regulation, credibility is increasingly legislated and not up to individual professionals.

Since robotics and automation will streamline existing processes, these tools and processes will only lead to increased credibility of accounting data.

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Question 57

2.F.2.c
tb.ps.prof.ethics.051_1805
The senior management team at an organization has invested in significant technology upgrades and systems to streamline financial reporting and analysis. After
the initial purchase and setup, however, management has not engaged in any additional training or development, which could lead to which of following potential
outcomes?
A lack of ongoing training and education related to these technology tools might result in employees being unable to effectively use the tools and in turn
violating ethical principles or not following internal control procedures.
Budgeting is a simple reality for many businesses, so management is prudent to reduce costs on additional training that occurs after employees have already
been trained anyway.
One potential ethical issue that might arise is that, due to lack of follow-up training, employees are not convinced that these tools generate benefits for the
organization.
Training is not as necessary in the current environment, since tools include artificial intelligence and other diagnostic tools to help employees learn and use the
tools.

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Question 58

2.F.2.b
tb.ps.prof.ethics.052_1805
Which example best describes the potential ethical issues that may arise as the profession becomes increasingly automated and as encryption becomes more
common, specifically as it pertains to the ethical standard of confidentiality as defined by the IMA Statement of Professional Practice?
Since increased disclosures and information are increasingly required by both financial and non-financial stakeholders, confidentiality is not as big a deal as it
used to be.
Confidentiality is not normally the responsibility of management accountants employed in industry, so there is no reason this will change with increased
technology.
Under the current trends and forces linked to automation and technology tools, encryption plays an ever-larger role, which will eliminate the risk of
confidentiality being breached.
Confidentiality might be breached, even in the context of increased automation and technology, if employees are unaware or unable to effectively use the
encryption tools embedded in technology.

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Question 59

2.F.2.b
tb.ps.prof.ethics.053_1805
As more and more organizations introduce robotics and automation in accounting and financial reporting, there are many positive and negative attributes
associated with this trend. What is a possible implication that could lead to a violation of the ethical principle of responsibility?
This increase in automation and robotics could, in some circumstances, lead management accounting professionals to ignore existing controls or
responsibilities since robots are taking care of more items.
Because automation leads to efficiency, management accounting professionals may try to look for efficiencies across all business processes, other than just
those items they directly oversee.
Since these tools are improving efficiency, there is no reason for management accounting professionals to worry about ethics when improving productivity in
these areas.
Integrating robotics and automation will only lead to increased efficiency and productivity, so there is no direct connection between these forces and
responsibility.

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Answered Question 1

2.F.2.c
cma11.p2.t1.me.0096_0820

Which standard in IMA's “Statement of Ethical Professional Practice” states that financial management professionals should not engage in activities that might
discredit the profession?

*Source: Retired ICMA CMA Exam Questions.

Integrity

Confidentiality

Competence

Credibility

The integrity standard requires that financial management professionals mitigate actual conflicts of
interest, refrain from engaging in any conduct that would prejudice carrying out duties ethically, and
abstain from engaging in or supporting any activity that might discredit the profession.

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Answered Question 2

2.F.2.a
cma11.p2.t1.me.0098_0820
The IMA's overarching ethical principles include all of the following, except:
Honesty

Fairness

Competence

Objectivity

This answer is correct. This is one of the standards but not one of the four overarching principles of the
IMA.

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Answered Question 3

2.F.2.c
tb.ei.fraud.006_1805
To resolve potential ethical issues within an organization, management has recently instituted an ethics hotline. As part of submitting complaints, all employees
must list their department, their name, and their complaint. Is this in compliance with the IMA Statement of Ethical Professional Practice?
No, although an ethics hotline is a proven tool to help offset ethical issues, any submissions to the hotline should be anonymous in nature.

Yes, setting up an ethics hotline is one of the recommended steps that organizations can use to help address ethical issues.
No, an ethics hotline is not a proven method to help employees address potential ethical issues within an organization, so this would not be a solution in this
case.
Yes, ethics hotlines provide a guarantee that unethical behavior will not occur within the organization.

Correct. Ethics hotlines are a recommendation included in this statement but should be anonymous to
preserve employee confidentiality.

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Answered Question 4

2.F.2.c
tb.ei.fraud.056_1805
As more and more organizations introduce robotics and automation in the accounting and financial reporting processes, there are many positive and negative
outcomes associated with this trend. What is a possible implication that could lead to a violation of the ethical principle of competence?
The only competence issue that might be involved through increased automation and digitization of the accounting process is the training required to use
these robotic tools.
One significant way that the increased integration of robotics could negatively impact accounting competency would be if accountants feel they no longer
need to remain up to date and informed on standards and updates.
Robotics and automation will only positively increase the competence factor linked to management accounting professionals since these tools are improving
productivity.
In an increasingly automated business environment, since robots will handle much of the technical research and analysis, there is no way that this can violate
the principle of competence.

Correct. Simply outsourcing the responsibility to remain informed on certain issues is one critical risk to
competency that would accompany robotics integration.

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Answered Question 5

2.F.2.a
tb.ps.prof.ethics.001_1712
Which of the following is one of the three characteristics related to Competence in the standards of conduct as outlined in the IMA Statement of Ethical Professional
Practice?
Provide all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or
recommendations.
Perform professional duties in accordance with relevant laws, regulations, and technical standards.

Refrain from using confidential information for unethical or illegal advantage.

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

This is one of the three characteristics related to Competence in the standards of conduct as outlined in
the IMA Statement of Ethical Professional Practice. Therefore, this is the correct answer.

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Answered Question 6

2.F.2.a
tb.ps.prof.ethics.001_1805
Which of the following principles is not part of the IMA Statement of Ethical Professional Practice?
Technology integration throughout both the business and the supply chain

Honesty in conducting business

Operating in a fair and equitable manner with customers, vendors, and employees

Managing the business in a responsible manner, including stewardship of professional assets

Correct. Although integrating technology can be a good idea, it is not part of the IMA ethical framework.

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Answered Question 7

2.F.2.a
tb.ps.prof.ethics.002_1712
Which of the following is one of the three characteristics related to Confidentiality in the standards of conduct as outlined in the IMA Statement of Ethical
Professional Practice?
Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

Maintain an appropriate level of professional leadership and expertise by enhancing knowledge and skills.

Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.
Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential
conflicts of interest.

This is one of the three characteristics related to Confidentiality in the standards of conduct as outlined
in the IMA Statement of Ethical Professional Practice. Therefore, this is the correct answer.

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Answered Question 8

2.F.2.b
tb.ps.prof.ethics.002_1805
Based off the IMA's Statement of Ethical Professional Practice, what is a method by which organizations can resolve ethical issues if they lack formal ethics policies?
Installing physical and information technology surveillance tools within the organization, to monitor both employees and assets.

Establishing a code of ethics is a proven method to help resolve ethical issues that may arise in an organization.

Making all employees sign a code of ethics, including a pledge to abide by the code while at the firm.

Putting into place an ethics hotline, which should be anonymous in nature, can act as method by which employees can discuss ethical issues.

Correct. Setting up an ethics hotline can help resolve and curtail ethical issues before they escalate.

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Answered Question 9

2.F.2.a
tb.ps.prof.ethics.003_1712
Which of the following is one of the four characteristics related to Integrity in the standards of conduct as outlined in the IMA Statement of Ethical Professional
Practice?
Refrain from using confidential information for unethical or illegal advantage.

Perform professional duties in accordance with relevant laws, regulations, and technical standards.

Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.

Contribute to a positive ethical culture and place integrity of the profession above personal interests.

This is one of the four characteristics related to Integrity in the standards of conduct as outlined in the
IMA Statement of Ethical Professional Practice. Therefore, this is the correct answer.

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Answered Question 10

2.F.2.b
tb.ps.prof.ethics.003_1805
The IMA Statement on Ethical Professional Practice consists of a combination of ethical principles and standards to help translate these principles into practice.
Which of the following is not a component of the standard of competence?
Accounting professionals, especially CMAs, should achieve perfection in financial reporting, analysis, and managerial advice.

Financial professionals should continuously improve their skills, competencies, and leadership abilities by embracing continuing education.
Financial professionals should have the ability to consistently perform professional duties in accordance with relevant laws, regulations, technical standards,
and changing requirements.
CMAs should provide support, insight, and analysis to management and professional colleagues that is accurate, clear, concise, and timely.

Correct. CMAs and financial professionals must have expertise, but perfection is never attainable in a fast-
moving professional landscape.

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Answered Question 11

2.F.2.a
tb.ps.prof.ethics.004_1805
Which of the following is a component of the IMA's Statement of Ethical Professional Practice as it pertains to integrity when operating in a business environment?
Forecast and accurately predict all instances of ethical misdoings, and potential unethical behavior within an organization.

All employees should sign a code of ethics. This will ensure they live by the ethical values of the organization.
To operate with integrity within an organization, management accountants should refrain for engaging in conduct that would prejudice them in carrying out
current duties.
To operate with integrity, professionals must adhere to a standard of excellence that involves making no mistakes in carrying out duties.

Correct. This is certainly a duty that requires a management accountant professional to operate in an
unbiased manner.

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Answered Question 12

2.F.2.b
tb.ps.prof.ethics.005_1712

The president of your company has a reputation for using the company jet for personal trips, and for extending business trips in order to vacation with his family in
exotic locations. This use of company resources frustrates many of the employees. Your role in the company is to issue reimbursements to employees for business
expenses incurred during business trips. The president gives you the receipts from his most recent trip and says, “These receipts show the cost of my meals as well as
my family’s meals. Go ahead and reimburse me for all of it.” Company policy states that the expenses of family members accompanying employees on business trips
are not reimbursable.

Assuming you reimburse the entire amount, which of the following standards of conduct as outlined in the IMA Statement of Ethical Professional Practice are you
violating?

Competence

Confidentiality

Integrity

Credibility

This violates the characteristic related to Integrity of abstaining from engaging in or supporting any
activity that might discredit the profession, found in the standards of conduct as outlined in the IMA
Statement of Ethical Professional Practice. Therefore, this is the correct answer.

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Answered Question 13

2.F.2.a
tb.ps.prof.ethics.005_1805
Which of the below correctly identifies the four overarching ethical principles included in the IMA's Statement of Ethical Professional Practice?
The four pillars of the statement are honesty, fairness, responsibility, and objectivity.

The four pillars of the statement are innovation, globalization, digitization of business operations, and social media trends.

The primary components of the statement are diversity, inclusiveness, cross functional training, and internal controls.

The four pillars are sustainability initiatives, stakeholder reporting, corporate governance development, and human capital.

Correct. These terms and concepts represent the four pillars of the IMA Statement of Ethical Professional
Practice.

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Answered Question 14

2.F.2.c
tb.ps.prof.ethics.006_1712

Scott Bestor is an accountant for Westfield Company. Early this year, Scott made a highly favorable projection of sales and profits over the next three years for
Westfield’s hot-selling computer PLEX. As a result of the projections Scott presented to senior management, the company decided to expand production in this area.
This decision led to dislocations of some plant personnel who were reassigned to one of the company’s newer plants in another state. However, no one was fired,
and in fact the company expanded its workforce slightly. Unfortunately, Scott rechecked his projection computations a few months later and found that he had
made an error that would have reduced his projections substantially. Luckily, sales of PLEX have exceeded projections so far, and management is satisfied with its
decision. A few days later, however, Scott’s manager asked him if he had reviewed his calculations and if he had found any errors. If Scott confesses the error, he
could jeopardize his possible promotion. He knows that his manager will never review the calculations and find the error.

If Scott says he did not make an error, which of the following standards of conduct as outlined in the IMA Statement of Ethical Professional Practice is most clearly
being compromised?

Fairness

Confidentiality

Objectivity

Integrity

This violates the characteristic related to Integrity of contributing to a positive ethical culture and placing
integrity of the profession above personal interests, found in the standards of conduct as outlined in the
IMA Statement of Ethical Professional Practice. Therefore, this is the correct answer.

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Answered Question 15

2.F.2.c
tb.ps.prof.ethics.006_1805
What piece of the IMA's Statement of Ethical Professional Practice might be violated in the following situation? In order to meet short-term financial pressures, some
of the accounting team collaborates to artificially inflate the results of the business.
Clearly, this is a situation where the standard of competences has been violated.

