logo image

Importance of Business Ethics in Managerial Accounting Essay

When companies don’t see the Importance of business ethics In managerial accounting they usually end up down the same road as Enron: bankrupt. And while that isn’t always true, the importance of business ethics in managerial accounting cannot be understated If you want your company to be a success. Why Ethics Is Important in Managerial Accounting The Enron scandal is probably the most well-known example of improper accounting ethics on the part of a business’ managers.

But others companies have also played a ole in increasing awareness about the importance of ethics in the business community: World, Rite Aid, and Global Crossing, to name a few. Financial reversals, Jail terms, and business collapse have been the fruit reaped from unethically-sown business practices by these entitles. But the financial reversals experienced by average investors and others who trusted the leadership involved in these company’s accounting practices have also suffered, spurring regulatory changes to protect the average person in the future.

Competence and Confidentiality There are four ethical components of the IMAM of the united States (Institute of Management Accountants): competence, confidentiality, Integrity, and credibility. Integrity and Credibility Third, it is important that managerial accountants refrain from any activity that could be construed as

Need essay sample on "Importance of Business Ethics in Managerial Accounting"? We will write a custom essay sample specifically for you for only $ 13.90/page

a conflict of interest. Managerial accountants that participate In activities that are a clear conflict of interest are breeding distrust.

Even if they are not showing any favoritism to a production shift supervisor who happens to be a relative, other shift supervisors will assume that they are fudging numbers if that supervisor’s production performance Is better. Fourth, honoring ethical procedures in managerial accounting cannot be accomplished unless the managerial accountant discloses any and all relevant information available to the person making a decision that will impact the company.

To do otherwise is not only unethical; it limits the decision-maker from making an Informed decision, thus Jeopardizing the businesses success as a whole. Unethical, untrustworthy Managerial Accountants Businesses rely on word of mouth and past conduct to customers and creditors to remain successful. A company’s day-etc-day managerial accountants are relied upon to portray accurate market purchasing trends, inventory quantity levels, as well as 1 OFF If the managerial accountant is unethical, these numbers could be skewed.

And skewed accounting reports can result in not having needed supplies on hand to produce and meet orders, as purchasing agents rely on these reports. It can result in overestimating and the ability to pay creditors, resulting in UN-kept financial commitments. And, it can result in faulty premises regarding the financial viability of the company when making decisions to expand to new markets or add additional product lines. Thus, the importance of ethics in managerial accounting boils down to the potential of business success or business failure.

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy