Question

Response Questions Part A To C A) Write 5-6 Sentences For Your Response: Using the IMA Statement of Ethical Professional Practice below as an ethical framework, answer the following questions: o What are the ethical issue(s) in this situation? o What are Jackson's responsibilities as a management accountant? Write 6 Sentences For Your Response: How would recording more units than are actually in inventory impact the 2017 balance sheet and income statement? How would it impact the 2018 balance sheet and income statement? Write 5 Sentences For Your Response: Discuss the specific steps Jackson should take in this situation. Refer to the IMA Statement of Ethical Professional Practice below in your response IMA Statement of Ethical Professional Practice Effective July 1, 2017 Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values and standards that guide member conduct. Principles IMA's overarching othical principles include: Honesty, Fairness, Objectivity, and Responsibility Members shall act in accordance with these principles and shall encourage others within their organizations to adhere to them. Standards IMA members have a responsibility to comply with and uphold the standards of Competence, Confidentiality, Integrity, and Credibility. Failure to comply may result in disciplinary action. I. COMPETENCE 1. Maintain an appropriate lovel of professional leadership and expertise by enhancing knowledge and skills. 2. Perform professional duties in accordance with relevant laws, regulations, and technical standards. 3. Provide decision support information and recommendations that are accurato, clear, concise, and timely. Recognize and help manage risk. II. CONFIDENTIALITY 1. Keep information confidential except when disclosure is authorized or legally required. 2. Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance. 3. Rofrain from using confidential information for unethical or illegal advantago III. INTEGRITY 1. Mitigato actual conflicts of interest. Rogularly communicate with businoss associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts of interest. 2. Refrain from engaging in any conduct that would prejudice carrying out duties othically. 3. Abstain from engaging in or supporting any activity that might discredit the profession. 4. Contribute to a positive ethical culture and place integrity of the profession abovo personal interosts. IV. CREDIBILITY 1. Communicate information fairly and objectively. 2. Provide all relovant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations. 3. Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law. 4. Communicato profossional limitations or other constraints that would procludo responsible judgment or successful performance of an activity.

Answer 1

1. The ethical issues in this situation is Compliance and Credibility. Jackson being a Management accountant has to be complaint with rules, regulations and technical standards of his profession. He should be clear and complaint in performing is duties making use of his expertise and professional knowledge.

In this situation it is the responsibility of Jackson to provide the right count of inventory that are physically present on the floor. He cannot alter the count of inventory as per the situation, if he does then his service to the Sheldon Products Company would be treated as unethical as he is providing incorrect information to concerned parties by over stating the inventory.

2. Recording more units than actually present on the floor would increase the inventory which is one of the current asset in the company. This incorrectly increased value will create fictitious purchases in income statement, where nothing is been received in the physical form. In 2017 the inventory will be overstated then actual which will make the balance sheet look favourable resulting in profits.

In 2018 this inventory again shown in books as that is when it is actually received and recorded. It is always on receipt of the goods that the transaction is recorded not on the payment. Hence this will create duplicate transaction once in 2017 unethically and another on 2018 when actual transaction is taken place. It will impact 2018 income and balance sheet because you are again recording the transaction and the profits carried forward from last year (profit arising from altering inventory) will create unnecessary liability which is not actually existing.

3. Jackson should behave complaint to his duties without overstating the inventory rather communicate the impact of doing so and avoid conflict of Interest. He should communicate the information fairly and objectively so that business does not take any unethical steps to save the key employees, rather talk to them and explain the situation in best possible manner in complaint with the company policies. He should explain to business the professional limitations for not favouring the business decision to overstate inventory count in this case.

He should always contribute the positive ethical culture and place the integrity of the professional ethics above personal interests. And also performing his duties in accordance with relevant laws, regulations and technical standards even though he knows that those inventory will be received in FEB 2018 and altering the count will help the company to retain the employees by providing bonus in 2017.