Simply overstating the performance of the organization from a financial perspective does not constitute a violation of any known ethical standard.

Since these actions will ultimately hurt the organization and management team, the standard of loyalty has clearly been violated.

In this situation, the standard of integrity is violated due to the actions taken by the accounting professionals to overstate the performance of the firm.

Correct. Misrepresenting the performance of the firm, and doing so in a continuous and deliberate
manner, is a clear violation of the standard of integrity.

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Answered Question 16

2.F.2.c
tb.ps.prof.ethics.007_1805
Several members of the management team at a multinational organization traveled abroad to finalize an export deal with a new customer. While overseas and at a
client dinner, one member of the leadership team discloses confidential information about pending product and service launches. This information helps finalize the
deal. What is the possible ethical implication of this behavior?
While the individual business deal and transaction is not, in and of itself, a violation of ethical standards, disclosing confidential information violates the
standard of confidentiality.
Since these two organizations are already entering business together, confidential information can be passed between the two firms.

Doing business in an overseas market automatically triggers ethical investigations in many overseas markets, and this deal is no exception.

There does not appear to be any ethical violations or transactions based on the identified fact pattern.

Correct. Management accountants and other management professionals must maintain the
confidentiality of product and service information.

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Answered Question 17

2.F.2.c
tb.ps.prof.ethics.008_1805
Which of the following scenarios would best demonstrate a violation of the IMA professional standard of competence when performing business and accounting
functions?
The CFO and corporate conspire to falsify and overstate the financial results of the organization to appease shareholders.

After a particularly bad day at the office, a disgruntled employee decides to start embezzling funds with a colleague who works in the treasury department.

By using artificial intelligence programs and software, the likelihood of a competence failure moving forward is almost zero.

Due to a lack of sufficient training or education, the controller is unable to accurately review the work submitted for their review by accounting staff.

Correct. To fulfill the standard of competence, accounting professionals must be up to date with relevant
professional standards, including company-specific applications.

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Answered Question 18

2.F.2.b
tb.ps.prof.ethics.009_1805
Because they hold a senior role in the financial reporting segment, an accountant has access to confidential company data. Although they provide this data to a
relative to help them with stock trades, and do not use it themselves, they have not violated the IMA standard of integrity. Is this true or false, and why?
False. Disclosing this information to a relative, which allowed them to benefit from this inside information, is an act discrediting to the profession and violates
the standard of integrity.
True. Since the accountant did not trade on this inside information directly they have not violated the standard of integrity.
False. Since they disclosed this information to a family member they have violated the standard of integrity, whereas if they had disclosed it to the public at
large they would have not violated the standard.
True. There does not appear to a violation of the standard of integrity, since the accountant received no direct financial benefit.

Correct. The standard of integrity applies to both direct acts of the employee and to participation in acts
that discredit the profession.

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Answered Question 19

2.F.2.b
tb.ps.prof.ethics.010_1805
An accountant is suspicious of some activity that they believe may be fraudulent and/or unethical in nature. What is the best approach for how this issue might be
initially handled?
Upon discovering the potentially unethical activity, the employee should discuss this with their manager, or if it involved the manager, the appropriate level of
management, and utilize internally available resolution tools.
If there is ever a question over the ethical nature of an action or entry, the first step should always to be involve the internal audit function.

As soon as an employee suspects that some actions undertaken at the firm might be unethical, the SEC must be notified.

Unless the suspected unethical behavior directly involved the employee or a direct supervisor, there is no need for any action to be taken.

Correct. These components accurately summarize a pathway that an employee should follow when
possible unethical behavior has been uncovered.

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Answered Question 20

2.F.2.b
tb.ps.prof.ethics.011_1805
An employee is tasked with preparing the bank reconciliations and delivering the cash drop to the local bank branch on a weekly basis. If this action constitutes a
possible incentive for unethical behavior, how should it be addressed?
There does not appear to be either a potential or actual violation of best practices, nor does it appear to produce an environment for unethical behavior.
In order to effectively address this potential issue, at least one additional employee should be trained on these tasks so they can perform both when the current
employee takes vacation.
In addition to cross-training at least one employee on these roles, a manager or supervisor should be tasked with performing an additional review of the
associated work papers.
This is an issue and a problem that can be entirely addressed by the increased integration of technology and automating the bank reconciliation process.

Correct. This is the best proposed solution: a combination of cross-training this role with other
employees, and an additional level of review.

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Answered Question 21

2.F.2.b
tb.ps.prof.ethics.012_1805
In the context of improving the ethical environment at an organization, in what ways could the creation of an ethics sub-team and appointment of a chief ethics
officer hurt, rather than help, the ethical culture of a firm?
Technology and automation are more important than ethics training and regulatory enforcement, so this would just discourage employees from learning new
skills.
The installation of a chief ethics officer and the creation of a sub-team all but guarantee that ethical issues will be a thing of the past.
Since ethics is an inherently subjective field that is open to interpretation, the creation of a team will not help address the numerous issues that could arise
over time.
Since the organization has appointed a chief ethics officer and assembled a sub-team, other employees may feel that ethics is no longer their concern.

Correct. Installing a high-ranking executive may hurt ethics efforts, as other employees think that ethics
are outside of their responsibilities.

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Answered Question 22

2.F.2.b
tb.ps.prof.ethics.013_1805
In reviewing the operational budget for the next two-year period, senior management is deciding whether it wants to reduce ethics training and workshops to invest
more in technology training. Which statement below identifies a potential negative consequence of this approach?
Since Bitcoin and other cryptocurrencies will clearly be the primary form of exchange within the next year or two, the organization must dedicate resources to
training in these areas.
Not understanding the ethical implications, benefits, and potential challenges of new technology tools may leave the organization open to fraud and unethical
conduct with a direct link to new technological trends.
With all the advances in technology, especially the ability to encrypt and analyze larger amounts of information, ethics training is just not as important.

Because technology can automate many lower-level accounting functions, the opportunity for fraud and unethical activity is vastly reduced.

Correct. Technology changes will change how fraud and potential unethical activity will be conducted;
employees must receive training in both technological trends and how to deal with ethical issues arising
from these trends.

