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MANAGEMENT ADVISORY SERVICES OCTOBER 2022 BATCH

WEEK 1
MANAGEMENT ACCOUNTING ENVIROMNENT

MANAGERS AND THEIR ACTIVITIES

Managerial Accounting – a field of accounting that provides economic and financial information for
internal users, particularly the managers or decision-makers in an organization.

Objectives of Managerial Accounting

a. Providing information for management decision making
b. Assisting managers in directing and controlling operational activities
c. Motivating managers and employees towards organizational goals
d. Measuring the performances
e. Assessing the organization’s competitive position

Managers – They organize the different resources of an entity to achieve its objective
 Organize activities: Hire people, purchase properties and supplies, etc.
 Resources: Cash, Properties, Human, Technology, Information, etc.
 Objectives: Maximize profit

Different Activities of Managers

1. Planning: involves establishing a basic strategy, selecting a course of action, and specifying how the
action will be implemented.
a. Setting Goals: Long-term (Strategic) & Short-term (Operating)
b. Selecting strategies:
i. Corporate Level: (Concentrated, Integration, and Conglomeration; Local,
Domestic, and International)
ii. Business Function Level:
a) Marketing: Cost Leadership; Product Differentiation; Market
Penetration
b) Operation/Production: Customized (Made to Order), Mass Production,
Lean Production, Mass Customization
c) Organizational: Centralized versus Decentralized = Segmentation
(Product, Functional, Geographical)
d) Financial: Conservative, Aggressive, Hedging
c. Budget: End product of the planning process that shows the different goals and planned
activities of the entity that are expressed in financial terms
2. Executing: Carrying out the activities of the business as planned
a. Directing: Telling people what to do (Objectives, Procedures, Deadlines and important
details)
b. Motivating: Telling people why they have to do it (Appreciation & Importance of duties)
c. Status Reports
3. Controlling: Evaluating the results of operation and involves ensuring that the plan is actually carried
out and is appropriately modified as circumstances change.
a. Evaluation: Planned versus Actual and Looking for improvements rather than for mistakes
b. Adjustments/Taking Corrective Actions: Maintain what is good (best practices) and replace
what is not so good
c. Performance or Variance Analysis and Status Report

Kaizen - Continuous improvement

Quantitative difference - variance

Qualitative difference - deficiency
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 All of the activities of managers above requires decision making.

Decision Making - underlying concept
- Selecting among the different alternatives.
- In performing this function, managers need information, and that information is
provided by managerial accounting

Management Accounting System – a systematic processes of control used to influence members in

organizations to achieve the firm's goals

Characteristics of Management Accounting System

1. The system should help to establish the decision-making authority over the organization’s assets
2. The information generated by the system should support planning ad decision-making.
3. The reports should provide a means for performance monitoring and evaluation

DISCUSSION QUESTIONS

1. All of the following pertains to the planning function of management, except;

a. It requires management to look ahead and establish objectives
b. Formulating the corporate strategy
c. Having a detailed look at the current external and internal business environment.
d. Obtaining feedback evaluation (controlling)

2. The following tasks are usually performed by managers during the controlling phase, except;
a. The process of keeping the company's activities on track
b. Construction of a budget planning
c. Construction of a performance-variance analysis report
d. None of the above

3. Management accounting is an integral part of the management process. As such it provides

essential information for the following objectives except:
a. Maintaining the current level of resource utilization as well as internal and external
communication.
b. Measuring and evaluating performance
c. Planning strategies and controlling current activities of the organization.
d. Enhancing objectivity in decision making.

4. The day-to-day work of management teams will typically comprise all of the following activities
except:
a. decision making.
b. planning.
c. cost minimizing. objective
d. directing operational activities.

5. Taurus Company has set various goals, and management is now taking appropriate action to ensure
that the firm achieves these goals. One such action is to reduce outlays for overhead, which have
exceeded budgeted amounts. Which of the following functions best describes this process?
a. Decision making.
b. Planning.
c. Coordinating.
d. Controlling.

6. Which of the following are associated with Planning?

a. Specifies the resources needed to achieve the company goals Action plan
b. Communicates a company's goals to employees Executing
c. Evaluating managers to determine how their performance should be rewarded or punished Controlling
d. Evaluating operations to provide information as to whether they should be changed or not Controlling

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7. A management function that measures performance against objectives, determining causes of

deviations and taking necessary corrective action
evaluating
a. Organizing
b. Planning
c. Motivating
d. Controlling

8. The primary objective of management accounting is to provide:

a. stockholders and potential investors with useful information for decision making
b. banks and other creditors with information useful in making credit decisions.
c. management with information useful for planning and control of operations.
d. supervising government agencies with information about the company's management affairs.

