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CMA USA PART 2 SECTION F PROFESSIONAL ETHICS SUMMARY
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Summary - CMA USA PART 2 SECTION F PROFESSIONAL ETHICS .CONTENT WISE TABLE MANNER FLASHCARD STYLE.EASY TO GRASP IDEAS WITH SIGNIFICANT IDEAL EXAMPLE
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SECTION F – Professional Ethics (Weightage 10%)S.No Questions Answers
1. What are ethics and what Ethics concerns the morality of activities and practices that are
are business ethics? considered right or wrong, including the rules and values that give
rise to those activities and practices. Thus, business ethics is a
systematic study of morality as it is applied to the business world.
2. What are the four Principles 1) Honesty
in the Code of Ethics? 2) Fairness
3) Objectivity
4) Responsibility
3. What are the IMA’s four Honesty means fairness and straightforwardness of conduct. It is
overarching ethical principles, the quality of being upright, having integrity, truthfulness, sincerity,
and how are the frankness, and freedom from deceit or fraud.
principles defined?
Fairness means acting in an impartial manner and being free from
bias, dishonesty or injustice. It requires a person to be open-
minded, tolerant and accepting.
Objectivity means basing a judgment on an established set of
criteria. It is the state of being unbiased, free from personal feelings
or prejudice and basing analyses and decisions on the facts alone.
Responsibility means doing what you say you will do when you say
you will do it. It is the state of being answerable or accountable for
something that is within one’s own power, control or management.
In an essay answer to an ethics question on the exam, if you
mention any of the Principles, you will need to be able to also
define them.
4. Why is a code of Senior management is forced to define and document its
ethics important to an expectations to the rest of this organization.
organization? The code of ethics provides a common standard and
understanding of the company’s definition of ethical
behavior by creating a reference point for the company
employees.
The reference point created by the code of ethics provides
a framework for decision making in situations where an
explicit company policy does not exist.
Creating a code of ethics fulfills the requirement for
compliance with legislation in the United States. One
section of the Sarbanes Oxley legislation—SOX 406—makes
reference to a corporate code of conduct.
5. Why is ethics training Training is important to create awareness of the standards against
important? which individual behavior will be measured. Management
From the Desk of Muhammad Zain – Founder of Zain Academy Page 62 of 66
, accountants should help to develop training programs that will
promote the creation and maintenance of an ethical culture.
Everyone, even senior management, should receive the training,
because such training will help to deliver a standardized message
across the organization. Examples of the topics to include in this
training include:
Standards for interpersonal behavior within the company.
Prohibited business practices.
Dissemination and understanding of the company core
values.
How to apply theoretical core values in real life situations.
Providing leadership regarding ethical behavior.
6. What is the definition of Honesty means fairness and straightforwardness of conduct. It is
Honesty? the quality of being upright, having integrity, truthfulness, sincerity,
frankness, and freedom from deceit or fraud.
7. What is the definition of Fairness means acting in an impartial manner and being free from
Fairness? bias, dishonesty, or injustice. It requires a person to be open-
minded, tolerant and accepting.
8. What is the definition of Objectivity means basing a judgment on an established set of
Objectivity? criteria. It is the state of being unbiased, free from personal feelings
or prejudice and basing analyses and decisions on the facts alone.
9. What responsibility do 1. Maintain an appropriate level of professional expertise by
members of the IMA have with continually developing knowledge and skills.
respect to competence? 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
judgment or successful performance of an activity.
10. What is the definition of Responsibility means performing an act or a function completely
Responsibility? and in a timely manner. It is the state of being answerable or
accountable for something that is within one’s own power, control,
or management.
11. What are the four Standards 1) Competence
in the Code of Ethics? 2) Confidentiality
3) Integrity
4) Credibility
12. What is the text of the 1) Keep information confidential except when disclosure is
Confidentiality section authorized or legally required.
in the Code of Ethics? 2) Inform all relevant parties regarding appropriate use of
confidential information. Monitor to ensure compliance.
3) Refrain from using confidential information for unethical or
illegal advantage.
13. What is the text of the 1) Mitigate actual conflicts of interest. Regularly communicate
Integrity section with business associates to avoid apparent conflicts of
in the Code of Ethics?
From the Desk of Muhammad Zain – Founder of Zain Academy Page 63 of 66
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