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Answered Question 23

2.F.2.a
tb.ps.prof.ethics.014_1805
Which of the following best outlines a situation when the IMA standard of credibility might be violated?
When the organization reports financial results that are below market expectations, which in turn impacts the credibility of the ability of financial professionals
to manage the firm.
If the management accountants, including the corporate controller, own a stake in a competing firm, and do not disclose this before doing business with their
own organization.
Knowingly not including certain information, due to a delay in receiving it from a third party, and not informing the end users of the report that the information
they are using is incomplete.
Without expertise in emerging technologies like blockchain, AI, and quantum computing, clearly the credibility of management accountants is negatively
impacted.

Correct. It is acceptable not to have all of the information all of the time, but to maintain credibility,
management accountants must operate in a transparent manner, including notifying users of known
limitations on provided data.

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Answered Question 24

2.F.2.a
tb.ps.prof.ethics.016_1805
Analyzing the current environment, and the relationship between ethics, technology, and management decision making, what appears to be the future of ethical
decision making?
Technology, including data security, monitoring, and the ability to track employee actions within the organization, will help reduce opportunities for fraud, and
help management make better-informed decisions.
With the advances and changes in technology, the decision-making framework will move from individuals to machines, reducing ethical errors.
Employees can be monitored almost continuously due to advances in enterprise resource planning systems, so opportunity for ethics violations will be
eliminated.
Artificial intelligence and machine learning will embed ethical rules into every system within an organization, eliminating the need for internal audit or
monitoring tools.

Correct. Technology will continue to help reduce opportunities for unethical behavior and help
management professionals more effectively drive decision making.

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Answered Question 25

2.F.2.a
tb.ps.prof.ethics.017_1805
Viewed through the context of ethical decision making, what is an appropriate view of comparing GAAP earnings versus non-GAAP earnings as reported by
organizations?
Non-GAAP earnings are clearly a violation of ethical regulations and standards and are currently under investigation by the SEC.

Since businesses are changing so quickly, the reporting of GAAP information no longer provides information useful to investors.

GAAP and non-GAAP information are equal in nature, so there is no comparable difference between these types of information.
The differences between GAAP and non-GAAP earnings, while not unethical per se, can present investors with a somewhat confusing view of how the
organization is truly performing.

Correct. Non-GAAP earnings are not unethical but are not bound by the regulations and standards of
GAAP accounting and can possibly confuse users of financial information.

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Answered Question 26

2.F.2.c
tb.ps.prof.ethics.018_1805
To help improve the ethical culture and operating environment present within an organization, the management team established an ethics portal requiring
employees to list their name, department, and supervisor. Is this an effective methodology?
No. Ethics hotlines and portals can help reduce the possibility of occurrence of ethics issues; however, they should be set up to be anonymous to safeguard
employee confidentiality.
No. Ethical hotlines have not usually been shown to reduce the number of ethical violations or issues within an organization.
Yes. The establishment of an online-based portal for reporting possible ethical violations, including requiring employee information, reduces the likelihood of
frivolous reports.
Yes. Setting up an ethical reporting platform such as the one described in the question will eliminate the possibility of ethical issues.

Correct. Hotlines have been proven to reduce unethical activity and actions but should be set up to be
anonymous to encourage reporting and protect employee confidentiality.

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Answered Question 27

2.F.2.b
tb.ps.prof.ethics.019_1805
An accounting manager knows that the organization they work for publishes both GAAP and non-GAAP earnings on a quarterly basis. Non-GAAP earnings are
routinely higher and emphasized by the management team instead of GAAP earnings. What course of action, if any, should the accounting manager take?
In this specific situation, and with the given information provided, there does not appear to be any unethical behavior underway by management. No action is
necessary.
Given the information provided, there is a clear violation of both fiduciary duty and the ethical responsibilities of management team, which should be reported
to the audit committee.
Based on the given information, management is already acknowledging potentially unethical behavior by admitting they are preparing two different sets of
earnings figures.
Non-GAAP earnings are normally issued by organizations with international operations and can be seen as the same as preparing earnings under IFRS, so no
action is necessary.

Correct. Choosing to highlight non-GAAP figures is not, in and of itself, unethical behavior.

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Answered Question 28

2.F.2.c
tb.ps.prof.ethics.020_1805
One of the assistant controllers at a large multinational organization was very busy with other obligations and skipped a training session of the changes in the lease
accounting standards. Due to missing this training, they made an error in the financial reports. What, if any, standard from the IMA Statement of Ethical Professional
Practice has been violated in this situation?
Mistakes happen quite often in the accounting and finance fields, especially as standards change, so even though a training was missed, there have been no
standards violated.
The standard of integrity has been violated in this situation, since the controller did not take it upon themselves to obtain external training and education on
this issue.
Since the employee was very busy with other things, and the employer did not follow up with them to make up the training, no competencies have been
violated.
In this situation, and since the training was not made up by the assistant controller, the standard of competence has been violated. Management accountants
must keep abreast of professional and regulatory changes.

Correct. Management accountants must remain up to date on standards, and by not obtaining
appropriate training, the standard of competence has been violated.

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Answered Question 29

2.F.2.c
tb.ps.prof.ethics.021_1805
A management accountant oversees cash reconciliation, cash management, and reporting the cash balances to external users of operational and financial
information. Upon reviewing the comparison between deposits and bank statements, the accountant notices some differences. What is an appropriate course of
action to take?
Since the management accountant is only involved in a portion of the process, the final review, there is no need for the management accountant to report any
potential issues.
Bringing this discrepancy to the attention of management, at appropriate levels, and discussing it with other individuals working in the cash management
function, is an appropriate first step to take in this situation.
The only course of action to take would be for the management accountant to report these differences to the bank, which is the external third party involved.
Management can reduce the opportunity risk of fraud by instituting a mandatory review of all entries, reports, and management dashboards before final
approval.

Correct. Discussing the potential risk with other individuals within the organization, and assessing the
risk involved, is an appropriate first step to take in this situation.

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Answered Question 30

2.F.2.a
tb.ps.prof.ethics.022_1805
When the IMA Statement of Ethical Professional Practice is analyzed, what is the best definition and categorization of the standard of credibility from the perspective
of a management accountant?
Credibility is directly tied to the specialized knowledge held by an accounting professional, and the best way to recognize this is external certifications.
An appropriate way to evaluate and rank the credibility of an accounting professional is to evaluate how ethical and open the accountant is with other
colleagues and management.
Accounting and accountants are not evaluated based on their credibility or the credibility of an organization, so this standard is not applicable for either
finance or accounting professionals.
The only effective way to institute credibility at an organizational and individual level is to mandate information technology upgrades to establish credibility for
employees.

