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Suppose a Management Accountant Becomes Aware of a Confidential but Illegal

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Essay

Suppose a management accountant becomes aware of a confidential but illegal act that has occurred within her company.The management accountant must consider what she is ethically bound to do about this situation.Three alternative responses to this situation are given below.State whether you agree or disagree with each,and briefly detail your reasons.
a.The accountant must remain loyal to the company at all times and should report the occurrence only to appropriate officials within the company.
b.The accountant is bound to inform officials only if she stands to personally gain (make money)from knowledge of the illegal act.
c.The accountant must exercise personal judgment;a clear-cut answer does not exist given the limited information provided.


Definitions:

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced.

Variable Cost

A cost that changes with the level of output or production.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.

Marginal Costs

refers to the cost associated with producing each additional unit of a product or service.

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