Certified Management Accountant Professional Ethics 4 — Questions and Answers
Question 1: Which of the following is an example of a violation of the Integrity standard under IMA ethics?
- Failing to complete required CPE hours on time
- Accepting an expensive gift from a vendor seeking a new contract (Correct answer)
- Inadvertently disclosing confidential data due to a system error
- Preparing a financial report using an unfamiliar accounting method
Correct answer: Accepting an expensive gift from a vendor seeking a new contract
Accepting gifts that could influence professional decisions violates the Integrity standard by creating an actual or apparent conflict of interest.
Question 2: A CMA is asked to sign off on financial statements he believes contain material misstatements. Refusing to do so is BEST supported by which principle?
- Competence — he lacks the skills to assess materiality
- Credibility — he must communicate objectively and refuse to certify misleading information (Correct answer)
- Confidentiality — the misstatement is proprietary information
- Commitment — loyalty to the employer comes first
Correct answer: Credibility — he must communicate objectively and refuse to certify misleading information
Credibility requires CMAs to report information fairly and objectively; signing off on materially misstated statements violates this obligation.
Question 3: Under the Sarbanes-Oxley Act, which of the following responsibilities does a CMA in a public company have that reinforces IMA ethical standards?
- Preparing only tax returns and not financial statements
- Certifying internal controls and financial statement accuracy alongside senior management (Correct answer)
- Immunity from prosecution for following supervisor directives
- Reporting directly to the PCAOB rather than internal management
Correct answer: Certifying internal controls and financial statement accuracy alongside senior management
SOX requirements for accurate financial reporting and internal control certification align with IMA standards of integrity and credibility.
Question 4: A CMA learns during the course of his work that a colleague is embezzling funds. The colleague is also a close friend. Which action BEST reflects IMA ethical standards?
- Confront the colleague privately and give them a chance to correct it
- Report the embezzlement through appropriate internal channels (Correct answer)
- Do nothing because it is not directly part of his job duties
- Accept partial funds to stay quiet
Correct answer: Report the embezzlement through appropriate internal channels
IMA ethical standards require reporting fraud or illegal acts through appropriate internal channels, regardless of personal relationships.
Question 5: A former employer asks a CMA for detailed cost information about a product she worked on. She is now employed elsewhere. She should:
- Provide the data because she no longer works there
- Refuse, as confidentiality obligations survive employment (Correct answer)
- Share only publicly available portions and estimate the rest
- Contact the IMA Ethics Hotline to get permission
Correct answer: Refuse, as confidentiality obligations survive employment
Confidentiality under IMA standards extends past the end of employment; CMAs must not disclose former employers' proprietary information.
Question 6: Which of the following MOST accurately reflects the IMA's position on legal vs. ethical obligations?
- Ethical standards only apply when legal standards are silent
- An action can be legal but still violate IMA ethical standards (Correct answer)
- Legal compliance automatically satisfies ethical obligations
- Ethics standards are aspirational and not binding on CMAs
Correct answer: An action can be legal but still violate IMA ethical standards
IMA standards hold that members must go beyond legal compliance; something may be legal yet still violate the principles of integrity, credibility, or confidentiality.
Question 7: A CMA is pressured to use aggressive revenue recognition techniques that are technically GAAP-compliant but result in misleading financial statements. Agreeing to this MOST directly violates:
- Competence, because she should know better accounting methods
- Confidentiality, because the technique is not widely known
- Credibility, because the statements will mislead users (Correct answer)
- Commitment to continuous learning
Correct answer: Credibility, because the statements will mislead users
Even technically compliant accounting can violate the Credibility standard if the resulting financial statements are misleading to users.
Certified Management Accountant Professional Ethics 4
Which of the following is an example of a violation of the Integrity standard under IMA ethics?