9. Management accounting's role in the control processes is to provide

a. managers with information that can be used to determine customer satisfaction levels.
b. investors and creditors the information about financial stability of the company.
c. managers with relevant information to compare actual results with expectations. evaluation
d. input to managers on the best ways to achieve continuous improvement in the production
process.

10. Which of the following best describes what performance evaluation should be designed to do?
a. Modify goal and objectives each month
b. Establish sales goals and targets
c. Compare actual results to plan
d. Establish blame

11. Developing a company strategy for responding to anticipated new markets is an example of:
a. decision making
b. controlling
c. planning
d. motivating

12. Obtaining feedback is generally identified most directly with the management function of evaluation
a. Planning
b. Directing and motivating
c. Controlling
d. Decision making

13. It is a field of accounting that provides financial information and nonfinancial information to an
organization's managers, and other internal decision makers.
a. Cost accounting
b. Bookkeeping
c. Managerial accounting
d. Financial accounting

14. Which of the following statements is/are correct?

a. Managers carry out their planning function by mobilizing the organization's resources and
overseeing day-to-day operations. execution rather than planning
b. Managers carry out their decision-making function by obtaining feedback to ensure that the
plans are being followed. correct but look for better answer
c. The planning, directing and motivating, and controlling functions of a manager are kept separate
from such manager's decision-making activities. should not be separate
d. The manager's planning function involves setting of the organization's goals and identifying
alternatives and selecting the alternative that best furthers such goals set for the organization.

15. Following are the principles governing the design of management accounting system, except
a. the system should help to establish the decision-making authority over the organization's assets.
b. the information generated by the system should support planning and decision-making.

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c. the reports should provide a means for performance monitoring and evaluation.
d. None of the above.

16. Management accounting is considered successful when it

a. is relevant. correct but look for better answer
b. is accurate.
c. helps managers improve their decisions.
d. is in accordance with GAAP.

17. Which of the following is not an objective of management accounting?

a. maximization of profit and minimization of costs. goal of management not the goal of
b. measuring the performance of managers of subunits.mgt acctng
c. providing information for planning and decision making.
d. providing assistance in directing and controlling operations.

18. Management Accountants

a. are found primarily at lower levels of the organizational hierarchy.
b. often work on cross-functional teams.
c. are found throughout an organization.
d. are found throughout an organization and work on cross-functional teams.

FINANCIAL ACCOUNTING VERSUS MANAGERIAL ACCOUNTING

Difference between Financial and Managerial Accounting

Financial Accounting Managerial Accounting Cost

Users External Users (Investors, Creditors, Internal Users (Management Team Acctng
Government agencies, Customers, Members: CEO, COO, Marketing -
Suppliers, etc.) Managers, Production, etc.) accumulati
Purpose General Purpose Specific Purpose & flexible ng &
Output Financial Statements Special reports to be used for reporting
Planning, Monitoring, & Controlling of costs
Types of data used Primarily Financial Financial and Non-financial
Time Orientation Historical/Past/Passive Future Oriented/Active
Guiding Principle GAAP Users’ Requirement
Reliability Relevance
Precision Timeliness
Unifying Concepts Accounting Equation (A = L + E) Management’s Decision Making
Content Pertains to the business as a whole Pertains to individual subunits of
the business
Format Highly Aggregated (Condensed) Very Detailed
Frequency Annually and sometimes Quarterly As frequently as needed by
As required by regulators management
Regulation Required and must conform to GAAP. Not required and unregulated,
Regulated by the FRSC and the SEC. since it is intended only for
management.

DISCUSSION QUESTIONS

1. All of the following pertains to Financial Accounting rather than Managerial Accounting, except:
a. Reports are provided outside the organization – external reports
b. Reports past activities – based on a historical perspective
c. Summarized data for entire company as a whole
d. Provides information to make decisions regarding the future

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2. Managerial accounting differs from financial accounting in a number of aspects, which of the
following does not pertain to the characteristics of management accounting information:
a. Does not follow GAAP and there are no reporting regulations
b. Focuses on timeliness of information
c. Reporting is focused on parts of the organization such as departments or divisions and not on
the organization as a whole.
d. Focus on precise information since they are used outside the company

3. Which of the following does not apply to the content of managerial reports?
a. Reporting standard is relevance to the decision being made.
b. May extend beyond double-entry accounting system.
c. Pertains to subunits of the business and may be very detailed.
d. Pertains to the business as a whole and is highly aggregated.