Correct. Credibility is linked toward openness and ethical behavior with both internal and external
stakeholders and serves as an effective basis for judging credibility.

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Answered Question 31

2.F.2.c
tb.ps.prof.ethics.023_1805
Management accountants are often faced with potential ethical dilemmas in the workplace and must consider different considerations when making decisions.
Under what example is the standard of competence most likely to have been violated?
Even though a management accountant is not familiar with the updated revenue recognition standards, they take responsibility for a revenue recognition
project at the organization, resulting in a material misstatement.
The corporate controller chooses not to attend a follow-up training on the changes to lease accounting but does not directly perform or enter information
linked to lease standard information.
Even though the risk of data hacks and breaches are increasing in both severity and frequency, not all field employees have received data security and
password training equivalent to those provided for office employees.
Management accountants already receive continuing professional education credits on a continuous basis anyway, so there is no way an accountant can
violate the standard of competence.

Correct. This is a clear-cut example of when an accountant, through lack of knowledge and expertise, has
violated the standard of competence and damaged the reputation of the organization.

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Answered Question 32

2.F.2.c
tb.ps.prof.ethics.024_1805
At an organization facing significant shareholder pressure to meet quarterly earnings results, what is one potential way in which the ethical principle of honesty may
be violated?
A clear-cut example of violating the ethical principle of honesty would be employees within the organization not receiving consistent ethics training and
education.
One way that honesty would be violated at an organizational level would be if the footnote disclosures at the organization did not correctly state and
document information that would be material to external users of shareholder information.
The reporting of both earnings prepared in accordance with US GAAP and earnings that were prepared under a non-GAAP reporting framework represent a
violation of the principle of honesty.
Management accountants already receive continuing professional education credits on a continuous basis anyway, so there is no way an accountant can
violate the principle of honesty.

Correct. Footnote disclosures often contain critically important information for users of financial
statements and must be assembled and reported in a manner that is transparent, clear, and honest.

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Answered Question 33

2.F.2.b
tb.ps.prof.ethics.025_1805
Based on the IMA's Statement of Professional Ethical Practice, which of the following statements below outlines the best process by which an organization can put
together an ethical environment reinforced by executive integrity?
The establishment of an ethics training program, reporting tool for possible unethical behavior, and internal training led by senior members of the executive
team will all contribute to the integrity of the organization.
The best way that a management could build an ethical culture that operates with integrity throughout the decision-making process is to institute new
analytics and technical tools to track employee behavior.
Cross-training and job rotation are the best way to create a culture of integrity throughout an organization, since that means other employees will be reviewing
work prepared by other employees.
If there is training related to ethics in place at the organization, the organization will operate with an environment of integrity and ethical values.

Correct. All these options and tactics represent ways that an organization could operate in compliance
with the ethical standard of integrity.

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Answered Question 34

2.F.2.b
tb.ps.prof.ethics.026_1805
Based on the IMA Statement of Ethical Professional Practice, and the four overarching standards embedded within, how can the ethical principle of responsibility be
violated in a business situation?
The ethical principle of responsibility could be violated if some of the accountants within the organization do not take the time to review their work, assuming
someone else will catch any errors.
The ethical principle of responsibility would be violated in an instance when opinions for local or regional experts are ignored, since those at central
headquarters have more resources available to them.
If the management accountant in question is not the CFO, the principle of responsibility will not be violated, since there are always additional layers of review
required.
If management accountants pursue and advocate for technological upgrades and enhancements that can serve as a replacement for manually reviewing work.

Correct. Whenever work is prepared, it must be reviewed and checked to ensure the number of errors is
minimized. This is a role every accountant must fulfill.

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Answered Question 35

2.F.2.a
tb.ps.prof.ethics.027_1805
Which option below most accurately outlines and lists the four overarching ethical principles that are a part of the IMA Statement of Ethical Professional Practice?
Innovation, Honesty, Automation, and Digitization

Competence, Confidentiality, Integrity, and Credibility

Strategic Thinking, Stakeholder Oriented, Precision, and Accuracy

Honesty, Fairness, Objectivity, and Responsibility

Correct. These are the four overarching ethical principles included with the IMA's Statement of Ethical
Professional Practice.

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Answered Question 36

2.F.3.i
tb.ps.prof.ethics.028_1805
Considering the importance that the management team places on meeting and exceeding quarterly earnings figures, what is one possible ramification for other
employees?
Taking cues from the management team, employees will have more opportunities for fraud within the organization.

The most logical aspect of the fraud triangle to be influenced by this mindset is confidentiality.

Since every organization is under pressure to meet and exceed financial targets, this is not unusual and will not have a distinct ethical impact on the firm.
The most logical point such behavior and attitudes would influence would be related to the pressure felt by management and employees to adjust results to
meet expectations.

Correct. Since it is obvious that management places a large amount of emphasis on meeting financial
targets, employees might very well feel pressure to cut corners to achieve these goals.

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Answered Question 37

2.F.2.c
tb.ps.prof.ethics.029_1805
While giving a presentation at a business conference, one of the leading accounting professionals of a multinational organization accidentally discloses product
information about a new item due to launch in eight weeks. What standard, if any, has been violated in this situation?
Since the information was disclosed about a product that had not been released yet, the standard of confidentiality has been violated in this situation.

The information and product data were disclosed at a trade conference, which is perfectly normal, so no standards of the profession have been violated.
Because the product is coming out in eight weeks, making this previously confidential information public is not significant, since it would come out soon
anyway.
The presentation of confidential information is a unique example of a breach of competence, especially since disclosing this data is a clear violation of common
sense.

Correct. Since the information is not yet public, disclosing it was in clear violation of this standard.

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Answered Question 38

2.F.2.a
tb.ps.prof.ethics.030_1805
Viewed within the framework of internal control and internal audit, what is the most comprehensive definition of a critically important employee?
An individual who can exercise influence over the preparation and review of the financial statements for external users.

