Question

Melody is an accountant at Centric, a large international firm where she works on potential acquisitions. When Centric is preparing to acquire a company, Melody is involved in filing the necessary paperwork with the Securities and Exchange Commission (SEC).

Melody has been dating Robert for two years; they are now discussing marriage. Robert works as a salesperson for an exercise equipment distributor.

Over the past two years, Melody has talked with Robert about what she’s doing at work. She does not go into great detail, but does occasionally mention company names. Melody has given her phone passcode to Robert so he can answer calls for her or look things up for her when she’s the one driving. Robert has read some of her emails by using the phone passcode. He has also eavesdropped on a few phone conversations she has had when a colleague calls her from work with a question.

Unbeknownst to Melody, Robert has been sharing the information he has gotten from her with his stockbroker friend, Matt. Robert will call Matt to give him a “heads up” that Melody’s company is going to be acquiring another company soon. Matt will then place an order to buy the stock of the company and will later split the profits with Robert.

Melody has not shared any information intentionally, nor has she directly profited from it.

Required:

Using the IMA Statement of Ethical Professional Practice on page 10 as an ethical framework, answer the following questions:

-What is (are) the ethical issue(s) in this situation?

-What are Melody’s responsibilities as a management accountant?

-Has Melody violated any part of the IMA Statement of Ethical Professional Practice? Support your answer.

-Suppose Melody has discovered what Robert and Matt are doing. What do you think she should do?

Answer 1

Ethical issues in this situation

Confidentiality is main issue in this situation. Because secert information of melody's firm is shared by robbert to his stoke broker friend to get benefits.

Responsibility of melody as management accountant

As a member melody has responsibility to comply and uphold standards of competence, confidentiality, integrity and credibility. Failure to comply may result in disciplinary action.

Yes Melody has violated her confidentiality responsbility.

Melody should not ignore it. She should seek actively resolution of this issue and must share with her senior about this issue.