4. Managerial accounting is similar to financial accounting in that

a. both are governed by generally accepted accounting principles.
b. both deal with economic events.
c. both concentrate on historical costs. both uses historical costs but
d. both classify reported information in the same way. managerial does not concentrate on

5. Which of the following statements represents a similarity between financial and managerial
accounting?
a. Both are useful in providing information for external users.
b. Both are governed by GAAP.
c. Both draw upon data from an organization's accounting system.
d. Both rely heavily on published financial statements.

6. The unit of measurement used in management accounting is

a. primarily the historical peso. uses but not primarily
b. usually current replacement cost. not necessarily
c. any measurement unit that is useful in a particular situation.
d. the measurement unit used by competing companies.

7. The use of management accounting is

a. Optional
b. Compulsory
c. Legally obligatory
d. Compulsory to some and optional to others

8. Which of the following characteristic(s) relate(s) more to managerial accounting than to financial
accounting?
a. A focus on reporting to external parties.
b. An area of accounting that is heavily regulated.
c. A focus on providing information that is relevant for planning, decision making, directing, and
control.
d. None of the above

9. Which of the following is true of managerial accounting rather than financial accounting?
a. The outputs of this accounting system are the basic financial statements.
b. The methods of this accounting system are established by an overseeing board.
c. The accounting methods are standardized to allow comparisons among companies.
d. The accounting system would be unique to each company.

10. Which of the following statements is (are) true regarding financial and managerial accounting?
I. Both are mandatory.
II. Both rely on the same underlying financial data.
III. Both emphasize the segments of an organization, rather than just looking at the organization as
a whole.

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IV. Both are geared to the future, rather than to the past.
a. I, II, III, and IV
b. Only II, III and IV
c. Only II and III
d. Only II

11. For internal uses, managers are more concerned with receiving information that is:
a. completely objective and verifiable.
b. completely accurate and precise.
c. relevant, flexible, and immediately available.
d. relevant, completely accurate, and precise.

12. Internal reports must be communicated

a. daily
b. monthly
c. annually
d. as needed

13. Which consideration influences the frequency of an internal report?

a. The wishes of the managers receiving the report.
b. The frequency with which decisions that require the information are made.
c. The cost of preparing the report.
d. All of the given choices.

14. Which of the following is most associated with managerial accounting?

a. Must follow generally accepted accounting principles.
b. May rely on estimates and forecasts.
c. Is prepared for users outside the organization.
d. Always reports on the entire entity.

15. Which statement about the extent of detail in a management accounting report is true?
a. It may depend on the frequency of the report.
b. It depends on the type of manager receiving the report.
c. It depends on the level of the manager receiving the report.
d. All of the given choices.

16. In which of the following aspects is managerial accounting similar to financial accounting?
a. users of reports
b. emphasis between the past and future
c. type of data provided to users
d. reliance on the accounting database

17. Which of the following describes management accounting information?

a. It is prepared for shareholders.
b. It is reliable and verifiable.
c. It is prepared in accordance with GAAP
d. It provides reasonable and timely estimates.

18. In financial accounting, certain rules and regulations must be followed on how financial statements
must be presented to readers. In managerial accounting, no such restrictions generally apply
because it is
a. an entirely different field that need not observe the broad guidelines in financial accounting. not entirely
b. designed to provide management with non-financial information for decision-making.
c. designed to provide accounting and other financial data to assist management in making
business decisions.
d. a discipline that does not require preparation of financial statements.

