ETHICAL DILEMA – INTIGRITY

EXAMPLE 1
‘I have found an error going back years that will have caused a loss to our supplier’
THE DILEMMA
My firm has a contract with a supplier that’s paid on the basis of a percentage of a volume of a certain
product. I have found an error going back three years that will have caused a loss to the supplier. I
would like to address the issue openly and compensate the firm directly, but my colleagues in
management would prefer to adjust the forthcoming reports and make up the difference that way.
CIMA’S RESPONSE
Integrity (section 110) is under threat here, undermining fair dealing and truthfulness. Openness now
would be far better than the issue being uncovered and the organisation being seen as deceitful. Section
100.10 recognises that violations may occur inadvertently, but they should be corrected promptly and
any necessary safeguards applied.
EXAMPLE 2
‘I’m working for a young firm in profit for the first time, but I’m concerned about cash-flow risks and the
board has not acted’
THE DILEMMA
I work at a privately owned company that has two majority shareholders on its board, one of whom is
the CEO. The firm is still quite young and, having enjoyed impressive growth, it’s in profit for the first
time. But I talk with the CEO every day about the cash flow risks we run by overtrading. The board is
also aware of this, but it has not acted to raise more cash to ensure that we can pay our creditors when
necessary. Do I need to put anything official to the board in writing?
CIMA’S RESPONSE
You should use your professional judgement to determine when and how to approach the board to
ensure that it acts on your concerns. Review the principle of integrity, (section 110 of the CIMA code of
ethics), as creditors may be affected. Also consider section 150 on regulatory obligations and
professional behaviour.
ETHICAL DILEMA – OBJECTIVITY
EXAMPLE 1
‘There has been a whistle blowing report against someone in my team. Without a clear process of
investigation I’m worried about potential risks’
THE DILEMMA
I am a financial manager and CIMA member. There has been a whistle-blowing report to senior
management against one of my team. It has taken many months for HR to alert me to the issue and now
they are asking me to investigate the allegation. As I am also due to be investigated by the HR director
and there is no clear process, I am concerned about the potential risks.

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CIMA’S RESPONSE
It is important for organisations to have clear processes for staff to speak up against malpractice. It is
recommended that expert advice be taken to put this in place, guided by best practice. As you fear, your
overall objectivity could be at risk (section 120 of the CIMA handbook), and there may be self-interest
or familiarity issues (100.12).
EXAMPLE 2
‘I’m asked to channel profits from one company to prop up another’
THE DILEMMA
My line manager has asked me to channel profits from one company to prop up another that is failing by
creating invoices for services that have not been provided. I have raised my concerns in writing, but I
feel that I should also inform more senior managers in the organisation.
CIMA’S RESPONSE
As well as section 110.2 of the code of ethics, which warns against association with false or misleading
information, section 100.25 (“Communicating with those charged with governance”) states that, if the
professional accountant generally communicates with a sub-group of those charged with governance –
for example, an audit committee or an individual – they should then weigh up whether it’s necessary to
get in touch with all those within the entity’s governance structure so the most appropriate person can
be informed.
ETHICAL DILEMA – PROFESSIONAL COMPETENCE & DUE CARE
EXAMPLE 1
“The Finance Director was made redundant and I’m concerned I’m expected to undertake aspects of
the role.”
THE DILEMMA
The finance director in my company was recently made redundant. As financial controller, I m onerne
tht there’s n assumption I may undertake aspects of the role. Some of these are beyond the remit of my
contract and I am already stretched, having lost other members of my team. I do not feel I should be
signing off anything that a director has formal responsibility for to the board.
CIMA’S RESPONSE
Raise your concerns in writing, making recommendations on what is needed for adequate coverage with
a limited team, any gaps to be filled and limits in your role for director-level duties. The priority is to
safeguard the management of the organisation and there may be threats under the current structure.
Review section 130 on professional competence and due care.
ETHICAL DILEMA – CONFIDENTIALITY
EXAMPLE 1
‘I have concerns about some of the proposed restructures to the company I’m working for’
THE DILEMMA

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I am the FD of a British subsidiary of a US company that’s being restructured. I have concerns about
some of the proposed changes, which I have raised, but the other directors are not responding. I’d like
to broach the subject with our auditor. Would I be breaking confidentiality rules?
CIMA’S RESPONSE
Document all communications on the issue, including those to which you have not had a reply. Review
the principle of confidentiality in relation to an accountant in business (section 140.1 of the CIMA
handbook). It is important to refrain from disclosing information outside the employing organisation
unless required to do so by law or professional duty (140.7). Also, you should not face pressure to
“mislead others”, including auditors (310.2).
EXAMPLE 2
‘I’m a member in practice and have been contacted by the authorities with a request for information
concerning a client’s accounts’
THE DILEMMA
I’m a member in practice who has been contacted by a detective sergeant from the Scottish Crime and
Drug Enforcement Agency with a request for information concerning a client’s accounts. Before I
respond, I would like to know my obligations in releasing this information and how it affects client
confidentiality.
CIMA’S RESPONSE
The principle of confidentiality (covered in section 140 of CIMA’s code of ethics) does allow confidential
information to be disclosed when there’s a legal or professional right or duty to disclose it. But you
must be sure that all relevant information is known and substantiated. You should also ascertain in
writing the police officer’s identity, status and need for this information, so that you can satisfy yourself
that it can be released lawfully.
ETHICAL DILEMA – PROFESSIONAL BEHAVIOUR
EXAMPLE 1
“I’m asked to issue an unrealistically high revenue forecast.”
THE DILEMMA
I’m a new finance manager of new firm that’s done well enough to receive an acquisition approach from
a big corporation, although our income this quarter has been disappointing. The CFO wants me to issue
an unrealistically high revenue forecast. He hopes that the takeover can happen before the inconsistency
between it and our actual results becomes clear. I’m unwilling to do so and I feel that whistle-blowing is
my only option.
CIMA’S RESPONSE
It’s your duty as a CIMA member not only to issue accurate reports but also to provide forecasts that
reflect past performance (see section 300.10 of the code of ethics). First, meet your line manager to
raise your concerns. Then put these in writing and seek a formal response. Blowing the whistle is
appropriate when it’s in the public interest. This may be your only choice ultimately, but you should try
all other options first.