Suppose a Management Accountant Becomes Aware of a Confidential but Illegal

question 112

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.

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Definitions:

Dodd-Frank Act

The Dodd-Frank Act is comprehensive financial reform legislation enacted in 2010 in the United States, aimed at reducing risks in the financial system by increasing transparency and accountability.

FDIC

The Federal Deposit Insurance Corporation, a U.S. government agency that insures deposits at banks and thrift institutions, safeguarding depositors' money.

Financial Institutions

Organizations that provide financial services, including banks, insurance companies, and investment firms.

Charge Accounts

Credit accounts provided by retailers to customers, allowing them to purchase goods or services on credit and pay at a later date.