A person or small group of individuals who have the primary and sole role for preparation of audited financial statements within an organization.
A person tasked with the primary responsibility for information technology functions, upgrades, and data security, including data feeds into the financial
statement preparation system.
All of the other answers are components of what constitutes a critically important employee.

Correct. These answers are all components of what would constitute a critically important employee
from an internal control perspective.

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Answered Question 39

2.F.2.b
tb.ps.prof.ethics.031_1805
While attending an offsite meeting with regional leaders from the operational and financial sides of the organization, certain information is discussed that is
confidential. Upon hearing this information, the corporate controller tells his brother to make trades based on this information. What ethical principles, if any, have
been violated?
In this situation, the ethical principle of objectivity has been violated, since management accountants must operate while placing the objectives of the
organization first.
Because it was not the controller but the controller's brother who generated an economic benefit from this situation, there is no violation of ethical principles.

This is a clear violation of the standard of credibility to which all management accounting professionals must adhere.
Insider trading is no longer technically an unethical action, so the fact that this information was used to generate benefits for the family of the controller is not
an issue.

Correct. Objectivity requires that accountants operate with the goals of the organization placed above
their own. This is clearly not the case in this instance.

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Answered Question 40

2.F.2.a
tb.ps.prof.ethics.032_1805
What is the best definition and example of the overarching ethical principle of fairness as it pertains to a business context and situation for management
accountants?
Business is not fair; it is a competition for customers and revenues, so it makes sense that fairness would not apply to most situations.
The best definition or example of fairness in a business context is that employees and managerial professionals must keep confidential information to
themselves, whether it is linked to products or services.
The best way to describe and illustrate the ethical principle of fairness in a business context is the fact that all management accountants should view and
report information through an impartial lens.
An example of operating in an ethical and fair manner is not to use underhanded or unethical tactics or strategies, such as corporate espionage, to obtain
superior business results.

Correct. Fairness in a business context means that employees and organizations should not use
underhanded tactics to obtain advantages in business.

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Answered Question 41

2.F.2.b
tb.ps.prof.ethics.033_1805
What sentence best describes and illustrates the concept of objectivity as it pertains to both management accountants and making better business decisions?
Being objective in a business context means that even if personal financial payoffs are reduced, the best decisions must be made for the business.
Management accountants, by definition, are employed by organizations so it is difficult for them to be objective in the context of making better business
choices.
With technology increasingly integrated into operational and financial decisions, the idea of objectivity can be outsourced to technology, so management
accountants do not have to worry about this issue.
The best way for an organization, and specifically management accountants, to be objective in how they make and evaluate different business decisions is to
consult external experts to review internal decisions.

Correct. Objectivity requires that individuals place the needs and expectations of the business above
their personal goals and ambitions.

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Answered Question 42

2.F.2.c
tb.ps.prof.ethics.034_1805
An accountant working on an information technology project is aware of a data hack and breach that was attempted during the last month. Even following this
potential data breach, management does not make upgrades or improvements. What possible ethical issues does this raise?
Accountants are not technology experts, so the fact that they are working on a technology project does not mean they have any responsibility to address
technology issues.
Whenever there is an attempted hack at an organization, a review of data security procedures and policies should be conducted, and be a cross functional
project, involving accountants and non-accountants.
Since the data breach and hacking attempt was not successful, there is no need for any issues to be raised, either by information technology professionals or
accountants.
Once a hack has been attempted and not been successful, the odds of a hack happening in the future drop dramatically so it is no longer an issue.

Correct. Every time there is a data breach or attempted data breach, a review of technology procedures
and policies should be conducted and reviewed to ensure future hacks do not successfully happen.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 43

2.F.2.c
tb.ps.prof.ethics.035_1805
While preparing the financial statements at the organization, and coordinating with operational professionals, the corporate controller discusses a coming financial
merger that is not yet public with a competitor. The meeting consists entirely of internal employees, with no external parties present. What ethical standard may
have been violated?
The only standard that may have been violated in this instance is the standard of competence, since the controller obviously was not acting in the role of
financial expert inside the firm.
Since this meeting consisted entirely of internal employees, there are no ethical standards that could have been violated since external individuals must be
present to violate ethical standards.
The most appropriate ethical standard that may have been violated is credibility, since operational individuals would not realize the implications of financial
information.
Since the information was not public data at the time of the meeting, the corporate controller should not have discussed it, and violated the standard of
confidentiality.

Correct. Even though the meeting consisted of internal employees, certain types of information are still
confidential inside of a firm.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 44

2.F.2.b
tb.ps.prof.ethics.036_1805
Which of the following situations best illustrates a way that an organization can reduce the financial pressure on employees that might drive and motivate employees
to participate in unethical activity?
Every organization is, in essence, driven by a profit motive and a desire to increase the return on their financial assets, so there is no direct way to reduce this
risk.
The best method that an organization can use to help reduce risk is to emphasize that while financial goals are important, other non-financial metrics and tools
are equally important for evaluation and performance purposes.
One of the best methods that the management team at an organization can use to reduce pressure is to upgrade technology and invest in a suite of analytical
tools to help better manage the firm.
Instituting ethics training and an ethical hotline at an organization will help cut down and reduce the pressure at the organization.

Correct. Highlighting the importance and validity of non-financial measures on how an organization
performs will help reduce the possible pressure felt by employees on possible unethical goals.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 45

2.F.2.a
tb.ps.prof.ethics.037_1805
What statement below most accurately summarizes the overarching ethical principle of honesty as it is embedded in the IMA Statement of Ethical Professional
Practice?
That all managerial accounting employees must receive current training and remain up to date on changes in accounting standards.
When analyzing and reporting different types of information, for both internal and external reporting purposes, management accountants must do so in a way
that places the interest of the organization first.
As decisions and other managerial choices are made, all stakeholders are involved and consulted in a respectful manner.
All decisions, accounting information, and the conversations that take place between accountants should be forthright, open, transparent, and disclose all
applicable information between involved stakeholders.

