Ethical Responsibility in Managerial Accounting
Through managerial accounting, organizations receive the information they need so that they can plan, make decisions, and oversee business processes. Although an organization’s accounting statements (both internal and external) should fully and transparently reflect the organization’s actual financial situation, sometimes they do not. Sometimes there is intentional deception or fraud. Yet, even when an organization uses legal and accepted accounting practices, accounting statements may fail to present risks or explain unusual costs, profits, or assumptions. In this Discussion, you will consider your professional experience to recommend ways to ensure ethical responsibility within an organization.
To prepare for this Discussion:
- Think about a time in your professional experience when a decision was made based on inaccurate accounting information or unethical behavior resulting in fraudulent information. If you do not have professional experience directly related to accounting and decision making, research a situation in which inaccurate or fraudulent accounting information was provided by a company. Consider the outcomes of utilizing fraudulent accounting information for decision making and research how to avoid such situations.
Post your proposed recommendations for ensuring ethical responsibility within an organization, to include the following:
- Describe the situation from either your professional experience or your research in which unethical or fraudulent behavior occurred. If you are describing an example from experience, please do not report real names of either the company or individuals. If you are using an example from research, you must include the reference and citation of the source.
- As a manager, explain the steps you would have taken or did take to address the described unethical behavior. What methods or techniques could have been used to both detect and mitigate the described situation?
- As a manager, propose what actions you could take to help prevent situations of unethical or fraudulent behavior in managerial accounting.
Account for Management Decision Making
Week 9 Learning Resources
Organizational Ethics
Do all organizations act in an ethical manner? Before this question can be answered, it is important to understand what ethics are. Through these resources, you will determine what constitutes ethical behavior and how it impacts the people working in an organization as well as the organizational culture.
· Byars, S. M., & Stanberry, K. (2018). IntroductionLinks to an external site. . In Business ethics . OpenStax. https://openstax.org/books/business-ethics/pages/1-introduction
· Byars, S. M., & Stanberry, K. (2018). 1.1 being a professional of integrityLinks to an external site. . In Business ethics. OpenStax. https://openstax.org/books/business-ethics/pages/1-1-being-a-professional-of-integrity
· Byars, S. M., & Stanberry, K. (2018). 1.2 ethics and profitabilityLinks to an external site. . In Business ethics . OpenStax. https://openstax.org/books/business-ethics/pages/1-2-ethics-and-profitability
· Byars, S. M., & Stanberry, K. (2018). 1.3 multiple versus single ethical standardsLinks to an external site. . In Business ethics . OpenStax. https://openstax.org/books/business-ethics/pages/1-3-multiple-versus-single-ethical-standards
· Hess, M. F., & Broughton, E. (2014, July–August). Fostering an ethical organization from the bottom up and the outside inLinks to an external site. . Business Horizons, 57 (4), 541–549. https://doi.org/10.1016/j.bushor.2014.02.004
· TED-Ed. (2015, June 8). How people rationalize fraud – Kelly Richmond Pope Links to an external site. [Video]. YouTube. https://www.youtube.com/watch?v=Tb6QX9Yy1GM
Ethics in Accounting
Ethical accounting is extremely important. If anyone with access to the accounting records decides to make changes to those records for whatever reason, the implications can be far reaching. Investors, lenders, customers, and other employees might make decisions—based on the unethical accounting—that they might not have made if they had a true picture of the accounting records.
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 1.4 describe the role of the institute of management accountants and the use of ethical standardsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/1-4-describe-the-role-of-the-institute-of-management-accountants-and-the-use-of-ethical-standards
· Gottschalk, P. (2019). Evaluation of fraud examinations: The case of inappropriate accounting practices at Fuji XeroxLinks to an external site. . Deviant Behavior, 40 (11), 1421–1427. https://doi.org/10.1080/01639625.2018.1559640
· Walden University, LLC. (2024). Unethical accounting practices Download Unethical accounting practices [PDF]. Walden University Canvas. https://waldenu.instructure.com