Question: For each of the situations listed identify the primary standard

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.
1. Stanley does not know how to categorize fixed costs as unavoidable or avoidable, so he guesses on the categorization of each fixed cost.
2. Connor Advertising Agency is looking at whether to continue to do its own payroll ­in- house or to outsource it to a payroll firm (a classic “make- or- buy” decision). Elsie, an accountant at Connor, does not tell management that the payroll firm bidding on the work is owned and managed by her mother.
3. Sarah is a management accountant at a large electronics firm. She is instructed to pre-pare an analysis of the performance of an underperforming company division. Since Sarah is afraid that many employees could lose their jobs if that division appears to be underperforming, Sarah underestimates the amount of expenses generated by that division. Sarah hopes that the division is not discontinued.
4. Latoya, a CPA and a CMA, makes a YouTube video bragging about loopholes she has found to avoid taxes. These loopholes are questionable at best.
5. Seymour is the controller for a small manufacturer. He mentions to a close friend that his company is going to start off shoring production to decrease labor costs.

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  • CreatedAugust 27, 2014
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