Professional Ethics for Accountants

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Professional Ethics for Accountants

Thursday, May 07, 2020

4.4 (5)

Presenter :Thomas Coghlan, MBA

Company :CPE University, LLC

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Course Details

Overview of Topics

Ethical Standards for Certified Management Accountants (CMA’s)2 mins
IMA Statement on Ethical Professional Practice3 mins
Conflicts of Interest: Ethical Behavior versus Legal Behavior13 mins
Typical Ethical Dilemmas Accountants Face21 mins
Fraudulent Financial Reporting25 mins
Cookie Jar Reserves29 mins
From C-Suite to Prison42 mins
Resolution of Ethical Conflict53 mins
Fraud and Collusion61 mins
Ethical Versus Legal Behavior85 mins
The Foreign Corrupt Practices Act, The Sarbanes-Oxley Act, and Ethics94 mins
Ethical Considerations for Organizations126 mins

Course Description

This course provides an overview of ethical challenges and dilemmas that accountants in industry frequently face and provides strategies for dealing with those dilemmas. The course draws on several real-world frauds to illustrate the “slippery slope” that often leads to fraudulent behavior. The course also covers the three elements of the “The Fraud Triangle”, providing insight into the conditions that can result in fraud.

Topics include:

Ethical considerations for accounting professionals.
Ethical dilemmas.
Examples of fraud.
Strategies for dealing with ethical dilemmas.
The Fraud Triangle.
Differences between legal and ethical behavior.
Ethical aspects of the Foreign Corrupt Practices Act (FCPA) and the Sarbanes-Oxley Act (SOX).
Ethical considerations for accounting organizations.
This course covers the Professional Ethics material outlined in the content specification outline for the Certified Management Accountant (CMA) Part 2 examination.

Learning objectives

To identify the four standards of the Institute of Management Accountants (IMA) “Statement of Ethical Professional Practice”, competence, confidentiality, integrity, and credibility.
Recognize how ethical issues such as manipulation of results, analysis, and budgets can develop.
Identify the appropriate course of action for management accountants to take when confronted with an ethical dilemma.
Identify the three components of the Fraud Triangle model.
Identify the purpose of the Foreign Corrupt Practices Act (FCPA) and the practices it prohibits

About Presenter

Thomas Coghlan, MBA

Founder & CEO,CPE University, LLC

tcoghlan@thecpeuniversity.com

He has worked at the intersection of entrepreneurship, business leadership, technology, and education for over 25 years, resulting in a wide range of skills and experiences...

Entrepreneur:

Founder and CEO of two successful businesses: Appitur® Co. (EdTech) and CPE University (training for accountants).
Advisor and investor for startups in food services, online retail, and technology.

Business Leadership:

Progressively responsible roles for multi-national firms in the manufacturing and software industries (Controller -> CFO and IT Director -> VP of Client Services).

Technology:

Business Fellow for the Analytics Center of Excellence at Villanova University School of Business.
Sold and delivered over $4 million of successful consulting projects.

Education:

Developed and delivered over 1,300 hours of live Continuing Professional Education (CPE) for financial professionals.
Created and taught undergrad and MBA courses in accounting and analytics for a top US university.

CPE University, LLC

www.thecpeuniversity.com

Building a career is challenging, with many factors seeming to be out of your control. Making an investment in yourself through professional certifications and continuing education separates you from everyone else. CPE University's programs are designed to help you develop new skills, differentiate yourself, and “Achieve Your Strategic Advantage”.

For over 15 years we have leveraged deep subject matter expertise and cutting-edge online course delivery to provide in-depth programs for a reasonable investment. Let CPE University help you “Achieve Your Strategic Advantage”.

Review Questions

Question 1 : 00:15
Question 2 : 00:30
Question 3 : 00:45
Question 4 : 01:05
Question 5 : 01:25
Question 6 : 01:45
Question 7 : 02:00
Question 8 : 02:15
Question 9 : 02:28

