LP 9.2 Assignment

Read ethical issue 23-1 and 23-2 on page 1149. Write a 500-750 word report answering the following questions:

1. Use the IMA's ethical guidelines to identify the ethical dilemma in each situation hosted by www.imanet.org.

2. Identify the relevant factors in each situation and suggest what lane should be recommended to the controller.

Ethical Issue 23-1 Lane has been approached by Casey Henderson, a former colleague who worked with Lane when they were both employed by a public accounting firm. Henderson has recently started his own firm, Henderson Benchmarking Associates, which collects and sells data on industry benchmarks. He offers to provide Lane with benchmarks for the outdoor furniture industry free of charge if she will provide him with the last three years of outdoor Living's standard and actual costs. Henderson explains that this is how he obtains most of his firm's benchmarking data. Lane always has a difficult time with the standard-setting process and believes that the benchmark data would be fery useful.

Ethical Issue 23-2 Outdoor Living's management is starting a continuous improvement policy that requires a 10% reduction in standard costs each year for the next three years. Dan Jacobs, manufacturing foreman of the Teak furniture line, asks Lane to set loose standard costs this year before the continuous improvement policy is implemented. Jacobs argues that there is no other way to meet the tightening standards while maintaining the high quality of the Teak line.

Requirements

1. Use the IMA's ethical guidelines (https://www.imanet.org/PDFs/Statement%20of%20 ethics_web.pdf) to identify the ethical dilemma in each situation.

2. Identify the relevant factors in each situation and suggest what Lane should recommend to the controller.