What do you think of when you hear the name Enron? How about Madoff? Other names and examples could be multiplied of infamously unethical businesses and individuals.
Finance and accounting professionals all aspire to avoid white collar prison, of course. At the same time, we hear stories and read numerous case studies and articles about those who play fast and loose with laws and regulations, thereby landing themselves in jail. Clearly, it is not enough to simply hope to avoid prison; an ethical professional must resolve beforehand to follow the highest standards of integrity, especially when times of testing come in the “real world.”
One key aspect of being in a profession is conducting oneself according to standards of professional practice. Doctors, lawyers, professional engineers, architects, and various other professionals are expected to master a body of knowledge, obtain experience and certifications, and pledge to perform their work with the highest level of integrity and competence.
The Institute of Management Accountants (IMA) is a highly regarded organization for accountants and finance professionals. Although the CPA designation is the most sought after credential within the accounting profession, the IMA’s Certified Management Accountant (CMA) designation is also well respected.
The IMA has the following four standards to which the organization holds CMAs accountable, and these are highly relevant and worthwhile for all accountants and finance professionals to consider:
- Competence – The IMA’s standard emphasizes continual professional development, legal and regulatory compliance, effective decision support recommendations, and clarity in communicating limitations in performing work.
- Confidentiality – The standard requires confidentiality except when disclosure is authorized or required, communication and monitoring of confidentiality standards, and refraining from using confidential information for unethical or illegal purposes.
- Integrity – CMAs and other accounting/finance professionals should proactively avoid actual or apparent conflicts of interest, should avoid activities that would compromise ethical conduct, and should do nothing to discredit the profession.
- Credibility – The IMA requires members to communicate fairly and objectively, disclose relevant information (i.e., information that could influence intended users’ understanding and decision-making), and disclose areas of deficiency or noncompliance with laws and policies.
Professional ethics has been and will continue to be a growing area of importance for finance and accounting professionals. We will explore this topic in more depth in future installments.