Professional Body & Professionalism - 2

03 March 2009 |

This is part 2 of the topic Professional Body and Professionalism by CMA B V Prabhakar. He discusses on how accounting bodies IMA-USA, ICWAI-INDIA & ICSI-INDIA apply the above principles.

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Efforts of different professional bodies to promote professionalism.

Let us now see the case of three Professional Bodies, IMA-USA, ICWAI-INDIA & ICSI-INDIA, and compile how these Professional Accounting Bodies ensure, build and promote Professionalism among its members.

I. INSTITUTE OF MANAGEMENT ACCOUNTANTS , USA (www.imanet.org)

The Institute of Management Accountants (IMA®) is the world's leading organization dedicated to empowering management accounting and finance professionals to drive business performance.

With a network of about 60,000 professionals, IMA provides a dynamic forum for management accounting and financial professionals to develop and advance their careers through its Certified Management Accountant (CMA®) program, cutting-edge professional research and practice development, education, networking, and the advocacy of the highest ethical and professional practices.

Vision Statement

The world's leading association for management accounting and finance professionals.

Mission Statement

To provide a dynamic forum for management accounting and finance professionals to develop and advance their careers through certification, research and practice development, education, networking, and the advocacy of the highest ethical and professional practices.

A. Statement of Ethical Professional Practice as issued by IMA:

Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values, and standards that guide our conduct.

PRINCIPLES

IMA's overarching ethical 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

A member's failure to comply with the following standards may result in disciplinary action.

I. COMPETENCE

Each member has a responsibility to:
  1. Maintain an appropriate level of professional expertise by continually developing 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 accurate, clear, concise, and timely.
  4. Recognize and communicate professional limitations or other constraints that would preclude responsible judgement or successful performance of an activity.

II. CONFIDENTIALITY

Each member has a responsibility to:
  1. Keep information confidential except when disclosure is authorized or legally required.
  2. Inform all relevant parties regarding appropriate use of confidential information. Monitor subordinates' activities to ensure compliance.
  3. Refrain from using confidential information for unethical or illegal advantage.

III. INTEGRITY

Each member has a responsibility to:
  1. Mitigate actual conflicts of interest, regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.
  2. Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
  3. Abstain from engaging in or supporting any activity that might discredit the profession.

IV. CREDIBILITY

Each member has a responsibility to:

  1. Communicate information fairly and objectively.
  2. Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.
  3. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

RESOLUTION OF ETHICAL CONFLICT

In applying the Standards of Ethical Professional Practice, members may encounter problems identifying unethical behaviour or resolving an ethical conflict.

When faced with ethical issues, members should follow their organization's established policies on the resolution of such conflict.

If these policies do not resolve the ethical conflict, then members should consider the following courses of action:

  1. Discuss the issue with the immediate supervisor except when it appears that the supervisor is involved. In that case, present the issue to the next level. If a satisfactory resolution is not achieved, submit the issue to the next management level. If the immediate superior is the chief executive officer or equivalent, the acceptable reviewing authority may be a group such as the audit committee, executive committee, board of directors, board of trustees, or owners. Contact with levels above the immediate superior should be initiated only with the superior's knowledge, assuming he or she is not involved.
  2. Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics Counsellor or other impartial advisor to obtain a better understanding of possible courses of action.
  3. Consult own attorney as to legal obligations and rights concerning the ethical conflict.

Mission of the Ethics Program

Encourage organizations and individuals to adopt, promote and execute business practices consistent with high ethical standards, by providing valuable insight into the complexities that result from social and technological change.

The following definition of ethics is provided as a foundation for IMA members.

"Ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right and wrong. It is the application of values to decision making. These values include honesty, fairness, responsibility, respect and compassion." - Rushworth Kidder, President, Institute for Global Ethics

As already explained above, IMA offers an ethics helpline service. Members of IMA as well as other financial professionals may contact this helpline for free, confidential guidance on ethical issues.

The purpose of the helpline is to provide guidance to those in the profession that find themselves in an ethical dilemma.

After a preliminary discussion of the problem to determine the kind of ethics matter being reported, an ethics counsellor will respond to the caller. Confidentiality is maintained at all times. The counsellor will not provide a specific resolution but will explain how the dilemma relates to the provisions of IMA's Statement of Ethical Professional Practice.

B. CONTINUING EDUCATION REQUIREMENTS

CMAs are required to maintain their proficiency in the fields of management accounting and financial management. This includes knowledge of new concepts and techniques as well as their application in the management accounting and financial management professions. The objective is to maintain the professional competence of the individual and to enhance one’s ability to perform job-related requirements. The continuing education requirement is 30 hours per year.

A broad range of subjects may be included in the programs for which hours of credit will be given

- all aspects of accounting, financial management, business applications of mathematics and statistics, computer science, economics, management, production, marketing, business law, and organizational behaviour.

All CMAs are required to complete a minimum 2 hours of continuing education on the subject of ethics as part of their 30-hour annual CPE requirement.

IMA’s Statement of Ethical Professional Practice as depicted above, is an excellent framework for determining the types of ethical topics that are acceptable. The focus of the ethics education should be principally in the area of management accounting and financial management.

Topics should include ethical considerations in the area of decision support, planning and control for accounting and finance professionals working inside organizations. Members are encouraged to address specific scenarios such as fraud in financial reporting, manipulation of budgets for personal gain, disclosure of confidential financial information and coverage of ethics within general business environment.

To be continued.... Part 3

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