Ethical Standards for Management Accountants
Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the …show more content…
On October 31, 2011, a Reno man who worked as the chief financial officer for Securitron Magnalock Corporation, an electronic door lock manufacturer in Sparks, Nevada, plead guilty to embezzling approximately $2.5 million from the company (FBI, 2011). This was accomplished by making false entries in the company accounting system to generate checks payable to a personal retirement account and by forging checks.
Amy Cameron, from Washington, Oklahoma, was sentenced on July 14, 2011, to 30 months in prison for embezzlement from her employer and money laundering (The Norman Transcript, 2011). She worked for Quality Plumbing and Heating as a bookkeeper from 2006-2010. Cameron issued checks payable to herself on the company’s bank accounts and deposited those checks into her own bank account and an investment account. Records indicate that she embezzled a total of $455,904.
Due to these cases and other noteworthy financial fraud actions of recent years, the Accounting Standards Board adopted a new auditing standard for fraud titled SAS 99. This new auditing regulation is noted for both public and private companies. It describes fraud as “an intentional act that results in a material misstatement in financial statements that are subject to audit”. Among other guidelines, it calls for auditors to, “develop a mindset that fraud can occur”. Auditors are required to discuss the risk of fraud and