Suppose a management accountant becomes aware that a poor judgment he or she made has resulted in the loss of one of the company's clients.Is the accountant bound to share this information with the company? (The accountant doubts that the company will ever find out about it directly. )
A)The management accountant is bound to respond honestly to inquiries regarding the adequacy of professional judgments but is not bound to communicate them if not directly asked.
B)The management accountant is bound to communicate this error in judgment only if another client cannot be found.
C)The management accountant is not bound to communicate this error.
D)The management accountant is bound to communicate unfavorable and favorable judgments made,even if not directly asked.

Question

Quizplus · Accepted Answer

According to the ethical standards of the Institute of Management Accountants (IMA), management accountants are required to communicate unfavorable as well as favorable information to the company. Therefore, the management accountant is bound to communicate the poor judgment resulting in the loss of a client, even if not directly asked. This helps the company to understand the cause of the loss and take necessary corrective actions to avoid similar situations in the future.

Suppose a Management Accountant Becomes Aware That a Poor Judgment