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CONTROLLER VERSUS TREASURER

The Finance Department record/report inflow/outflow

Chief Financial Officer Controller/Chief Accountant Treasurer
(CFO)
• Primary responsible/ •
Responsible for the Financial • Responsible for the
Executive Officer Information Financial Transactions
• Coordinates the • Preparation of budgets, FS, tax • Investment management
activities within the returns, Analysis, etc. • Credit and collection
Finance Department • Planning and Control • Relationships with financial
• Reporting and Interpreting institutions and investors
• Evaluating and Consulting • Provision of capital
• Tax Administration • Short-term financing
• Government Reporting • Banking and Custody
• Protection of Assets • Insurance
• Economic Appraisal
Subordinates/Subdivision: Subordinates/Subdivision: Subordinates/Subdivision:
• Controller/Chief • General Accounting • Credit Department
Accountant (bookkeeping-transaction • Cashier
• Treasurer recording • Investments
• Cost Accounting • Debt Management
• Budgeting • Investor’s Relation
• Tax and Government • Cash Department
Reporting
• Financial analysis

DISCUSSION QUESTIONS

1. All of the following will be under the responsibility of the controller except:
a. Responsible for the maintenance of adequate internal control
b. Preparation of accounting records
c. Planning and controlling the company cash position
d. None of the above

2. If you are appointed as the treasurer of a corporation, which of the following will least likely be part
of your responsibilities?
a. Custody of the company funds
b. Responsibility for relations with the company's financial institutions and major creditors
c. Responsible for the preparation of budget and performance evaluation report.
d. Obtains and manages the corporation`s capital

3. Mr. Jay Cruz has recently been hired as the controller of Calapan Corporation. One of the
responsibilities that Mr. Cruz will perform will include;
a. Preparation of tax returns, the annual report, and Securities and Exchange Commission (SEC)
filing.
b. Managing corporate assets
c. Planning the finances and capital expenditures
d. Investor relations

4. The treasurer of a company is usually responsible for all of the following, except:
a. Managing the investment portfolio
b. Receiving and recording requests for disbursements not recording
c. Formulating credit policy
d. None of the above

5. All of the following describes the characteristics of a controller’s responsibility, except:

a. Interpretation of financial data

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b. Appraisal of results of operation and making Recommendations

c. Usually looks at what has occurred rather than what should or will happen.
d. Emphasizes cash flow

6. The controller of a company or other organization is

a. a staff manager
b. an operating manager
c. an accountant, not a manager
d. a natural manager.

7. Which management position is responsible for raising capital?

a. Internal auditor
b. Treasurer
c. Controller
d. CFO

8. The treasurer function is usually not concerned with

a. investor relations.
b. financial reports.
c. short-term financing.
d. credit extension and collection of bad debts.

9. Which of the following duties is usually assigned to the controller?

a. directing the granting of credit to clients inflows
b. investing the organization's funds
c. tax planning
d. independently evaluating the firm's financial statements auditor

10. The treasury function includes

a. preparation of tax returns.
b. cash custody and banking.
c. reporting to government.
d. financial reporting.

LINE VERSUS STAFF POSITION

Organizational Structure – it refers to the method of how a business organization put together its
people and their respective positions that will result in the most effective and efficient operation.

Organizational Chart – shows the levels of responsibility and formal channels of communication in an
organization.

Types of Organizational Structure

1. Centralized – decision making is exclusive to one person or group of person.
2. Decentralized – decision making is delegated to the lowest possible managerial position (more
on decentralization under Responsibility Accounting)

Types of Position
Basic Line Position Staff Position
Classification • They are directly involved in • They assist and support those in
achieving the basic objectives of an the line position
organization. • Example: HR Manager; Controller,
• Example: Sales managers; Head of Security
Production supervisor
Value Chain - a Primary activities Support activities
chain of activities • Inbound logistics - concerned with • Procurement – is responsible for
that a firm receiving the materials from purchasing the materials that are

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operating in a suppliers, storing these externally necessary for the company’s

specific industry sourced materials, and handling operations. An efficient
performs in order them within the firm. procurement department should
to deliver a • Operations – related to the be able to obtain the highest
valuable product production of products and quality goods at the lowest prices.
or service for services. This area can be split into • Human Resource Management – a
the market. more departments in certain function concerned
companies. with recruiting, training,
• Outbound logistics – concerned motivating and rewarding the
with distributing the final product workforce of the company.
and/or service to the customers. Human resources are increasingly
• Marketing and sales – this becoming an important way of
functional area essentially analyses attaining sustainable competitive
the needs and wants of customers advantage.
and is responsible for creating • Technology Development –
awareness among the target concerned with technological
audience of the company about innovation, training and
the firm’s products and services. knowledge that is crucial for most
Companies make use of marketing companies today in order to
communications tools survive.
like advertising, sales • Firm Infrastructure – includes
promotions etc. to attract planning and control systems,
customers to their products. such as finance, accounting, and
• Service – a need to provide corporate strategy etc.
services like pre-installation or
after-sales service before or after
the sale of the product or service.

