Q4 Md.

Mahabubur Rahman ID: 2021110004077

Q4) a) what are the ethical issues you may encounter while working in this organization
(using the text book knowledge along with the real case information)

Ans.

Ethical issues in management accounting

Here is the most common dilemmas involving accounting ethics

 Accounting ethics involving conflicts of interest.

 Predicaments with client confidentiality.
 Impacts of financial reporting.
 Identify potential legal issues.
 Take an outsider’s view.

Code of Ethics for accountants

The fundamental principles within the Code – integrity, objectivity, professional competence
and due care, confidentiality and professional behavior – establish the standard of behavior
expected of a professional accountant (PA) and it reflects the profession’s recognition of its
public interest responsibility.

 Independence and Objectivity.

 Integrity.
 Confidentiality.
 Professional Competence.
 Professional Behavior.

Ethical issues.

Fundamental ethical issues in business include promoting conduct based on integrity and trust,
but more complex issues include accommodating diversity, empathetic decision-making, and
compliance and governance that is consistent with the organization's core values.

Ethical issues occur when a given decision, scenario or activity creates a conflict with a
society's moral principles. ... These conflicts are sometimes legally dangerous, since some of
the alternatives to solve the issue might breach a particular law. Some examples of ethical
dilemma examples include: Taking credit for others' work. Offering a client a worse product
for your own profit. Utilizing inside knowledge for your own profit.
Q4 Md. Mahabubur Rahman ID: 2021110004077

The Five biggest Ethical Issues Facing Organization:

• Accounting.
• Social Media.
• Harassment and Discrimination.
• Health and Safety.
• Technology/Privacy.

1. Accounting

Ethical issues can confront management accountants in many ways. Here are two examples:

A: A division manager has concerns about the commercial potential of a soft-ware product for
which development costs are currently being capitalized as an asset rather than being shown as
an expense for internal reporting purposes. The manager’s bonus is based, in part, on division
profits. The manager argues that showing development costs as an asset is justified because the
new product will generate profits but presents little evidence to support his argument. The last
two products from this division have been unsuccessful. The management accountant disagrees
but wants to avoid a difficult personal confrontation with the boss, the division manager.

B: A packaging supplier, bidding for a new contract, offers the management accountant of the
purchasing company an all-expenses-paid weekend to the Super Bowl. The supplier does not
mention the new contract when extending the invitation. The accountant is not a personal friend
of the supplier. The accountant knows cost issues are critical in approving the new contract and
is concerned that the supplier will ask for details about bids by competing packaging
companies.

In each case the management accountant is faced with an ethical dilemma. A involves
competence, credibility, and integrity. The management accountant should request that the
division manager provide credible evidence that the new product is com-metrically viable. If
the manager does not provide such evidence, expensing development costs in the current period
is appropriate.

“Cooking the books” and otherwise conducting unethical accounting practices is a serious
problem, especially in publicly traded companies. One of the most infamous examples is the
Q4 Md. Mahabubur Rahman ID: 2021110004077

2001 scandal that enveloped American energy company Enron, which for years inaccurately
reported its financial statements and its auditor, accounting firm Arthur Andersen, signed off
on the statements despite them being incorrect. When the truth emerged, both companies went
out of business, Enron’s shareholders lost $25 billion, and although the former “Big Five”
accounting firm had a small portion of its employees working with Enron, the firm’s closure
resulted in 85,000 jobs lost.

Although the Federal Government responded to the Enron case and other corporate scandals
by creating the Sarbanes-Oxley Act in 2002, which mandates new financial reporting
requirements meant to protect consumers, the “Occupy Wall Street” movement of 2011 and
other issues indicate that the public still distrusts corporate financial accountability.

2. Social Media

The widespread nature of social media has made it a factor in employee conduct online and
after hours. Is it ethical for companies to fire or otherwise punish employees for what they post
about? Are social media posts counted as “free speech”? The line is complicated, but it is drawn
when an employee’s online activities are considered disloyal to the employer, meaning that a
Facebook post would go beyond complaining about work and instead do something to reduce
business.

For example, a Yelp employee wrote an article on Medium, a popular blogging website, about
what she perceived as awful working conditions at the influential online review company. Yelp
fired her, and the author said she was let go because her post violated Yelp’s terms of conduct.
Yelp’s CEO denied her claim. Was her blog post libelous, or disloyal conduct, and therefore a
legitimate cause for termination? In order to avoid ambiguity, companies should create social
media policies to elucidate what constitutes an infringement, especially as more states are
passing off-duty conduct laws that prohibit an employer’s ability to punish an employee for
online activities.

