Please limit these responses to a maximum of 2 pages 30 Resp

Please limit these responses to a maximum of 2 pages

30. Responsibility for ethical action (adapted from CMA exam). Emily Johnson recently ined Growth Chemicals, Inc., as assistant controller. Growth Chemicals processes chemicals for use in fertilizers. During her first month on the job, Emily spent most of her time getting better acquainted with those responsible for plant operations. Emily asked the plant supervisor what the procedure was for the disposal of chemicals. The response was that he (the plant supervisor) was not involved in the disposal of waste and that Emily would be wise to ignore the issue. Of course, this only drove Emily to in- vestigate the matter further. Emily soon discovered that Growth Chemicals was dump. ing toxic waste in a nearby public landfil late at night. Further, she discovered that several members of management were involved in arranging for this dumping. Emily was, however, unable to determine whether her superior, the controller, was involved. Emily considered three possible courses of action. She could discuss the matter with her controller, anonymously release the information to the local newspaper, or discuss the situation with an outside member of the board of directors whom she knows personally. 0 2 a. Does Emily have an ethical responsibility to take a course of action? propriate?

Solution

Responsibility on ethical Action

1) Yes, Emily has an ethical Responsibility towards such course of action of company.

Growth Chemical Inc is engaged in illegal action and as a professional management accountant, emily has an obligation to stop the such action.

IMA (Institute of management accountant) has issued an code of conduct called as \'Statement of Ethical Professional Practice\'. According to this statement, Any action which contravene these code of conduct will attract penalty.

Hence, Emily has a professional Responsibility towards such illegal action. Such course of action of company is against the rule and regulations and laws of the country.

Emily has Competence, Objectivity, Confidentiality and Integrity as a professional management accountant and hence emily can not ignore the fact and she should take the ethical action against such activity.

2) Possible course of action

First, emily should discuss the matter with the controller about it. This is most appropriate way since both controller and emily know each other professionally and hence will understand each other from the point of view of benefiting company. If controller is already aware of the situation and doest not take any action then emily should discuss the matter with the Higher management/Those charged with governance. Even if emily does not receive positive response then -

Second, emily should discuss the matter with any outside member of board whom she knows personally. Such member can give enough information about such action and can dicuss the matter with emily.

Even then emily does not receive any positive response then she should leave the company as per her ethics and to save herself from professional misconduct and also for saving herself from being named as lawbreaker in any kind of activity like this.

Thirdly, Also Emily can anonymously reveal the information in the local newspaper since such step would be in social interest because actions of company are not in favour of people and such people are harmed.