DISCUSSION QUESTIONS

1. Which of the following are least likely to be a staff position?

a. Vice President for Human Resources and Development
b. Vice President for Government Relations
c. Logistics Area Manager
d. Executive Assistant to the President

2. The following positions are considered to have a staff authority, which is the exception?
a. Controller for a manufacturer
b. Corporate Legal Counsel of a Manufacturer
c. Product Manager of diversified company
d. Human Resource Manager of a Utility Company

3. All of the following are considered to have line authority, except:

a. Vice President for Plant Operation
b. Vice President for Sales of a Computer Manufacturer
c. Director for research and development of a technology-based corporation
d. None of the above

4. Which of the following employees would be considered as holding a line position?

a. Exxon Corporation's vice-president for government relations.
b. The controller of General Motors.
c. A secretary employed by Verizon Communications.
d. The manager of food and beverage services at Disney's Magic Kingdom.

5. Which of the following employees at Starbucks would likely be considered as holding a staff
position?
a. The company's chief operating officer (COO).

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b. The company's lead, in-house attorney.

c. The company's chief financial officer (CFO).
d. Choices "b" and "c" above.

6. Primary processes in the value chain are comprised of

a. Marketing, legal and accounting services.
b. Research and development, marketing, supply, design, production, distribution, and information
systems.
c. Research and development, design, supply, production, marketing, distribution and customer
service.
d. Human resources, legal services, information systems and management accounting.

7. For a hospital, which of the following positions will most likely be classified as a staff position?
a. Emergency Room Manager
b. Human Resources Manager
c. Head Nurse
d. None of the above

8. In a technology company, which department/s will most likely be classified as line position?
a. Building Maintenance Department
b. Accounting Department
c. Research and Development Department
d. None of the above

9. Each of the following would be considered a staff function EXCEPT the:

a. vice-president of finance
b. vice-president of corporate planning
c. vice-president of research and development generic since may R&D na hindi direct sa
d. vice president of marketing product. should be specific. there's a
better answer
10. Management accountants generally exercise which type of authority?
a. Company
b. Functional.
c. Line
d. Staff.

11. A staff position:

a. relates directly to the carrying out of the basic objectives of the organization
b. is supportive in nature, providing service and assistance to other parts of the organization.
c. is superior in authority to a line position.
d. none of these.

CODE OF ETHICS FOR MANAGEMENT ACCOUNTANTS

Principles
Institute of Management Accountants (IMA) overarching ethical principles include: Honesty, Fairness,
Objectivity, and Responsibility. Members shall act in accordance with these principles and shall
encourage others within their organizations to adhere to them.

Standards
IMA members have a responsibility to comply with and uphold the standards of Competence,
Confidentiality, Integrity, and Credibility. Failure to comply may result in disciplinary action.

I. COMPETENCE quality of information

1. Maintain an appropriate level of expertise by continuing developing knowledge and skills
2. Perform duties in accordance with relevant laws, regulations and technical standards

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3. Provide decision support information and recommendations that are accurate, clear, concise
and timely
4. Recognize and communicate professional limitations or other constraints that would preclude
responsible judgment or successful performance of an activity.

II. CONFIDENTIALITY usage ng information

1. Keep information confidential except when disclosure is authorized or legally required.
2. Inform all relevant parties regarding appropriate use of confidential information. Monitor
subordinates’ activities to ensure compliance.
3. Refrain from using confidential information for unethical and illegal advantage.

III. INTEGRITY
1. Mitigate actual conflict of interest, regularly communicate with business associates to avoid
apparent conflicts of interest. Advise all parties of any potential conflicts.
2. Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
3. Abstain from engaging in or supporting any activity that might discredit the profession.

IV. CREDIBILTY honesty of information

1. Communicate information fairly and objectively
2. Disclose all relevant information that could reasonably be expected to influence an intended
user’s understanding of the reports, analyses, or recommendations.
3. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in
conformance with organization policy and/or applicable law.

