Are corporate codes of conduct effective?

Article Abstract:

A survey of 326 managerial accountants and an additional 264 people designated as controllers was conducted to ascertain the prevalence of corporate codes of conduct and the effect of formal codes of conduct on ethical behavior in light of the recommendations of the Treadway Commission. Many respondents to the survey revealed that they were under pressure to achieve a targeted net income and return on investment (ROI). Surprisingly, the pressure to achieve a targeted net income and ROI was higher in firms with formal codes of conduct than in those firms without formal codes: over half of respondents from firms with formal codes of conduct reported experiencing pressure to achieve a net income figure as compared to 34% of those without formal codes, while 51% of those with formal codes reported experiencing pressure to achieve a specific ROI, compared to 27% of those in firms without a formal code. Survey results reveal that 55% of respondents felt that hiding negative information from internal auditors was difficult, while 61% felt that hiding negative information from outside auditors was not difficult.

Analysis, Auditing, Corporation reports, Company reports

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Ethics and management accountants

Article Abstract:

A National Association of Accountants membership survey on ethics in management accounting examines whether accountants are tempted by or succumb to unethical financial practices. The degree of pressure depends on four job characteristics: job title and years of experience; working for a publicly held or private company; corporate versus divisional level responsibilities; and impact of professional certification. Those with professional certifications generally feel less pressure. Divisional managers feel more pressure to materially alter financial statements than do corporate managers. Private companies put less pressure on accountants than do publicly held ones. Upper managers generally feel some pressure, middle managers the most, and lower managers a little.

Standards, Accounting and auditing, Accounting, Private companies, Surveys, National Association of Accountants

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The controller who said 'no'

Article Abstract:

A case study is made of an accountant who faces ethical issues on the job. The new publication, Standards of Ethical Conduct for Management Accountants, covers the issue of legal liability. The accountant in this case does not believe the company's recent expense reports to be valid. The case involves extreme costs, especially for entertainment, taken by the company president.

Case studies, Ethics, Controllership

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