Review Questions
Final Quiz

In accordance with the IMA’s “Statement of Ethical Professional Practice”, a member who fails to keep current with changes in relevant accounting standards is acting contrary to which of the following standards?
- Competence
  The correct answer is competence. Under the standard of competence CMAs have an obligation to learn new skills and maintain existing skills throughout their professional career.
- Confidentiality
  The standard of confidentiality requires CMA’s to keep information confidential except when disclosure is authorized or legally required and inform all relevant parties regarding appropriate use of confidential information.
- Integrity
  The standard of integrity requires CMA’s to mitigate actual conflicts of interest, regularly communicate with business associates to avoid apparent conflicts of interest, advise all parties of any potential conflicts, and to refrain from engaging in any conduct that would prejudice carrying out duties ethically.
- Credibility
  The standard of credibility requires CMA’s to communicate information fairly and objectively and disclose all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or recommendations.
If an IMA member discovers unethical conduct in their organization and fails to act, which of the following ethical standards will they be in violation of?
- Refrain from engaging in any conduct that would prejudice carrying out their duties correctly.
  If an IMA member discovers an ethical violation, they need to refrain from engaging in any conduct that would prejudice carrying out their duties correctly. In addition, they also need to communicate information fairly and objectively, and disclose all relevant information that could reasonably be expected to influence it intended users.
- Communicate information fairly and objectively.
  If an IMA member discovers an ethical violation they need to communicate information fairly and objectively, which likely means that they need to disclose all relevant information that could reasonably be expected to influence it intended users, assure that all information is communicated fairly and objectively, and take precautions to avoid any conduct that would prejudice their ability to carry out their duties correctly
- Disclose all relevant information that could reasonably be expected to influence intended users understanding
  If an IMA member discovers an ethical violation, they need to disclose all relevant information that could reasonably be expected to influence intended users understanding, take precautions to avoid any conduct that would prejudice their ability to carry out their duties correctly, and assure that all information is communicated fairly and objectively.
- All of the answers are correct
  All of the choices are violations of the IMA code of professional ethical conduct in the event a member discovers unethical conduct in their organization and fails to act. CMA’s display their competence and credibility and maintain their integrity by taking appropriate action to resolve ethical problems. All of the activities listed as answer choices should be part of a CMA’s normal job process.
High risk of employee fraud is most likely when there is rationalization, pressure and
- Internal controls
  Internal controls are the processes for assuring achievement of an organizations objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. Effective internal controls would help to mitigate, but not eliminate, the risk of employee fraud.
- Integrity
  Integrity is one of the four standards outlined in the IMAs Statement of Ethical Practice The standard states that members need to mitigate actual conflicts of interest, regularly communicate with business associates to avoid apparent conflicts of interest and advise all parties of any potential conflicts. An organization with a high level of employee integrity would be less likely to experience employee fraud.
- Opportunity
  The correct answer is opportunity. The fraud triangle consists of rationalization, pressure and opportunity. The potential for employee fraud is highest when all three elements of the fraud triangle are present.
- An employee whistle blowing hotline.
  An employee whistle blowing hotline is a confidential process for employees to report suspected ethics violations the firm will investigate. An employee whistle blowing hotline will likely reduce, but not eliminate the risk of fraud.
Which of the following fraud risk factors are mitigated by effective internal controls?
- Rationalization
  Rationalization is one of the three characteristics of the fraud triangle. It is the ability of person or group of people to justify actions consistent with their personal code of ethics. Personal codes of ethics vary by individuals, making rationalization the most difficult fraud characteristic to appraise
- Opportunity
  The correct answer is Opportunity. The opportunity for employees and managers to perpetrate fraud is reduced by effective internal controls.
- Pressure
