Essay on The Ethics Of Managerial Accounting

767 Words Oct 12th, 2015 4 Pages
Significance of ethics in managerial accounting is obvious: if managerial accountants don’t follow four ethical principles which include Honesty, Fairness, Objectivity, and Responsibility, the data provided by them to business owners and decision makes won’t be factual and objective. Disclosed information by an accountant might lead a business to serious problems and legal implications. Everyone within an organization is required to follow the four IMA’s overarching ethical principles and adhere to them.

In the described situation that happened in Hi-Power Mower Company, the following stakeholders are affected by Marcus’s actions: Marcus Lum (the cost accountant for Hi-Power Mower Company), Marcus’s friend Ray Pon (the production manager for the 18-horsepower Supercut model), and the Hi-Power Mower Company’s management.

Marcus has to report his analysis results to management. Meanwhile, his friend insists that he changes the figures so that the production of Supercut is continued. Whatever decision Marcus makes, he is a primary stakeholder.

Moreover, Ray Pon is a stakeholder too. Ray was the one who condemned the new costing system and insisted that Marcus changed the report so that he didn’t to lose a job. He will be impacted by this issue and by Marcus’s decision.

Additionally, Marcus will be reporting his analysis and calculations to the management. Whether he reports actual numbers showing a loss caused by the Supercut production, or changes some numbers so that his…

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