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    Balanced Scorecard

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    The President of EEC has decided to adopt the Balanced Scorecard. You received an e-mail from him asking about tying compensation with performance measures. Develop a memo in response to the President's questions in which you discuss unethical behavior that can result if the wrong performance measures are used to tie performance measures to compensation. How can EEC avoid these behaviors? How should EEC tie performance measures to compensation?

    Objective: Analyze ethical issues related to managerial accounting.

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    Solution Preview

    The response addresses the queries posted in 2050 words with references.

    //The paper discusses the issues that are related to the association of the compensation in accordance with the performance evaluation of the employees. Before starting a paper like this it is essential to explore the possible areas that gave birth to such issues. The requirement is to analyze the situation and to look into the matter with prudence.//





    Sub: Ethical Issues concerning Managerial Accounting

    Objective: Analyze ethical issues related to managerial accounting.

    The paper moves around the issue of linking reparation with the performance measures. The President of the company is really worried regarding the matter and the requirement is to present the remedies in order to overcome the problem of tying performance measures with the compensation. The problem is very critical as it involves the wrong performance measures. The President is really worried with the eruption of this problem. The problem is very intricate as the company involves effective tools and equipments for gauging the performance of the individual. If there lays discrepancy in the tools it can lead to provide vague and ambiguous results in relation to the compensation of the employees (A Closer Look at Business Education: Accounting, 2006).

    The related issues in the area of managerial accounting have ethical implications. This thing is recognized by the Institute of the Management Accountants. The apex body is accountable for rendering the ethical direction by developing the Standards for Ethical Conduct for the Management Accountants. These standards deal with the issues such as the proficiency, discretion, honesty and objectivity. The key issues those are included in this, ranges from the performance appraisal to the cost repayment and the decisions that take in the managerial ones such as the amount of manufacture and the accounting ones that take into consideration the cost apportionments. The aim of the study is to supply some proof in respect with the behavior that takes into account the ethical issues in terms with the five definite decision areas that are found in the area of the managerial accounting.

    //Moving on, next the organization needs to look into the matter in order to locate the areas that can lead to make the organization affect by linking the compensation of the employees with the performance evaluation in a wrong manner.//

    The managerial accounting research has been successful in investigating the areas in relation with the ethical issues. During the course of examination the facts reveals that the overhead allocated to the contracts and it showcases that the firms have incentives to get employed in pure waste by enclosing details in terms with the direct labor utilization on contracts with the cost-based revenues. The studies have furnished evidence on the matter that takes into account that how the managers are found to distribute the earnings so as to take full advantage of the compensation or to amplify the assessment of the performance. These manipulations generally involve the accounting choices, but the remaining is found to entail the managerial decisions (Bowie, 2002).

    The chief issues in relation to this are overproduction, cost allocation, estimation of the equivalent units, Investment ...

    Solution Summary

    The response addresses the queries posted in 2050 words with references.