Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
Integrity The management accountant has a responsibility to avoid actual or apparent conflicts of interest and advise all appropriate parties of any potential conflict. Törnman’s
motivation for wanting Lantto to revise the quality figures could well have been motivated by Törnman’s desire to please the plant manager. This action could be viewed as violating the responsibility for integrity. The Standards of Ethical Conduct require the management accountant to communicate unfavourable as well as favourable information. In this regard both Törnman’s and Lantto’s behaviour (if Lantto agrees to modify the costs of quality numbers) could be viewed as unethical.
Objectivity The management accountant’s standards of ethical conduct require that information should be fairly and objectively communicated and that all relevant information should be disclosed. From a management accountant’s standpoint, adjusting the quality numbers to make quality performance look good would violate the standard of objectivity. For the
various reasons cited above, we should take the position that Törnman’s and Lantto’s behaviour (if Lantto goes along with Törnman’s wishes) is unethical.
Lantto should indicate to Törnman that the costs of quality and non-financial measures of quality presented in the reports are indeed appropriate. If Törnman still insists on modifying the quality numbers and reporting better quality figures, Lantto should
raise the matter with one of Törnman’s superiors, other than Töyrä, who happens to have a vested interest in this dispute. If,
after taking all these steps, there is continued pressure to overstate quality performance, Lantto should consider
resigning from the company, and not engage in unethical behaviour.
309
© Pearson Education Limited 2012
Share with your friends: