ETHICAL DILEMMAS:
What would you do?
At some point in your career you may be faced with an ethical dilemma. Given that you are required to
comply with the CIMA Code of Ethics in order to uphold your professional standing – what would you do?
Ethical dilemmas do not always have a prescriptive and clear cut response (unless there is evidence of
breaking the law or accepted regulations). You may have discovered something you believe to be illegal or
fraudulent, or someone may be pressuring you to mislead, or to report in a way that is against or marginal
to accepted accounting standards or outside the law. Conflicts of interest and confidentiality are also
ethical issues.
By using the Code as guidance members and students can review their options and decide on a course of
action in order to resolve the issue. As a trained professional you have a responsibility and a professional
duty to exercise good judgement and be accountable for your actions to the profession and the public.
Understanding the wider strategic implications and the impact on the business, or society, is part of your
role.
These case studies are linked to the fundamental principles which a CIMA professional accountant is
required to uphold:
a) Integrity
b) Objectivity
c) Professional competence and due care
d) Confidentiality
e) Professional behaviour
The case studies demonstrate how the Code of Ethics works in practice and guides you to areas in the
Code which would apply. It is not exhaustive. There is also a checklist (see full checklist) you can work
through when faced with an ethical dilemma to help you determine a course of action.
CHECKLIST (summary)
Key questions to also consider when facing an ethical dilemma rest on a personal feelings – you generally
know if something feels right, if you are unsure ask yourself:
• Would I feel comfortable about my professional peers, family and friends knowing about the situation?
• How would I feel if I saw this in a newspaper?
Check all your
facts and where
possible document
Possible course of
action and internal/
external escalation
Seek professional
or legal advice
Is it ethical - have
you considered
the ethical issues
involved?
Identify the
affected parties
Refuse to remain
associated with
the conflict
Is it legal?
Identify which
fundamental
principles are
affected
If you have concerns – you most probably have a dilemma! The longer you leave resolving it, the more
chance there is for there to be repercussions for the organisation, yourself and the standing of the
profession.
Please see CIMA’s full ethical checklist.
Ethical dilemmas: what would you do?
CASE STUDY TWO: WITHHOLDING INFORMATION
You are a CIMA member who is a non-executive director of a large services company. The board of directors meets
on a monthly basis to discuss the quarterly forecast and other business issues.It is the responsibility of the finance
director to distribute papers at least two weeks prior to the date of the meeting. These papers should first be signed
off by the CEO. Recently documents have only been received a day before the meeting. You have raised this with
the finance director who has stated the delay is due to the sign-off by the CEO. You do not feel that you are given
sufficient time to review the papers, and also believe the information that is available is not complete and therefore
difficult to fully appraise. The CEO is a very dominant character and many members of the board are nervous about
broaching the matter.
Integrity
Objectivity
Professional competence
and due care
Confidentiality
Professional behaviour
You need to uphold your integrity by addressing the matter – there is a need to be
straightforward and honest. See section110.
Your objectivity is being compromised not only on the basis of lack of full and timely
information, but also the perceived threats of the CEO’s behaviour. See sections
300.12 -300.15.
You need to have full and correct information in a timely manner in order to carry out
your role. See section 330.2.
You would be expected to resolve the issues internally where possible without
disclosing confidential information. See section 140.1.
Your professional behaviour is compromised without addressing the issue and you
would not be discharging your duties (and nor would your colleagues). See section
320.2.
Integrity
110.1 The principle of integrity imposes an obligation on all professional accountants to be straightforward and
honest in all professional and business relationships. Integrity also implies fair dealing and truthfulness.
110.2 A professional accountant shall not knowingly be associated with reports, returns, communications or other
information where the professional accountant believes that the information:
a) Contains a materially false or misleading statement;
b) Contains statements or information furnished recklessly; or
c) Omits or obscures information required to be included where such omission or obscurity would be misleading.
When a professional accountant becomes aware that the accountant has been associated with such information, the
accountant shall take steps to be disassociated from that information.
110.3 A professional accountant will be deemed not to be in breach of paragraph 110.2 if the professional
accountant provides a modified report in respect of a matter contained in paragraph 110.2.
Objectivity
300.12 Examples of circumstances that may create intimidation threats for a professional accountant in business
include:

Threat of dismissal or replacement of the professional accountant in business or a close or immediate
family member over a disagreement about the application of an accounting principle or the way in which
financial information is to be reported.
Ethical dilemmas: what would you do?

A dominant personality attempting to influence the decision making process, for example with regard to the
awarding of contracts or the application of an accounting principle.
300.15 In circumstances where a professional accountant in business believes that unethical behaviour or actions by
others will continue to occur within the employing organization, the professional accountant in business may
consider obtaining legal advice. In those extreme situations where all available safeguards have been exhausted and
it is not possible to reduce the threat to an acceptable level, a professional accountant in business may conclude that
it is appropriate to resign from the employing organization.
Professional Competence and Due Care
330.2 Circumstances that create a threat to a professional accountant in business performing duties with the
appropriate degree of professional competence and due care include having:




Insufficient time for properly performing or completing the relevant duties.
Incomplete, restricted or otherwise inadequate information for performing the duties properly.
Insufficient experience, training and/or education.
Inadequate resources for the proper performance of the duties.
Confidentiality
140.1 The principle of confidentiality imposes an obligation on all professional accountants to refrain from:
a) Disclosing outside the firm or employing organization confidential information acquired as a result of
professional and business relationships without proper and specific authority or unless there is a legal or professional
right or duty to disclose; and
b) Using confidential information acquired as a result of professional and business relationships to their personal
advantage or the advantage of third parties.
Professional Behaviour
320.2 A professional accountant in business who has responsibility for the preparation or approval of the general
purpose financial statements of an employing organization shall be satisfied that those financial statements are
presented in accordance with the applicable financial reporting standards.
Ethical dilemmas: what would you do?