When you are getting accounting and tax services in Malaysia, you will find that some firms also provide managerial accounting services as well.
For those of you who do not know, Managerial Accounting is deemed as an internal business function. It is solely responsible for the management of a company’s financial data.
Company executives may use this to help them allocate business costs to services and goods, help them forecast production sales and output, and it also helps them prepare operation budgets, among many other things.
Just like any other accounting stint, ethics is highly regarded and is a crucial part of managerial accounting. Companies should develop a professional code of ethics to help accountants operate with ethical obligations in mind.
In today’s article, I will go over some important things you need to know concerning Ethics in Managerial Accounting.
There is always a governing body that will create regulations and ethical obligations for professionals to follow. For management accountants, the rules that they have to follow when they operate are set by the Institute of Management Accountants.
The guidelines can be followed by license management accountants, but they can also be followed by those who are non-licensed as well.
The guidelines concerning the ethical principles are based on responsibility, objectivity, honesty, and fairness.
Members of the IMA must always follow these principles every day they work- either in a company setting or just as a citizen of the state.
There are ethical standards that every accountant in the managerial accounting industry must follow: integrity, competence, confidentiality, and credibility.
Talking about integrity, managerial accountants are prohibited from engaging in unethical practices. Competence speaks about an accountant’s professional expertise, as well as their personal abilities that they can use in their work.
Confidentiality means that the accountant should never disclose information unless otherwise told to by their superiors and by a court of law.
Lastly, their credibility refers to the worker’s capacity to communicate sensitive accounting information as objectively and as fairly as possible to all business stakeholders.
The gist of managerial ethics is to ensure that all of the company’s financial information is reported only to the directors, managers, and business owners at all times. The information that is given to these people should always be authentic, objective, and as detailed as possible.
Accountants who use the information for personal gain or those that do not fully report the entire financial situation of the company may face serious legal consequences.
It is important to note that all business owners would require all kinds of information to be reported to them- whether or not it is good or bad. That is true because the data that is presented to them will help influence their decisions about the company and where it is headed in the future.
There is a misconception that all businesses operate with some unethical practices being deemed as “not illegal”. However, this is actually not true as good companies are always following the guidelines and rules set by professional regulatory boards and organizations.