Question 1

The IMA's ethical standard of confidentiality does NOT require each member to ________.

Accepted Answer

The IMA's ethical standard of confidentiality focuses on the protection and appropriate use of confidential information, not on the specifics of how decision support information and recommendations are provided, which relates more to competence and performance rather than confidentiality.

Question 2

Which company has NOT engaged in accounting fraud in the past ten years?

Accepted Answer

Smucker Quality Beverages Inc. has not been involved in any accounting fraud in the past ten years, whereas Enron, Tyco, and Adelphia have all been involved in accounting scandals.

Question 3

According to the Statement of Ethical Professional Practice drafted by the IMA,the standard of integrity states that each member has a responsibility to ________.

Accepted Answer

The answer of According to the Statement of Ethical Professional...

Question 4

XBRL is an integrated information system that supports all functional areas of a business.

Accepted Answer

While XBRL is a data standard used for reporting financial and business data, it is not an integrated information system that supports all functional areas of a business.

Question 5

List and explain the four major business trends that are currently causing changes in management accounting.

Accepted Answer

The answer of List and explain the four major business...

Question 6

Here is a statement from the Statement of Ethical Professional Practice drafted by the Institute of Management Accountants: "Each member has a responsibility to perform professional duties in accordance with relevant laws,regulations and technical standards."
This statement comes from the ________ standard.

Accepted Answer

The statement refers to the competence standard, which emphasizes the need for professionals to maintain the necessary skills and knowledge to perform their duties effectively and in accordance with relevant laws, regulations, and technical standards.

Question 7

You are the management accountant in Company ZZ.A supplier to Company ZZ offers to let stay rent-free at the supplier's condominium in Florida for your upcoming vacation.Accepting the supplier's offer violates the IMA's ethical standard of ________.

Accepted Answer

Accepting the supplier's offer to stay rent-free at their condominium in Florida creates a conflict of interest and violates the IMA's ethical standard of integrity, which requires management accountants to avoid actual or apparent conflicts of interest and to disclose all conflicts of interest to relevant parties.

Question 8

The Institute of Management Accountants has adopted a set of standards for ethical conduct which includes ________.

Accepted Answer

The Institute of Management Accountants has adopted a set of standards for ethical conduct which includes competence, confidentiality, credibility and integrity. Morality is not explicitly included in the set of standards.

Question 9

The essence of the just-in-time philosophy is to eliminate waste.

Accepted Answer

The just-in-time philosophy focuses on reducing waste in all forms, including excess inventory, overproduction, and inefficient processes. The goal is to deliver the right product at the right time, in the right amount, with minimal waste and maximum efficiency.

Question 10

According to the IMA's Statement of Ethical Professional Practice,the standard of credibility requires ________.

Accepted Answer

The standard of credibility requires communicating information fairly and objectively, which means presenting information in a manner that is impartial, unbiased, and without distortion or misrepresentation. This is necessary in order to maintain the integrity of the financial information presented and to allow stakeholders to make informed decisions based on that information. While mitigating conflicts of interest, maintaining professional expertise, and complying with laws and regulations are also important ethical standards, they are not specifically related to the requirement for credibility.

Question 11

Companies that have a fully installed computer-integrated manufacturing system are usually labor intensive.

Accepted Answer

Companies with a fully installed computer-integrated manufacturing system are usually not labor-intensive as automated machines and computer systems carry out most of the tasks.

Question 12

Scott is a management accountant in a large company.Scott observed unethical behavior by a coworker who is also a management accountant.The coworker is a relative of the company's president and he always receives preferential treatment.Scott observed the coworker putting office supplies and small pieces of electronic equipment in his briefcase.According to the IMA,what course of action should Scott take?

Accepted Answer

The IMA's Statement of Ethical Professional Practice requires management accountants to report ethical violations to their immediate supervisor, unless the supervisor is involved in the violation or the violation involves accounting or auditing issues. In this case, the coworker's theft of office supplies and equipment constitutes an ethical violation that should be reported. Reporting the observation to the police or the Securities and Exchange Commission is not necessary at this point, and failing to take any action would be a violation of the IMA's ethical standards.

Question 13

The service sector accounts for approximately 40 percent of the employment in the United States at the present time.

Accepted Answer

The service sector accounts for a much larger portion of employment in the United States, typically over 70 percent.

Question 14

You are the management accountant in Company XYZ.Your close friend,Ted,is a shareholder in Company XYZ.Ted asks you for information about Company XYZ that is typically available only to executive officers in Company XYZ.Sharing this information with Ted violates the IMA's ethical standard of ________.

Accepted Answer

Confidentiality is the ethical standard that requires management accountants to maintain the confidentiality of information obtained as a result of their professional activities. Sharing information with outsiders, even friends, can harm the company's competitiveness and reputation and damage the management accountant's professional credibility. Therefore, sharing information with Ted would violate the ethical standard of confidentiality.

Question 15

What do Certified Management Accountants and Certified Public Accountants have in common?

Accepted Answer

Both Certified Management Accountants (CMAs) and Certified Public Accountants (CPAs) follow codes of conduct as part of their professional standards and ethical guidelines.

Question 16

You are a management accountant in a large company.You have observed unethical behavior by your immediate supervisor.In accordance with the guidelines offered by the IMA,which of the following courses of action should NOT be taken?

Accepted Answer

Discussing the issue with the immediate supervisor may not be advisable if the supervisor is the source of the unethical behavior. The IMA guidelines suggest escalating the issue beyond the person involved in the unethical behavior, which could include following established policies, consulting an attorney, or speaking with an ethics counselor.

Question 17

This is a statement from the IMA's Statement of Ethical Professional Practice: "Each member has a responsibility to communicate information fairly and objectively."
This is an example of the ________ standard.

Accepted Answer

The statement refers to the responsibility of communicating information fairly and objectively, which aligns with the credibility standard.

Question 18

According to the IMA's Statement of Ethical Professional Practice,the standard of credibility includes ________.

Accepted Answer

The standard of credibility in the IMA's Statement of Ethical Professional Practice involves disclosing all relevant information that could reasonably be expected to influence an intended user's understanding of the reports.

Question 19

According to the Financial Executive,which of the following situations create pressures for unethical behavior?

Accepted Answer

Ignoring small lapses in ethical behavior can create a slippery slope leading to larger lapses in the future and may create pressure for unethical behavior. Emphasis on long-term results and rising stock prices may create pressure for short-term unethical behavior, but may not necessarily lead to unethical behavior in the long run. Upward trends in the economy may create pressure to remain competitive, but may not necessarily lead to unethical behavior.

Question 20

The IMA's ethical standard for integrity includes all of the following EXCEPT ________.

Accepted Answer

The IMA's ethical standard for integrity includes responsibilities for members to mitigate conflicts of interest, refrain from prejudicial conduct, and abstain from discrediting the profession. However, it does not include a responsibility for members to monitor subordinates' activities.

Quiz 1: Managerial Accounting, the Business Organization