RESOLUTION OF ETHICAL CONFLICT

In applying the Standards of Ethical Professional Practice, you may encounter problems identifying
unethical behavior or resolving an ethical conflict. When faced with ethical issues, you should follow
your organization’s established policies on the resolution of such conflict. If these policies do not resolve
the ethical conflict, you should consider the following courses of action:
1. Discuss the issue with your immediate supervisor except when it appears that the supervisor is
involved. In that case, present the issue to the next level. If you cannot achieve a satisfactory
resolution, submit the issue to the next management level. If your immediate superior is the chief
executive officer or equivalent, the acceptable reviewing authority may be a group such as the audit
committee, executive committee, board of directors, board of trustees, or owners. Contact with
levels above the immediate superior should be initiated only with your superior’s knowledge,
assuming he or she is not involved. Communication of such problems to authorities or individuals
not employed or engaged by the organization is not considered appropriate, unless you believe
there is a clear violation of the law.
2. Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics counselor or
other impartial advisor to obtain a better understanding of possible courses of action.
3. Consult your own attorney as to legal obligations and rights concerning the ethical conflict.

DISCUSSION QUESTIONS

1. Which of the following is least likely an element of integrity?

a. Communicate information fairly and objectively credibility
b. Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
c. Mitigate actual conflicts of interest
d. Regularly communicate with business associates to avoid apparent conflicts of interest.

2. All of the following is considered to be an element of Credibility, except:

a. Communicate information fairly and objectively
b. Disclose all information that would reasonably be expected to influence an intended user’s
understanding of the reports, analyses, or recommendation.
c. Inform all relevant parties regarding appropriate use of information. confidentiality
d. None of the above

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3. Which of the following is most likely an element of Competence?

a. Refrain from using information for unethical or illegal advantage confidentiality
b. Communicate information fairly and objectively credibility
c. Mitigate actual conflicts of interest integrity
d. Perform professional duties in accordance with relevant laws, regulations and technical
standards

4. Which of the following will most likely be considered as an element of Confidentiality?

a. Maintain an appropriate level of professional expertise continually developing knowledge and
skills competence
b. Provide decision support information and recommendation that are accurate, clear, concise and
timely. competence
c. Keep information from other parties except when disclosure is authorized or legally required.
d. Both a and b is correct

5. Assume that a managerial accountant regularly communicates with business associates to avoid
conflicts of interest and advises relevant parties of potential conflicts. In so doing, the accountant
will have applied the ethical standard of:
a. objectivity.
b. confidentiality.
c. integrity.
d. credibility.

6. According to IMA of Ethical Professional Practice, what should a management accountant do if a

significant ethical situation can't be resolved?
a. The accountant should try to rationalize and understand the position of the other party.
b. The accountant should say nothing about the matter until he or she has retired.
c. The accountant should confront the guilty party and demand the unethical action be stopped.
d. The accountant should first discuss the matter with the immediate supervisor.

7. To determine whether a particular action is professionally ethical or not, using the Institute of
Management Accountants Statement of Ethical Professional Practice, it is necessary to know:
a. whether the act is legal in your jurisdiction.
b. the intent and the business context of the act.
c. the amount of the fraud or theft that is involved.
d. whether the management accountant is certified.

8. Under which ethical standard of conduct does the managerial accountant have the responsibility to
disclose fully all relevant information that could reasonably be expected to influence an intended
user's understanding of the reports, comments, and recommendations presented?
a. Credibility about being honest
b. confidentiality
c. competence
d. integrity

9. Under which ethical standard of conduct does the managerial accountant have the responsibility to
refuse any gift, favor, or hospitality that would influence or appear to influence his or her decision?
a. competence
b. confidentiality
c. integrity
d. objectivity

10. Which of the following statements is true regarding ethics in decision-making?

a. Since most business decisions are simply a matter of economics, ethical considerations should
be ignored.
b. Decision-making can have an ethical as well as an economic impact.
c. Managerial accountants do not face ethical issues.

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d. Business managers will always agree on ethical choices.

11. Provisions in this section of Ethical Standards for Management Accountants require management
accountants to develop their knowledge and skills and to do their tasks in accordance with relevant
laws, regulations, and standards.
a. Competence
b. Confidentiality
c. Integrity
d. Objectivity

12. Integrity is an ethical requirement for all management accountants. One aspect of integrity requires
a. maintenance of an appropriate level of professional competence.
b. performance of professional duties in accordance with applicable laws.
c. refraining from improper use of confidential information.
d. avoidance of actual or apparent conflicts of interest and advise all appropriate parties of any
potential conflict.

END

MANAGEMENT ACCOUNTING ENVIRONMENT 13