  Pressure is one of the three characteristics of the fraud triangle. Pressure is the persons or group’s reason or motivation to commit the fraud. It cannot be reduced by effective internal controls.
- Low integrity
  Low levels of integrity in an employee of groups of employees will increase the likelihood of employee fraud.
Which of the following statements about the Foreign Corrupt Practices Act (FCPA) is correct?
- It prohibits payments to corporate officers.
  The FCPA prohibits payments to foreign officials for the purpose of having them act or refrain from acting so that the firm will benefit.
- It requires all public companies to make and keep books, records, and accounts that accurately and fairly reflect transactions and dispositions of assets.
  The FCPA requires all public companies to make and keep books, records, and accounts that accurately and fairly reflect transactions and dispositions of assets
- It was passed in response to scandals at Enron, Xerox, and WorldCom.
  The Sarbanes Oxley Act of 2002 was passed in response to the scandals at Enron, Xerox, and WorldCom in the late 1990’s and early 2000’s. The FCPA was passed in 1977.
- It requires public companies to form independent audit committees.
  The Sarbanes Oxley Act of 2002 requires publicly traded firms to have audit committees composed of independent directors who are not employees or officers of the company.
An effective system of internal controls is most likely to detect fraud perpetrated by
- A group of colluding employees
  A group of colluding employees working together to perpetrate a fraud will be more likely to circumvent the internal controls than a single employee acting alone.
- An individual employee acting alone
  An effective system of controls will be most likely to detect a fraud perpetrated by an individual employee acting alone. Individuals (employees and/or managers) working together (colluding) to perpetrate fraud can make the fraud difficult to detect
- A group of colluding managers
  In general, it is more difficult for non-managers to commit a fraud than managers, since managers can override controls. A group of colluding managers working together will have the best chance of being undetected when committing a fraud.
- An individual manager acting alone
  In general, it is easier for an individual manager to commit an undetected fraud than an individual employee since a manager can circumvent controls.
What are the code of ethics for accountants?
- Integrity
  Integrity is the practice of being honest and showing a consistent and uncompromising adherence to strong moral and ethical principles and values. In ethics, integrity is regarded as the honesty and truthfulness or accuracy of one\\\'s actions.
- Objectivity
  Objectivity is a philosophical concept of being true independently from individual subjectivity caused by perception, emotions, or imagination. A proposition is considered to have objective truth when its truth conditions are met without bias caused by a sentient subject.
- Confidentiality
  Confidentiality involves a set of rules or a promise usually executed through confidentiality agreements that limits access or places restrictions on certain types of information.
- All of the above
  Above mentioned all are the code of ethics for accountants.
Theft or misappropriation of funds placed in one\\\'s trust or belonging to one\\\'s employer known as:
- Fraud
  Fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny a right to a victim.
- Embezzlement
  Embezzlement is the act of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type of financial fraud.\\r\\n\\r\\nSo that Theft or misappropriation of funds placed in one\\\'s trust or belonging to one\\\'s employer known as Embezzlement.
- Collusion
  Collusion is a secret cooperation or deceitful agreement in order to deceive others, although not necessarily illegal, as is a conspiracy.
- Management Override
  The term “management override” refers to the ability of management and/or those charged with governance to manipulate accounting records and prepare fraudulent financial statements by overriding these controls, even where the controls might otherwise appear to be operating effectively.
When Opportunity is created fraud?
- Enforcement of internal control
  Internal control, as defined by accounting and auditing, is a process for assuring of an organization\\\'s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad concept, internal control involves everything that controls risks to an organization.
- Effective oversight
  The goal of effective oversight is to improve quality and to help people and organizations do the best work they can on behalf of the community.
- Poor internal control
  Poor internal controls discovered in this research include poor supervision and lack of documentation processes, which ultimately provide opportunities to fraudsters to misappropriate company assets. This is worse if the fraud was carefully planned and involved employee cooperation.
- None of the above
  Poor internal control is the reason when opportunity is created for fraud.

