organizations commonly establish standards of conduct for their managers and employees. Professional associations also establish ethical standard. the Institute of Management Accountants has establish ethical standard for management accountants. in 2005, the IMA issued a revised statement outlining standards of ethical conduct for management accountants. called the " statement of Ethical Professional Practice " the revised statement was designed to accord with the provisions of the Sarbanes-Oxley Act of 2002 and to meet the global needs of IMA's international members. The revised statement is based on the principles of honesty,fairness, objectivity, and responsibility. The Statement of Ethical Professional Practice and the recommended resolution of ethical conflicts are presented in Exhibit 1-5.
To illustrate an application of the statement, suppose a manager's bonus increases as reported profits increase. The manager has an incentive to find ways to increase profits, including unethical approaches. For example,he or she could delay promoting deserving employees or use cheaper parts to make a product. In either case, if the motive is simply to increase the reported income, and the bonus, the behavior could be unethical.
Neither action is in the best interest of the company or its employee.