Correct. Being open, transparent, and forthright with all interested parties and with applicable
information most accurately summarizes the concept of honesty.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 46

2.F.2.c
tb.ps.prof.ethics.038_1805
When preparing financial statements for a consolidated organization, the management accountants in charge of this process use incomplete information, do not
follow up for updated estimates and accruals, do not disclose certain warranty items in the footnotes and do not disclose these information deficiencies. What, if any,
standards have been violated?
In this situation, and since the incorrect information was limited to estimates (accruals and warranty items), there was no violation of ethical standards.
Since the accountants involved did not follow up for additional information related to proposed estimates or warranty disclosures, the standard of competence
was clearly violated.
This is a clear violation of the standard of responsibility, since members of the profession are tasked with preparing perfectly accurate financial statements.
Based on the fact pattern outlined above, the standard of credibility was violated since the accounting professionals did not communicate information fairly,
provide all relevant information, or report the deficient information.

Correct. IMA members who are credible are expected to: (1) Communicate information fairly and
objectively. (2) Provide all relevant information that could reasonably be expected to influence an
intended user's understanding of the reports, analyses, or recommendations. (3) Report any delays or
deficiencies in information, timeliness, processing, or internal controls in conformance with organization
policy and/or applicable law. (4) Communicate professional limitations or other constraints that would
preclude responsible judgment or successful performance of an activity.

Based on the fact pattern outlined above, the standard of credibility was violated since the accounting
professionals did not communicate information fairly, provide all relevant information, or report the
deficient information.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 47

2.F.2.b
tb.ps.prof.ethics.039_1805
After onboarding in a new division at their organization, a management accountant overhears colleagues exchanging password information that accesses classified
data. Additionally, while walking past some desks, there are passwords written on post it notes. Are any ethical or control standards being violated?
Not in this situation, since it is common practice for employees to swap password information to improve workflow efficiency and avoid bottlenecks.

This situation is a clear indication and example of deliberate unethical behavior on the part of these employees. Internal audit should be notified immediately.
With the rise of facial recognition, passwords are rapidly becoming less utilized across different industry lines, so this is not a true issue for managers in the
current environment.
This situation is a clear example of a technology policy that is weak and prone to be exploited by potential internal and external data hackers, and should be
addressed with a combination of policy change and training.

Correct. While not unethical in nature specifically, this is a clear example of how lack of controls over
password policies and procedures can leave organizations vulnerable to data breaches.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 48

2.F.2.a
tb.ps.prof.ethics.041_1805
What is one example of when the IMA Statement of Ethical Professional Practice standard of competence might have been violated by a management accounting
professional within an organization?
The management team at an organization does not invest in sufficient information technology tools due to budget restrictions and constraints.
Recruiting efforts at the firm have been reduced in recent years, due to needing a lower number of entry-level employees because of automation and
technology tools.
Since the finance team wants to reduce overhead costs, including those associated with training and employee education, management did not engage in
education related to changing accounting standards.
Due to a lack of employee training and education, there are errors made with regards to revenue recognition and leasing standards, leading to a restatement of
financial statements.

Correct. Since there has been a lack of training, errors and mistakes were made with the information of
the organization, leading to a violation of the standard of competence required of all professionals.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 49

2.F.2.b
tb.ps.prof.ethics.043_1805
As a new project is being reviewed by various members of the operations and finance team, it becomes evident that the corporate controller has a vested interest in
seeing this project succeed, despite severe negative feedback from other members. Does this situation represent a violation of the ethical principle of responsibility
as included in the IMA Statement of Ethical Professionals Practice?
The corporate controller is in violation of the ethical principle of responsibility, since they are remaining in support of the project even when faced with severe
negative feedback.
The corporate controller is not in violation of the principle of responsibility.
The corporate controller is in violation of the principle of responsibility, because they should have foreseen the negative feedback, and implemented ways to
mitigate it.
The corporate controller is in violation of the ethical principle of responsibility, since the project should be correct from the very beginning.

Correct. Although there are potential ethical issues in this situation, they are better related to the ethical
principle of objectivity, rather than responsibility.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 50

2.F.2.b
tb.ps.prof.ethics.044_1805
Specifically focusing on the technological aspect of business operations, what is one situation that could present ethical dilemmas?
Even faced with the possibility of hacks, management insists on purchasing only the lowest-cost technology upgrades, claiming that insured losses will pay out
sufficient amounts, and the CFO agrees with this plan.
Technology falls outside the domain of a management accountant's expertise so it is not a requirement for accounting professionals to be concerned with
technological challenges and dilemmas.
In the context of technology challenges, an ethical dilemma may be an internal debate between management and finance focusing of the cost/benefit analysis
of various upgrades, especially if the price differential is large.
Every organization knows the importance of technological security and upgrades, so the only possible ethical dilemma in this area would focus on whether
employees are trained.

Correct. The debate between cost and benefits is always present and may very well present an ethical
dilemma for accounting professionals. These should always be resolved in a logical and ethical manner,
with cost being only one consideration.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 51

2.F.2.c
tb.ps.prof.ethics.045_1805
Blockchain and artificial intelligence represent some of the most robust technological changes to impact the profession in the last several decades. What best
describes a possible negative ethical consequence related to the implementation of these technology tools?
One of the possible ethical dilemmas related to these technology tools is that organizations will adopt these platforms and tools without fully understanding
the implications of them.
The organization will successfully implement these tools, and eventually automate away many of the entry-level roles necessary for professionals to gain
experience in the field.
Since these tools are directly related to increased automation and verification of organizational information, there are no ethical implications linked to these
technologies.
In the context of management accounting, blockchain is only related to auditors, and so will have a very limited, if any, impact on the roles of accountants
working in industry.

Correct. Implementing tools without fully understanding them is a recipe for possible unethical issues
and activities, including tools such as blockchain and AI.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 52

2.F.2.b
tb.ps.prof.ethics.046_1805
Blockchain and artificial intelligence represent some of the most robust technological changes to impact the accounting profession in the last several decades. How
could these tools lead to a possible violation of the IMA ethical standard of competence?
One possible scenario where the ethical standard of competence could be violated is if these tools are implemented without sufficient training and education.

Artificial intelligence is a grave threat to both the audit and tax practices at firms of all sizes, so this is a clear instance in which competence would be threated.
Since these tools will improve the quality and speed with which accounting work is performed, there is not a logical way that implementing these tools will lead
to a competence violation.
If there is education and training provided at a high level, that describes these technologies at a conceptual level, accountants will be equipped to utilize these
tools with no risk of competence violations.

