F. Professional Ethics

  1. Business ethics
    a. Ethical decision making
    b. Types of business fraud
  2. Ethical considerations for management accounting and financial management professionals
    a. The IMA Statement of Ethical Professional Practice
    b. Fraud triangle
    c. Evaluation and resolution of ethical issues
  3. Ethical considerations for the organization
    a. Organizational factors and ethical culture
    b. Ethical leadership
    c. Legal compliance
    d. Responsibility for ethical conduct
    e. Sustainability and social responsibility
    f. Data ethics

Ethics may be tested in conjunction with any topic area.

Part 2 – Section F.1 Business ethics

The candidate should be able to:

  • a. define business ethics
  • b. define the concepts of fairness, integrity, due diligence, and fiduciary responsibility, and how they impact ethical decision making
  • c. identify and explain the different types of business fraud, such as asset misappropriation, manipulation of financial statements, cash and inventory theft, payroll fraud, fake suppliers, and accounts receivable fraud

Part 2 – Section F.2. Ethical considerations for management accounting and financial management professionals

Using the standards outlined in the IMA Statement of Ethical Professional Practice, the candidate should be able to:

  • a. identify and describe the four overarching ethical principles and the four standards
  • b. evaluate a given business situation for its ethical implications
  • c. identify and describe relevant standards that may have been violated in a given business situation and explain why the specific standards are applicable
  • d. recommend a course of action for management accounting and financial management professionals to take when confronted with an ethical dilemma in the business environment
  • e. evaluate and propose resolutions for ethical issues such as fraudulent reporting or improper manipulation of forecasts, analyses, results, and budgets

Using the fraud triangle model, the candidate should be able to:

  • f. identify the three components of the triangle
  • g. use the model to explain how a management accounting and financial management professional can identify and manage the risk of fraud

Part 2 – Section F.3. Ethical considerations for the organization

The candidate should be able to:

  • a. discuss the issues organizations face in applying their values and ethical standards internationally
  • b. demonstrate an understanding of the relationship between ethics and internal controls
  • c. define corporate culture and demonstrate an understanding of the role corporate culture plays in ethical decision making
  • d. demonstrate an understanding of the importance of a code of conduct and how it contributes to an organization’s ethical culture
  • e. demonstrate an understanding of the ways ethical values benefit an organization
  • f. analyze the impact of groupthink on ethical behavior
  • g. discuss how diversity of thought can lead to good ethical decisions
  • h. demonstrate an understanding of the role of “leadership by example” or “tone at the top” in determining an organization’s ethical environment
  • i. define ethical leadership, and identify and explain the traits of ethical leaders
  • j. explain the importance of creating a climate where “doing the right thing” is expected (e.g., hiring the right people, providing them with training, and practicing consistent values-based leadership)
  • k. explain the importance of an organization’s core values and how they promote ethical behavior and ethical decision making
  • l. discuss the importance of employee training to maintaining an ethical organizational culture
  • m. explain the importance of a whistleblowing framework to maintain an ethical organizational culture
  • n. demonstrate an understanding of the differences between ethical and legal behavior
  • o. identify the purpose of anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act
  • p. discuss corporate responsibility for ethical conduct
  • q. define and demonstrate an understanding of the major issues of sustainability and social responsibility
  • r. identify and define the four levels of social responsibility: economic, legal, ethical, and philanthropic
  • s. identify and define the three conceptual spheres of sustainability: economic, environmental, and social
  • t. define data ethics and explain the principles of fairness, privacy, transparency,ownership, and accountability with respect to how companies and artificial intelligence (AI) models use and maintain the data they collect
  • u. demonstrate a general understanding of the purpose of governmental data protection regulations