Background
Corporations establish business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers. Almost every company now has a business ethics program. In part, that’s because technology and digital communication have made it easier to identify and publicize ethical missteps. To avoid the negative implications, companies are devoting more resources to business ethics. In addition to establishing formal programs, companies are creating ethical workplaces by hiring the right talent and promoting ethical standards and practices among their
employees. High integrity/honesty is the second-most important skill for business leaders, according to a recent survey. Today’s business professionals must understand the link between business ethics and business success. The CIMA Code of Ethics provides a framework for ethical decision-making and behaviour for management accountants, helping to maintain trust, integrity and credibility in the profession. By adhering to these ethical principles, management accountants can contribute to the success and sustainability of the organisation’s while upholding the highest standards of professionalism and integrity.
Sources:
https://www.redlands.edu/study/schools-and-centers/business/sbblog/2019/may2019/3-reasons-why-business-ethics-important/
https://www.cimaglobal.com/Professionalism/Ethics/CIMA-code-of-ethics-forprofessional-accountants/
Task:
You are a management accountant working for a medium-sized manufacturing company that produces electronic goods. Despite being a successful business, the company lacks a formal ethical framework or code of conduct. Over time, you observed various ethical issues emerging within the organisation including the following:
You have noticed discrepancies in the financial records regarding inventory levels and procurement costs. Upon closer investigation, you discover that several suppliers have been inflating their prices, and some of the inventory records have been manipulated.
During team meetings, you hear discussion about compromising on quality standards to meet production deadlines.
Your responsibilities include analysing financial data, providing insights for decision-making, and ensuring compliance with regulatory requirements. Your role as a management accountant places you in a unique position to address these ethical dilemmas and promote higher ethical standards within the company.
Required:
Evaluate the potential consequences of the unethical practices observed within your company both in the short term and long term. Consider the impact on the stakeholders such as customers, employees, suppliers, etc.
Develop a strategy to address the ethical concerns raised in the scenario. Explain how you can leverage your role as a management accountant to promote ethics and also uphold the organisation′s values.
Outline an ethical framework plan for the company including your recommendations and findings to the senior management.
Please consider the CIMA Code of Ethics for the guidance and support of management accountants at work. Your response should demonstrate a comprehensive understanding of ethical principles, critical thinking skills, and practical strategies for promoting ethical behaviour in the workplace as a management accountant.
Guidance Notes:
You have has been asked to prepare the report which is deliverable to the senior management of the company. Your report will explore the relevant management accounting topic that will assist in business decision-making. The report must demonstrate an application of the concepts within the context and identify clear recommendations for the specific questions which are fully justified with evidence and analytical and interpretative content (rather than merely desсrіptive). Additional research outside of the course materials is expected.
The content must reflect the best understanding of the concepts and context of the team concerning the needs of the business and its members.
Structure of the report:
The 2000-word report is designed to reflect the communication of management accounting information which supports decision-making, therefore it requires recommendations for action supported by analysis of the scenario.
The report must be presented in a manner suitable for business purposes. As such, you must include the following elements:
Executive summary: (not included in word count)
Table of contents: (not included in word count)
Introduction: to the role of management accounting in the business environment– provides a context and purpose of the report. This introduction must be in your own words, and no more than 200 words in length (including in-text citations).
Main sections of the report: It is vital that the main body of the report explains the relevant content using your own words and must demonstrate critical thinking by selecting the topic within weeks 1- 5. Since your target audience is a senior management team, students are expected to explore all core management accounting methods and systems such as strategies, cost planning, cost control, cost estimation methods, CVP analysis, customer profitability etc. and they can be integrated with the main task.
In this section please have subheadings for:
Strategies
Cost planning
Cost control
Cost estimation methods
Cost-Volume-Profit analysis
Customer profitability
Decision-making.
Conclusion and recommendations: – this section includes a summary of the discussion and a list of clear and concise recommendations to senior managers.
References: (not included in word count).
Appendices: (not included in word count).
As there is an expectation that teams will engage in broader research, normal academic integrity standards apply including the use of in-text citations. Such citations are included in the word count. Quotes, if used, should be restricted to a maximum of 10% of the total word count and fully referenced.
Note: Although no figures and calculations are required, you are encouraged to be creative in the way that you perform this task including in your presentation.
Please ensure academic references are used.
The textbook for the course is Horngren′s Cost Accounting, 3rd edition.
Horngren, C, Datar S, Rajan, M, Wydner, M, Maguire, W & Tan, R 2017, Cost Accounting: A Managerial Emphasis, 3rd edn, Pearson Education Australia, Australia.