Presentation on

ETHICAL DILEMA AND

CIMAS RESPONSE
August 11, 2015

NABA K. MUNI, FCMA (F-0302)

OD SPECIALIST, IBTCI, USA

ETHICAL DILEMA
INTIGRITY Ethical Dilema and CIMAs Response
OBJECTIVITY Ethical Dilema and CIMAs Response
PROFESSIONAL COMPETENCE & DUE CARE Ethical Dilema
and CIMAs Response
CONFIDENTIALITY Ethical Dilema and CIMAs Response
PROFESSIONAL BEHAVIOUR Ethical Dilema and CIMAs
Response

THE PATHWAYS

ETHICAL DILEMA INTIGRITY

EXAMPLE 1
I have found an error going back years that will have caused a loss to our
supplier
THE DILEMMA
My firm has a contract with a supplier thats paid on the basis of a
percentage of a volume of a certain product. I have found an error going
back three years that will have caused a loss to the supplier. I would like to
address the issue openly and compensate the firm directly, but my
colleagues in management would prefer to adjust the forthcoming reports
and make up the difference that way.
CIMAS RESPONSE
Integrity (section 110) is under threat here, undermining fair dealing and
truthfulness. Openness now would be far better than the issue being
uncovered and the organisation being seen as deceitful. Section 100.10
recognises that violations may occur inadvertently, but they should be
corrected promptly and any necessary safeguards applied.

ETHICAL DILEMA OBJECTIVITY

EXAMPLE 2
Im asked to channel profits from one company to prop up another
THE DILEMMA
My line manager has asked me to channel profits from one company to
prop up another that is failing by creating invoices for services that have
not been provided. I have raised my concerns in writing, but I feel that I
should also inform more senior managers in the organisation.
CIMAS RESPONSE
As well as section 110.2 of the code of ethics, which warns against
association with false or misleading information, section 100.25
(Communicating with those charged with governance) states that, if the
professional accountant generally communicates with a sub-group of those
charged with governance for example, an audit committee or an
individual they should then weigh up whether its necessary to get in
touch with all those within the entitys governance structure so the most
appropriate person can be informed.

ETHICAL DILEMA PROFESSIONAL

COMPETENCE & DUE CARE
EXAMPLE 3
The Finance Director was made redundant and Im concerned Im
expected to undertake aspects of the role.
THE DILEMMA
The finance director in my company was recently made redundant. As
financial controller, I m onerne tht theres n assumption I may undertake
aspects of the role. Some of these are beyond the remit of my contract and
I am already stretched, having lost other members of my team. I do not feel
I should be signing off anything that a director has formal responsibility
for to the board.
CIMAS RESPONSE
Raise your concerns in writing, making recommendations on what is
needed for adequate coverage with a limited team, any gaps to be filled
and limits in your role for director-level duties. The priority is to safeguard
the management of the organisation and there may be threats under the
current structure. Review section 130 on professional competence and due
care.

ETHICAL DILEMA CONFIDENTIALITY

EXAMPLE 4
I have concerns about some of the proposed restructures to the company
Im working for
THE DILEMMA
I am the FD of a British subsidiary of a US company thats being
restructured. I have concerns about some of the proposed changes, which I
have raised, but the other directors are not responding. Id like to broach
the subject with our auditor. Would I be breaking confidentiality rules?
CIMAS RESPONSE
Document all communications on the issue, including those to which you
have not had a reply. Review the principle of confidentiality in relation to
an accountant in business (section 140.1 of the CIMA handbook). It is
important to refrain from disclosing information outside the employing
organisation unless required to do so by law or professional duty (140.7).
Also, you should not face pressure to mislead others, including auditors
(310.2).

ETHICAL DILEMA
PROFESSIONAL BEHAVIOUR
EXAMPLE 5
Im asked to issue an unrealistically high revenue forecast.
THE DILEMMA
Im a new finance manager of new firm thats done well enough to receive
an acquisition approach from a big corporation, although our income this
quarter has been disappointing. The CFO wants me to issue an
unrealistically high revenue forecast. He hopes that the takeover can
happen before the inconsistency between it and our actual results becomes
clear. Im unwilling to do so and I feel that whistle-blowing is my only
option.
CIMAS RESPONSE
Its your duty as a CIMA member not only to issue accurate reports but
also to provide forecasts that reflect past performance (see section 300.10
of the code of ethics). First, meet your line manager to raise your concerns.
Then put these in writing and seek a formal response. Blowing the whistle
is appropriate when its in the public interest. This may be your only
choice ultimately, but you should try all other options first.