Question

For each of the situations listed, identify the primary standard from the IMA Statement of Ethical Professional Practice that is violated (competence, confidentiality, integrity, or credibility). Refer to Exhibit 1- 6 for the complete standard.
a. Darryl does not disclose to upper management that his sister is a partner in the ­accounting firm that the company is hiring for the audit.
b. Lamar is an accountant at Boise & Hall, Inc. Lamar confides to a close friend that he is concerned about the future of Boise & Hall. Lamar explains that operating cash flows are negative; this information is on the not- yet- released financial statements.
c. Patsy is an accountant at Highland Restaurant Group, Inc. She has helped to prepare the financial statements. She knows that the internal controls over cash are weak, but she does not speak up because she feels that it is not her job.
d. Teri uses the indirect method to prepare the statement of cash flows even though her company has adopted International Financial Reporting Standards. She is unfamiliar with the steps required to produce a statement using the direct method.
e. The statement of cash flows has never been Julius’ strength; he struggled with it in school. This year, Julius cannot get the statement of cash flows to balance, so he ­decides to hide the amount that the statement is off by adding that difference to one of the items in the operating section.



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  • CreatedAugust 27, 2014
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