3. Harassment and Discrimination

Racial discrimination, sexual harassment, wage inequality these are all costly ethical issues that
employers and employees encounter on a daily basis across the country. According to a news
Q4 Md. Mahabubur Rahman ID: 2021110004077

release from the Equal Employment Opportunity Commission (EEOC), the EEOCC secured
$505 million for victims of discrimination in private sector and government workplaces in
2019. The EEOC states that there are several types of discrimination, including age, disability,
equal pay, genetic information, harassment, national origin, race, religion, retaliation,
pregnancy, sex and sexual harassment.

One type of discrimination, families’ responsibilities discrimination (FRD), has had an increase
in cases of 269% over the last decade, even as other forms of employee discrimination cases
have decreased. FRD is found in every industry and at every level within the company,
according to a 2016 report by the Center for Work Life Law at the UC Hastings College of
Law. The report defines FRD as “when an employee suffers an adverse employment action
based on unexamined biases about how workers with caregiving responsibilities will or should
act, without regard to the workers’ actual performance or preferences.” FRD includes many
types of family responsibilities and caregiving, including pregnancy and eldercare. For
example, a father being fired for wanting to stay home to care for his sick child, or a pregnant
employee not being allowed to take a break even though it was her doctor’s orders.

These cases are expected to continue to rise due to the growing number of family members
who have disabilities, the increase in people 65 and older who need care, the increase of men
who are becoming caregivers, and growing expectation for employees that they can work and
provide family care. Employers will need to adjust to these employee perspectives and
restructure how work can be accomplished to reduce FRD.

4. Health and Safety

The International Labor Organization (ILO) states that 7,397 people die every day from
occupational accidents or work-related diseases. This results in more than 2.7 million deaths
per year. According to the Occupational Safety & Health Administration, the top 10 most
frequently cited violations of 2018 were:

• Fall Protection, unprotected sides and edges and leading edges

• Hazard Communication, classifying harmful chemicals
• Scaffolding, required resistance and maximum weight numbers
• Respiratory Protection, emergency procedures and respiratory/filter equipment
standards
• Lockout/Tagout, controlling hazardous energy such as oil and gas
• Powered Industrial Trucks, safety requirements for fire trucks
Q4 Md. Mahabubur Rahman ID: 2021110004077

• Ladders, standards for how much weight a ladder can sustain

• Electrical, Wiring Methods, procedures for how to circuit to reduce electromagnetic
interference
• Machine Guarding, clarifying that guillotine cutters, shears, power presses and
other machines require point of operation guarding
• Electrical, General Requirements; not placing conductors or equipment in damp or
wet locations

Physical harm isn’t the only safety issue to be aware of, though. In 2019, an ILO report focused
on rise of “psychosocial risks” and work-related stress. These risks, which include factors like
job insecurity, high demands, effort-reward imbalance, and low autonomy, have been
associated with health-related behavioral risks, including a sedentary lifestyle, heavy alcohol
consumption, increased cigarette smoking, and eating disorders.

5. Technology/Privacy

With developments in technological security capability, employers can now monitor their
employees’ activity on their computers and other company-provided electronic devices.
Electronic surveillance is supposed to ensure efficiency and productivity, but when does it
cross the line and become spying? Companies can legally monitor your company email and
internet browser history; in fact, 66% of companies monitor internet connections, according to
2019 data from the American Management Association. 45% of employers track content,
keystrokes and time spent on the keyboard, and 43% store and review computer files as well
as monitor email. Overall, companies aren’t keeping this a secret: 84% told employees that
they are reviewing computer activity. Employees should review the privacy policy to see how
they are being monitored and consider if it can indicate a record of their job performance.

Common Ethical Issue of RMG Sector in Bangladesh.

• Child Labor
• Forced labor
• Freedom of Association
• Discrimination
• Sexual Harassment
• Working hour
Q4 Md. Mahabubur Rahman ID: 2021110004077

• Leave and holidays

• Healthcare Facility
• Safety Training
• Energy Consumption and Chemical emission
• Building Issues

Codes of Conduct of our Organization (Silver Composite Textile Mill LTD)

 Creating Opportunities for Economically Disadvantaged Producers

 Transparency and Accountability
 Fair Trading Practices
 Payment of a Fair Price
 Ensuring no Child Labor and Forced Labor
 Commitment to Non Discrimination, Gender Equity and Freedom of Association
 Ensuring Good Working Conditions
 Providing Capacity Building
 Promoting qualified and low-cost readymade products.
 Respect for the Environment
 Ensuring standard working hour and standard remuneration
 Permitting the employees to enjoy leaves and breaks declared by management
 Energy Consumption and Greenhouse Gas Assessment
 Providing proper and adequate safety training to the labor
 Building issues are prime concerns for operation.
Q4 Md. Mahabubur Rahman ID: 2021110004077

b) What should be your strategy/policy to resolve such ethical conflicts?

