The Institute of Management Accountants’ Statement of Ethical Professional Practice Standards include the standards: competence, confidentiality, credibility, and integrity. For each of the following scenarios, discuss whether one or more of the standards has been violated.

a. The controller reclassified some of the manufacturing overhead to administrative expenses so that gross margin would be in line with last year. Net income is the same.

b. The controller reclassified some of the debt due next year to long-term so that the current ratio was in line with the industry number.

c. The controller included sales for inventory that had been ordered but not shipped. Without that revenue, the company would not meet the targets required on the loans.