Correct. Putting new tools into effect at an organization without sufficient training could lead to
accounting professionals using them without fully understanding the implications of doing so.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 53

2.F.2.b
tb.ps.prof.ethics.047_1805
The senior management team at an organization, responding to changes in the competitive landscape, has chosen to completely revamp the internal processes and
controls of an organization. This includes reorganizing the procurement and accounts payable processes at the organization to improve efficiency and productivity.
What can management accountants do to control ethical risks in these new processes?
One of the most effective steps that can be taken by accountants in this situation is to lead increased technology training to maximize the utility of these new
tools and procedures.
Management accountants should address and promote increased job rotation and separation of duties associated with these new tools and reporting
processes.
Since these tools are improving efficiency there is really no reason for management accounting professionals to worry about ethics when improving
productivity in these areas.
Since the changes indicated are not directly linked to the accounting or financial reporting processes of the organization, management accountants have no
responsibility or expertise to recommend a course of action.

Correct. This is the most direct and effective way that management accountants can embrace these new
tools while ensuring against risk of ethical breakdowns in the organization.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 54

2.F.2.b
tb.ps.prof.ethics.048_1805
Thanks to a recent technology upgrade at an organization, the budgeting and forecasting process is nearly 100% automated in nature. Even when accountants are
called in to review certain types of information, it is perceived to be in an advisory role. What possible ethical implications could arise from this behavior?
There are no possible ethical issues connected to this development since the advisory role is what accountants would like to be involved in anyway.

There are no possible ethical issues because of this development, since budgets and forecasting are not the responsibility of management accountants.
The only possible ethical issue that would arise from this upgrade to the budgeting process is that training might not be sufficient to maximize the effectiveness
of these programs.
There are possible ethical issues due to this development because, since the process is almost entirely automated, there is a risk that errors in the underlying
process will not be identified or rectified.

Correct. Because the budgeting process has been so automated, errors and omissions might not be
caught or rectified because of this review.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 55

2.F.2.b
tb.ps.prof.ethics.049_1805
Due to the implementation of a new technology and journal processing system, some of the financial reports are inaccurate when reviewed by the corporate
controller. The only errors noted are immaterial in nature for the current period, however. What ethical issues, if any, may have arisen from this situation?
Since the errors are immaterial for the current period, there are no ethical issues that might have arisen.
Any errors in the journal entry process and reporting procedures in place at an organization are always material in nature, no matter how small, and should
addressed as such.
The corporate controller is just the final reviewer in this process, so there should always be errors that are uncovered to justify the position of the controller.
The underlying ethical issue that may arise is that these errors are not the only incorrect entries; other material items may have occurred that were not caught
during the review process.

Correct. Just because the immaterial errors were the ones caught does not mean that other material
errors did not occur.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 56

2.F.2.b
tb.ps.prof.ethics.050_1805
As more and more organizations introduce robotics and automation in accounting and financial reporting processes, there are many positive and negative outcomes
associated with this trend. What is a possible implication that could lead to a violation of the ethical standard of credibility?
This increase in automation and robotics could, in some circumstances, lead management accounting professionals to report certain types of information and
data without fully understanding how this data is produced.
The credibility of management accountants and accounting information will be impacted since accountants will be less respected in the organization if robots
are performing many of the tasks.
In the aftermath of the financial crisis and increasing ethics regulation, credibility is increasingly legislated and not up to individual professionals.

Since robotics and automation will streamline existing processes, these tools and processes will only lead to increased credibility of accounting data.

Correct. In some companies and organizations, management accountants may, through lack of training
or education, report information without understanding underlying processes.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 57

2.F.2.c
tb.ps.prof.ethics.051_1805
The senior management team at an organization has invested in significant technology upgrades and systems to streamline financial reporting and analysis. After
the initial purchase and setup, however, management has not engaged in any additional training or development, which could lead to which of following potential
outcomes?
A lack of ongoing training and education related to these technology tools might result in employees being unable to effectively use the tools and in turn
violating ethical principles or not following internal control procedures.
Budgeting is a simple reality for many businesses, so management is prudent to reduce costs on additional training that occurs after employees have already
been trained anyway.
One potential ethical issue that might arise is that, due to lack of follow-up training, employees are not convinced that these tools generate benefits for the
organization.
Training is not as necessary in the current environment, since tools include artificial intelligence and other diagnostic tools to help employees learn and use the
tools.

Correct. A lack of training might result in possible unethical behavior or violations of existing procedures
and processes at the organization.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 58

2.F.2.b
tb.ps.prof.ethics.052_1805
Which example best describes the potential ethical issues that may arise as the profession becomes increasingly automated and as encryption becomes more
common, specifically as it pertains to the ethical standard of confidentiality as defined by the IMA Statement of Professional Practice?
Since increased disclosures and information are increasingly required by both financial and non-financial stakeholders, confidentiality is not as big a deal as it
used to be.
Confidentiality is not normally the responsibility of management accountants employed in industry, so there is no reason this will change with increased
technology.
Under the current trends and forces linked to automation and technology tools, encryption plays an ever-larger role, which will eliminate the risk of
confidentiality being breached.
Confidentiality might be breached, even in the context of increased automation and technology, if employees are unaware or unable to effectively use the
encryption tools embedded in technology.

Correct. If employees are unable to use these technology tools to their highest level, the encryption tools
will not assist in reducing confidentiality risks.

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8/24/22, 4:01 PM Part_2 - Dashboard - Principles and Standards of Professional Ethics

Answered Question 59

2.F.2.b
tb.ps.prof.ethics.053_1805
As more and more organizations introduce robotics and automation in accounting and financial reporting, there are many positive and negative attributes
associated with this trend. What is a possible implication that could lead to a violation of the ethical principle of responsibility?
This increase in automation and robotics could, in some circumstances, lead management accounting professionals to ignore existing controls or
responsibilities since robots are taking care of more items.
Because automation leads to efficiency, management accounting professionals may try to look for efficiencies across all business processes, other than just
those items they directly oversee.
Since these tools are improving efficiency, there is no reason for management accounting professionals to worry about ethics when improving productivity in
these areas.
Integrating robotics and automation will only lead to increased efficiency and productivity, so there is no direct connection between these forces and
responsibility.

Correct. In some companies and organizations, management accountants may, advertently or

inadvertently, pay less attention to control procedures that would otherwise be in place.

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