Ans.

Resolving Ethical Conflicts.

Ethical Conflicts.

Ethical conflicts arise when individuals are confronted with a collision between general belief
systems about morality, ethics or justice and their own personal situations. Such conflicts could
take place at the individual, professional, or societal level.

The best approach to resolve an ethical conflict in the workplace is to prevent it from happening
in the first place. This means to have a defined core set of values, ethical standards, strong
compliance function and ethical leadership.

I will use these policy to solve the ethical conflict.

Stakeholder Interests

Ethical conflicts arise when stakeholder interests differ. For example, a company may choose
to maximize production and pay little attention to the quality of the end product while the
customers expect the product to meet their specifications. Customers trust the organization to
get it right the first time.

An ethical conflict occurs when the interests of two employees are at odds. For example, two
employees are up for one promotion and one takes credit for the work of the other. The
decision-maker needs to find a way to figure out who deserves credit for the work and make
the decision accordingly.

Conflict Resolution Process

Ethical conflicts do not always deal with right versus wrong issues. Dealing with such conflicts
requires balancing the interests of all parties involved, as I have previously blogged about.
Imagine that the two employees have an equal claim to a promotion to supervisor based on past
performance. Each has a right to it but only one can be chosen. In this case the
supervisor/manager needs to follow a prescribed process to resolve the dilemma by
incorporating an ethical dimension to the decision. Here are six questions to ask:

• Which one is likely to set goals that conform to management’s objectives?

Q4 Md. Mahabubur Rahman ID: 2021110004077

• Which one can best work with stakeholders: customers, suppliers, and so on?
• Which one is more likely to be viewed as an effective leader by the work group?
• Which one is more respected by the work group and is more likely to be followed?
• Which one is more likely to establish an ethical tone at the top?
• Which one has greater leadership potential?

The best approach to resolve an ethical conflict in the workplace is to prevent it from happening
in the first place. This means to have a defined core set of values, ethical standards strong
compliance function and ethical leadership. When conflicts do occur a defined process helps
to resolve it in an effective manner. Here are my thoughts about how best to resolve ethical
conflicts:

Identify the ethical issue.

• Clearly define the problem.

• Ethical issues occur when stakeholder conflict.
• Ethical issues exist when a proposed action may be legal but doesn’t conform to the
ethical standards of the organization.

Identify and evaluate alternative courses of action.

• Consider how each alternative affects the stakeholders.

• Use ethical reasoning to resolve the conflict.
• Evaluate the rights of each party and your obligations to them
• Treat each party fairly in resolving the Conflict
• Weigh the costs and benefits of alternatives.

Seek help if necessary to resolve the Conflict.

• What is the role of your supervisor in this matter an enabler of the conflict or
potential supporter?
• Who can you go to for guidance and support the board of directors?
• If the supervisor is the one creating the conflict, then the employee must consider
whether to jump the chain of command. I will address employee concerns in my
next blog.
• Decide on a course of action.
• Would others in the organization respect me and my decision?
Q4 Md. Mahabubur Rahman ID: 2021110004077

• How would my decision make me feel about myself? Would I be proud of my

decision? Would others be proud my family?
• Would I be able to defend my action if it became public knowledge published in a
newspaper?

A common mistake is to assume that if an action is legal it is, therefore, ethical. This is what’s
known as ethical legalism. A decision to withhold potential product defects from a customer
may not break the law but it is dishonest. It is not an overt lie but the decision fails to disclose
all the information a customer has a right and need to know. Truthfulness is a double-edge
sword and many organizations fail on the transparency end.

Some More Policy:

In applying the Standards of Ethical Professional Practice, you may encounter problems
identifying unethical behavior or resolving an ethical conflict. When faced with ethical issues,
you should follow your organization’s established policies on the resolution of such conflict.
If these policies do not resolve the ethical conflict, you should consider the following courses
of action:

1. Discuss the issue with your immediate supervisor except when it appears that the supervisor
is involved. In that case, present the issue to the next level. If you cannot achieve a satisfactory
resolution, submit the issue to the next management level. If your immediate superior is the
chief executive officer or equivalent, the acceptable reviewing authority may be a group such
as the audit committee, executive committee, board of directors, board of trustees, or owners.
Contact with levels above the immediate superior should be initiated only with your superior’s
knowledge, assuming he or she is not involved. Communication of such problems to authorities
or individuals not employed or engaged by the organization is not considered appropriate,
unless you believe there is a clear violation of the law.

2. Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics
Counselor or other impartial advisor to obtain a better understanding of possible courses of
action.

3. Consult your own attorney as to legal obligations and rights concerning the ethical conflict.
I will try to solve the ethical conflict in this way.