IMA® (Institute of Management Accountants) requires its members to behave ethically. Ethics is instrumental to the profession because accountants’ primary responsibility is to the public interest, in addition to the profession and their company. IMA established its Committee on Ethics to ensure that every aspect of the organization is guided by and informed of the ethical concerns relevant to the organization and the profession. The Committee on Ethics created the IMA Statement of Ethical Professional Practice to provide guidance on overcoming ethical dilemmas and professional expectations.
In order to assist its members with ethical dilemmas, IMA offers the Ethics Helpline service to members and other professionals. The helpline offers free, confidential consultation on ethical business issues. Instead of a hotline—which a company might have for reporting suspected violations and report wrongdoing—the IMA helpline is staffed by volunteers who assist callers in working through ethical dilemmas in accordance with the IMA Statement of Ethical Professional Practice.
While IMA has more than 140,000 members in more than 150 countries, it receives fewer than 1% of member calls to its helpline yearly. This is potentially a problem, because other professional organizations have observed that 1% of their members seek such guidance. This either means that the IMA Statement of Ethical Professional Practice is so effective at identifying ethical dilemmas and providing resolution guidance that such calls are unnecessary, or the helpline is being underutilized. The IMA Statement of Ethical Professional Practice provides clear principles-based guidance on ethical expectations and ethical dilemma decision making, and the need for the helpline has been observed by those who have utilized it.
IMA Statement
The IMA Statement of Ethical Professional Practice consists of principles and standards of professionalism that IMA members are bound to adhere to as a condition of organizational membership. The guiding principles of IMA include: honesty, fairness, objectivity, and responsibility. Members are expected to follow these principles and encourage their organizations to follow them as well. This latter expectation is where a significant percentage of helpline calls originate.
The IMA Statement of Ethical Professional Practice consists of four standards, with each having three to four points of clarification associated with them. The first standard is competence, which is defined by the following:
- Maintain an appropriate level of professional leadership and expertise by enhancing knowledge and skills.
- Perform professional duties in accordance with relevant laws, regulations, and technical standards.
- Provide decision support information and recommendations that are accurate, clear, concise, and timely. Recognize and help manage risk.
The second standard is that of confidentiality:
- Keep information confidential except when disclosure is authorized or legally required.
- Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.
- Refrain from using confidential information for unethical or an illegal advantage.
It should be noted that legal compliance is the lowest measure of ethicality. Ethics is a higher bar and requires adherence to professional codes of conduct and standards.
The third standard pertains to integrity:
- Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts of interest.
- Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
- Abstain from engaging in or supporting any activity that might discredit the profession.
- Contribute to a positive ethical culture and place integrity of the profession above personal interests.
The fourth and final standard is credibility:
- Communicate information fairly and objectively.
- Provide all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or recommendations.
- Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.
- Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
The majority of those who contact the IMA helpline note that they have considered the implications of the IMA Statement of Ethical Professional Practice and that it informed or motivated their call for assistance in solving an ethical dilemma.
The next section offers an example of a call to the IMA helpline to demonstrate how IMA can help its members navigate ethical dilemmas. This situation is similar to dilemmas faced by IMA members over the years. This example is included to demonstrate both an example of overcoming an ethical dilemma, as well as showing how the helpline can benefit IMA members who are experiencing the challenges of a dilemma. Members experiencing such challenges often seek out the helpline to get extra eyes on the situation. This process can help strengthen ethical dilemma decision making and provide objective insight.
Alonzo’s Dilemma
Alonzo calls the helpline, and the helpline intake person asks a variety of intake questions, which include contact information, best time to call, and a dilemma overview. The intake dilemma overview is as follows:
“For the past four months, I have noticed that not all of our employees are being paid through our payroll vendor. It’s not exactly clear why some employees are listed as ‘other.’ I am concerned that proper taxes are not being paid on the employees that are not going through regular payroll.”
Alonzo then receives a call back from a helpline volunteer:
Helpline: Hello, is this Alonzo? This is the IMA helpline returning your call.
Alonzo: Yes, this is Alonzo. Thank you for calling me back.
Helpline: Is now a good time?
Alonzo: Now is good.
Helpline: The helpline intake assistant gave us some basic information about your situation, but we have found that having the caller explain the situation that led to the call helps us to better guide you through the ethical decision-making process. Does that make sense?
Alonzo: That makes perfect sense. I am the senior accountant for a construction company, and I noticed some irregularities related to payroll in November. Some of our employees are being paid outside of our contracted payroll provider. I’m concerned about taxes and immigration issues. The company is managed by four partners, and they are seldom in the office.
Helpline: Have you brought the issue up with the partner(s)?
Alonzo: As I mentioned, they are seldom in the office. Also, I really don’t have any solid way of getting hold of them, as I have only worked here since October, and the management structure seems a bit chaotic. I have thus far only really interacted with one of the partners, back when I was hired.
Helpline: Are you a CMA® (Certified Management Accountant)? Are you familiar with the IMA Statement of Ethical Professional Practice?
Alonzo: Yes, I am a CMA, and I am familiar with the IMA Statement.
Helpline: Before we go through the IMA Statement and work on your ethical dilemma, I want to explain the purpose of the helpline. The helpline is intended to assist you in working through your concern by applying the IMA Statement to your situation. Ultimately, it’s your life and you will have to make the final decision, because you ultimately have to live with the results. Looking at the IMA Statement, which section or sections seem to apply most to your situation?
Alonzo: Competence (2)(3) and integrity (3)(4).
Helpline: It appears that you have thought about your situation a lot and have identified the key issues. The IMA Statement provides guidance on resolving dilemmas. Here are your potential choices: Use the company internal reporting function like a hotline; discuss it with your direct supervisor (partner); seek legal counsel; or leave the company. Each of these has costs and benefits and require personal consideration in making your decision.
Alonzo: The company doesn’t have a hotline for reporting concerns. I have tried to discuss it with the partners, to no avail. I have not considered getting my own lawyer, but it does seem reasonable to consider that option. I am concerned about U.S. Immigration and Customs Enforcement raiding the company because of potential undocumented workers being paid off the books. As we have gone through these options, the best option for me seems to leave the company. I hate to give up a good-paying job, but I can’t stay where unethical things are happening.
Helpline: It sounds like you have found your path forward. Do you feel that the helpline has assisted you in resolving your ethical issue today?
Alonzo: Yes.
Helpline: Thank you for calling the helpline. I’m glad that we could assist you and resolve your situation. Feel free to call back if have any other ethical questions related to this or any other ethical matter in the future.
As you can see, the IMA helpline can provide guidance in how to apply the IMA Statement of Ethical Professional Practice to real-world ethical dilemmas. If you find yourself in an ethical entanglement, feel free to reach out to the IMA helpline at (833) 380-8900 (U.S. and Canada), or follow this link. You can also visit IMA’s Ethics Center.
