Professional Documents
Culture Documents
Chapter 2 The Professional Environment of Cost Management
Chapter 2 The Professional Environment of Cost Management
COST MANAGEMENT
A major function of the management accountant is that of tailoring the application of the process
to the organization so that the organization's objectives, short-term and long-term, are achieved
effectively.
● Institute of Management Accountants (IMA) of the United States has developed a very
useful ethical code called the Standards of Ethical Conduct for Practitioners of
Management Accounting and Financial Management.
● Even though the standards were specifically developed for management accountants,
they have much broader application.
Ethical standards provide sound, practical advice for management accountants and managers.
● require professional behavior, especially in avoiding conflicts or-interest.
● require management accountants to bring bad news to the attention of their supervisors,
and to work cotnpetently.
1. Competence
- ongoing development of their knowledge and skills.
- duties in accordance with relevant laws, regulations, and technical standards.
- complete and clear reports
2. Confidentiality
- Refrain from disclosing confidential information acquired in the course of their work
except when authorized, unless legally obligated to do so.
- Inform subordinates as appropriate regarding the confidentiality of information acquired
in the course of their work and monitor their activities to assure the maintenance of that
confidentiality.
- Refrain from using or appearing to use confidential information acquired in the course of
their work for unethical or illegal advantage either personally or through third parties
3. Integrity
- Avoid actual or apparent conflicts of interest and advise all appropriate parties of any
potential conflct.
- Refrain from engaging in any activity that would prejudice their ability to carry out their
duties ethically,
- Refuse any gift, favor, or hospitality that would influence or would appear to influence
their actions,
- Refrain from either actively or passively subverting the attainment of the organization's
legitimate and ethical objectives.
- Recognize and communicate professional limitations or other constraints that would
preclude responsibility judgment or successful performance of an activity.
- Communicate unfavorable as well as favorable information and professional judgments
or opinions.
- Refrain from engaging in or supporting any activity that would discredit the profession.
4. . Objectivity
- Communicate information fairly and objectively.
- Disclose fully all relevant information that could reasonably be expected to influence an
intended user's understanding of the reports, comments, and recommendations
presented.
If the ethical conflict still exists after exhausting all levels of intemal review, there may be no
other recourse on significant matters than to resign from the organization and notify other
party depending on the nature of conflicts.
INTERNATIONAL CERTIFICATIONS
1. CMA Certified Management Accountant
● passed the rigorous qualifying examination
● has met an experience requirement
● Participates in continuing educations
● granted by the Institute Management Accountants (IMA).
2. CPA. A Certified Public Accountant
● has met the pre-qualification educational requirements,
● passed the CPA licensure examinations given
● satisfied all other legal and regulatory requirements of a public accountant.
3. CIA.Certification in Internal Auditing
● the Institute of Internal Auditors (IIA) granting (CIA)
● must pass a comprehensive examination designed to ensure technical
competence
● have the required number of years of work experience.