Chat with AIExam 18: The Changing Business Environment-A Managers Pers
Although some management accountants strive to update their knowledge and skills, such updating is not within the realm of management accountants' ethical standards.
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Suppose a management accountant becomes aware of a confidential but illegal act that has occurred within her company. The management accountant must consider what she is ethically bound to do about this situation. Three alternative responses to this situation are given below. State whether you agree or disagree with each, and briefly detail your reasons.
a. The accountant must remain loyal to the company at all times and should report the occurrence only to appropriate officials within the company.
b. The accountant is bound to inform officials only if she stands to personally gain (make money) from knowledge of the illegal act.
c. The accountant must exercise personal judgment; a clear-cut answer does not exist given the limited information provided.
(37) Verifieda. The confidentiality standards state that management accountants must refrain from disclosing confidential information acquired in the course of their work except when authorized, unless legally obligated to do so. As such, the student should recognize that illegal acts can be an exception to the confidentiality standard. The severity and nature of the illegal act may dictate the accountant's obligation to disclose knowledge of this act to outside officials. An example would be an act involving a felony. Although the thrust of the confidentiality standard encourages accountants to remain loyal to their company in refraining from communicating confidential information, failure to disclose knowledge of illegal acts to outside authorities may result in their being charged as an accessory to the crime. Discussing the illegal act with officials inside the company would likely be the minimum amount of communication required.
b. The confidentiality standards specifically state that management accountants should refrain from using or appearing to use confidential information acquired in the course of their work for unethical or illegal advantage either personally or through third parties. As such, if an accountant could stand to personal gain from knowledge of the illegal act, then refraining from communicating this information may give the appearance that the accountant is obtaining illegal profits from this information. Depending on the severity of the illegal act, the accountant should communicate knowledge of this act to officials inside or outside the company to avoid even the appearance of unethical behavior.
c. As noted in parts a and b, the appropriate action dictated by this situation involves consideration of the severity and consequences of the illegal act. The severity and nature of the illegal act may dictate the accountant's obligation to disclose knowledge of this act to outside officials. In all likelihood, the required procedure should at a minimum include discussing the knowledge of this act with company officials.
The objectivity standards of management accountants state that management accountants must communicate information fairly and objectively. This means essentially that accountants must perform each task
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"Hours of inspection" is an example of a nonfinancial performance measure.
(32) Management accounting is not a subsidiary activity to financial accounting.
(35) A value chain includes only processes and services that add value to the final product or service.
(30) Sinopole's Pharmaceutical Delivery Company is a high-volume business that features home delivery services to elderly shut-ins. Located in Bakersfield, California, the company currently uses six delivery trucks to service the area within a 100-mile radius of the city. Each delivery truck can make a maximum of 600 deliveries per month. In June, the demand for these deliveries totaled 3,200, and the company has been experiencing a 2 percent increase in demand, compounded monthly. In which month must the company add a seventh delivery truck, given these estimates?
(31) Which of the following is not included in the cost of quality?
(36) Financial information included in financial statements prepared for external use is past data, summarized for the user as of a particular date.
(31) Management accounting complements each stage in the management process.
(36) Management accounting must observe both financial accounting standards and cost accounting standards if it is to be useful to the organization's management.
(38) The management accountant must be knowledgeable about all relevant laws, regulations, and technical standards that pertain to his or her duties.
(38) In comparing management accounting with financial accounting, which of the following statements is true?
(41) Jillian Harmon supervises 5 cashiers at Jack's Market. In the past, each cashier served an average of 25 customers per hour. Two months ago, management remodeled the store and installed a new cash register system. Customers no longer need to take their groceries out of the basket. Last month the number of customers served was 6,120 and each cashier worked an average of 170 hours for the month. Based on this information, the service rate has
(45) Comparing actual performance with expected performance levels is an evaluation activity.
(30) Mi Casa is a housekeeping company in Brownsville, Texas. The corporation is owned 100 percent by Jean Kline. Jean plans to develop the company into a multimillion-dollar company as the demand for housekeeping services in Brownsville is increasing at a rapid pace as the community grows.
Currently, Jean has three housekeepers who each work a 40-hour week. Over the past four weeks, the actual hours worked were as follows:
Jean is concerned with the hours worked. Analyze the activity for the four weeks by preparing a table showing the estimated hours, actual hours, and the hours under (or over) estimate. Based on the information in your table, does Jean have reason for concern? If so, what could some of the possible reasons be for the hours spent?
Jean is concerned with the hours worked. Analyze the activity for the four weeks by preparing a table showing the estimated hours, actual hours, and the hours under (or over) estimate. Based on the information in your table, does Jean have reason for concern? If so, what could some of the possible reasons be for the hours spent? (32) Management accounting exists primarily for the benefit of people outside the company.
(29) The ethical standards for management accountants state that accountants are obligated to maintain professional competence at all times when dealing with
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