Question

Please discuss the importance of ethics in Management Accounting.

Answer 1

Ethics simply refers to moral values. Ethics in business means the ethical values to be followed by a business concern. In business , ethics or moral values should be followed by everyone. Ethics deals with identifying what is good or what is bad.

Management accounting is a branch of accounting deals with accounting information which are useful for the management for discharging their functions.

Ethics in management accounting simply refers to the moral values to be followed in managerial decision making. There some some standards of ethics, that should be followed by the management while taking any decision.

IMPORTANCE OF ETHICS IN MANAGEMENT ACCOUNTING

Here in any business organisation they have to follow some moral values while discharging their function, there are several ethical rules or standards are fixed by IMA. The decisions taken by the management should follow some ethics. ie they should discharge their responsibility as a professional manner and decisions should not be harmful to anyone.

If the organisation can satisfy their employees by joining them to the decision making process, consider them as a part of the organisation etc, then automatically they will motivated to do their work as much they can. These all are comes under discharging some social responsibility or following ethics in business

Ethics helps to earn profits in the long run, ie discharging social responsibilities and making huge profit is not possible. At a time only one can earn. But in the long run it will highly benefited. So the management should consider all these factors while taking decisions.

When a firm follows ethics , then they will get high reputation and can attract the customers. The customers will like to buy their products.