Minimum 70% Questions answer should be right.

In accordance with the IMA’s “Statement of Ethical Professional Practice”, a member who fails to perform professional duties in accordance with relevant standards is acting contrary to which of the following?
- Competence
- Confidentiality
- Integrity
- Credibility
In accordance with the IMA’s “Statement of Ethical Professional Practice”, a member has a responsibility to recognize professional limitations. Under which of the following standards of ethical conduct is this responsibility included?
- Confidentiality
- Integrity
- Competence
- Credibility
Increasing earnings through general ledger manipulation is typically considered a form of which of the following.
- Misappropriation of assets.
- Theft of assets.
- Fraudulent financial reporting.
- Embezzlement
According to the IMA’s Statement of Professional Ethical Practice, what is the first action a CMA should consider if they experience unethical behavior in the workplace and their organization does not have established ethical policies.
- Consider discussing the problem with their immediate supervisor.
- Consult the board of directors.
- Discuss the problem with the individual their immediate supervisor reports to.
- Notify the appropriate law enforcement agency.
Which of the following is incorrect regarding the differences between ethical behavior and legal compliance?
- Ethical standards are based on the human principles of right and wrong.
- Legal standards are based on written law.
- An action can be legal but not ethical.
- All illegal actions are unethical.
Senior management of publicly traded companies are often able to rationalize fraudulent financial reporting by:
- Placing the blame on the subordinates who executed details of the fraud.
- Coercing their staff to carry the fraud out.
- Covering the fraud up.
- Believing that the reporting is actually in the best interest of the firms’ shareholders.
Which of the following is false about the Foreign Corrupt Practices Act?
- Public companies must have internal control systems.
- Public companies cannot pay bribes to foreign officials to obtain business.
- Public companies must provide reasonable assurance that transactions are recorded properly.
- Public company boards of directors are responsible for oversight of the company’s internal controls
An ethical code of conduct should include a conflict of interest provision. Which of the following should not be included in a conflict of interest provision?
- Require financial disclosure by managers of interests in any related businesses.
- Prohibit financial ties to parties doing business with firm.
- Require advanced notice of questionable transactions.
- Require that employees refuse all gifts from vendors, contractors, and any entities that are interested in doing business with the firm.
The Sarbanes-Oxley Act requires
- Firms to disclose whether they have adopted a code of ethics for senior financial officers or explain why they have not adopted a code.
- Firms to designate an executive as the Chief Ethics Officer.
- All employees sign a code of ethics on an annual basis.
- Publicly traded companies communicate breakdowns in internal control with their external audit firm.
Many ethics experts recommend a code of conduct and ethical behavior. An advantage of a code of conduct is that it
- Ensures ethical behavior by all employees.
- Provides employees with guidance for handling unfamiliar situations.
- Takes the place of formal ethics training.
- Shields organization from liability in event of employee fraud.
IMA stands for_______.
- Institute of Management Accountants
- Institute of Management Association
- Institute of Medical Association
- Institute of Marketing Association
How many conditions are there for trusted person to become trust violators?
- Five
- Three
- Four
- Seven
Which fraud involve fictitious revenue and earnings?
- Sophisticated fraud
- Common fraud
- Both A and B
- None of the above
Failure to comply with the standards may result in:
- Lower profits
- Negative consequences
- Disciplinary action
- Damages
What are the fundamental principles that accounting professionals choose to abide by to enhance their profession, maintain public trust, and demonstrate honesty and fairness?
- Ethical issues
- Ethical dilemma
- Ethical Standards
- Ethical codes

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Reviews

4.4

(5)

60%

20%

PL

Patty Luther , ACCT./BK

Jun 7th 2020

OK

Vicki Boschert , CPA

May 28th, 2020

I had issues with the video stopping and navigating the website. I thought the training itself was very good and I thought it was very interesting including varying topics and real life examples.

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Cost $30
CPE Credits 3
Subject Area Ethics (Regulatory)
Course Level Basic
Instructional Method QAS Self Study
Prerequisites None
Advanced Preparation None
Recorded Date May 07 ,2020
Published Date May 07 ,2020
Who should attend? Accountant CPA - Small Firm CPA - Mid Size Firm Accounting Firm Young CPA CPA in Business Entrepreneurial CPA Accounting Practice Owners Accounts Director Chief Accounting Officer Entrepreneurial Accountant Accounting Managers
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Key Terms Download

On-Demand Webinars

CARES ACT: NOL CHANGES (UPDATED LATEST)

Friday, July 03, 2020 View Details/Register

UNDERSTANDING & ADOPTING THE NEW REVENUE RECOGNITION STANDARD

Thursday, July 02, 2020 View Details/Register

FRAUD ESSENTIALS: WHO? HOW? WHY? WHAT?

Thursday, July 02, 2020 View Details/Register

PRACTICAL APPROACHES TO PERFORMING EFFICIENT & EFFECTIVE SSARS ENGAGEMENTS (COMPILATION AND REVIEW)

Thursday, July 02, 2020 View Details/Register

ARE YOU INDEPENDENT WHEN YOU NEED TO BE? UNDERSTANDING RECENT CHANGES TO THE AICPA CODE OF PROFESSIONAL CONDUCT

Thursday, July 02, 2020 View Details/Register

TAX UPDATE : FCCA 2020 & SECURE ACT. (COVID-19)

Friday, June 26, 2020 View Details/Register

IRS FORM 1099 REPORTING REQ. INCLUDING UPDATES ON FORM 1099-NEC (LATEST 2020)

Thursday, June 25, 2020 View Details/Register

FEDERAL TAX UPDATE: COMPREHENSIVE INDIVIDUAL TAX (FORM 1040)

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A BASIC ETHICS GUIDEBOOK FOR MISSISSIPPI CPAS

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A BASIC ETHICS GUIDEBOOK FOR MINNESOTA CPAS

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A BASIC ETHICS GUIDEBOOK FOR ARIZONA CPAS

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Monday, June 22, 2020 View Details/Register