Background
Merz and Groebner (1981) first recommended that management accountants adopt a code of ethics. In 1983, The IMA (known then as the National Association of Accountants) officially issued a code of ethics entitled Standards of Ethical Conduct for Management Accountants (see The Institute of Management Accountants, 1983). In October 1985 the Executive Committee of the IMA voted unanimously to require all IMA members to comply with the Code of Ethics. Donabedian (1993) developed a normative model to explain the factors at work in enforcing professional codes of ethics. He argued that the effectiveness of professional codes of ethics is dependent on the losses members face if they leave the profession: competitive wages, transferability of accountants’ skills to other occupations, the professional authority’s control over access to work, monopoly rents from professional practice, and negative publicity.

Management accountants are not obligated to join the IMA in order to perform management accounting services. CPAs by contrast, must obtain a license from a state board of accountancy to practice public accountancy. Likewise, a management accountant faces, at worst, loss of membership for violating the IMA Code of Ethics. On the other hand, a state board of accountancy can revoke a CPA’s license to practice public accountancy for violating one of its rules. Loss of membership, although not as severe as some state board of accountancy penalties, carries consequences in the form of lost member benefits such as professional standing, networking opportunities, educational or training programs, insurance, and car rental discounts.

In addition to IMA membership, an individual may apply to become a Certified Management Accountant (CMA). To do so, an applicant must meet necessary education and experience requirements, pass the CMA exam, and periodically complete continuing education. Given the amount of resources expended on the CMA program, we feel it is important to determine if the certification status of IMA members is related to their ethical perception and judgment.

Douglas E. Ziegenfuss

Previously published in: Managerial Auditing Journal, Volume 17, Number 4, 2002  less