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Accountants as internal consultants: ethical issues

In some organizations, accountants act as "internal consultants"; they use their knowledge of the company's financial workings to advise the company on financial decisions.

Answer the following questions:

1. What are the ethical considerations for accountants who serve as internal consultants?
2. Do they differ from the ethical issues faces by accountants who do not act as internal consultants?
3. What are the differences / examples of managerial accounting vs. financial accounting?

Solution Preview

ACCOUNTANTS WHO SERVE AS INTERNAL CONSULTANTS MUST HAVE COMPETENCE. THIS MAY NOT BE AS IMPORTANT FOR OTHER ACCOUNTANTS

Management accountants have a responsibility to:
§ Maintain an appropriate level of professional competence by ongoing development of their knowledge and skills.
§ Perform their professional duties in accordance with relevant laws, regulations, and technical standards.
§ Prepare complete and clear reports and recommendations after appropriate analyses of relevant and reliable information.

ACCOUNTANTS WHO SERVE AS INTERNAL CONSULTANTS MUST HAVE CONFIDENTIALITY THIS MAY NOT BE AS IMPORTANT FOR OTHER ACCOUNTANTS
Management accountants have a responsibility to:
§ Refrain from disclosing confidential information acquired in the course of their work except when authorized, unless legally obligated to do so.
§ Inform subordinates as appropriate regarding the confidentiality of information acquired in the course of their work and monitor their activities to assure the maintenance of that confidentiality.
§ Refrain from using or appearing to use confidential information acquired in the course of their work for unethical or illegal advantage either personally or through third parties.

ACCOUNTANTS WHO SERVE AS INTERNAL CONSULTANTS MUST HAVE INTEGRITY THIS MAY NOT BE AS IMPORTANT FOR OTHER ACCOUNTANTS

Management accountants have a responsibility to:
§ Avoid actual or apparent conflicts of interest and advise all appropriate parties of any potential conflict.
§ Refrain from engaging in any activity that ...

Solution Summary

The solution of 861 words breaks down the type of work accountants do while stressing the importance of certain traits. Each category of work is further subdivided into managerial vs. financial accounting.

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