Question

The AICPA Code of Professional Conduct (the Code) is generally recognized as a model for the accounting profession. Other professional accounting organizations have their own Standards. Some use parts of the AICPA Code; but others are very different from the AICPA Code.

1. How does the Institute of Management Accountants Statement of Ethical Professional Practice address the standard for Independence? How is this different from the AICPA Code? Why is it different? What does the IMA Practice cover? How are these standards enforced?

Answer 1

1. The institute of Management accountants statement of Ethical professional practice has four standards

1 Competence

2 Confidentiality

3 Integrity

4 Credibility

The IMA addresses the standard of Independence under the integrity standard which provides the members to tackle their conflict of interest and refrains from engaging them in any conduct that would affect the ethical performance of duties. It also encourages to place ethics and integrity of the profession above the personal interest.

However in the AICPA independence standard is to preclude relationships that may hinder the objectivity of the member in the professional services being offered. This has a wider interpretation than the standard of IMA . This precludes the professional from being engaged with the client in any other manner other than the services provided as a member of AICPA . Whereas in the IMA code of conduct it emphasises on disclosing any kind of relation the member has with the client and does not refrain to have any relationship altogether.

The difference is due to the AICPA members work for public accounting firms and IMA members work for private accounting firms

IMA practice covers the private accounting firms and work for global corporations and large financial departments.

These standards are enforced in following manner:

Us the code of conduct provided by the institute

By following the policies established by the organization.

By discussing the matter with your senior

By providing the issue to higher management

If not resolved discuss issue with IMA ethics counsellor

Finally if the problem is not yet resolved consultation of attorney can be taken.

If conflict arises