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Because of the pervasive nature of management accounting and the organizational
level at which many management accountants work, the IMA believed that some
guidelines were necessary to help its members with ethical dilemmas. Thus, Statement
on Management Accounting 1C, Standards of Ethical Conduct for Management
Accountants, was adopted in June 1983. These standards are in the areas of
competence, confidentiality, integrity, and objectivity.


Accountants have always been regarded as individuals of conviction, trust, and
integrity. The most important of all the standards listed are those designated under
integrity. These statements reflect honesty of character and embody the essence
and intent of U.S. laws and moral codes. Standards of integrity should be foremost
in business dealings on individual, group, and corporate levels.
To summarize, cost accounting allows organizations to determine a reliable
and reasonable measurement of “costs” and “benefits.” These costs and benefits
may relate to particular products, customers, divisions, or other objects. Much of
this text is dedicated to discussing the various methods, tools, and techniques used

in cost accounting. However, before providing that discussion, the balance of this
chapter and Chapter 2 provide important descriptive information about trends in
business today, as well as information about important practices widely used by
managers. This descriptive information will establish a context for understanding
the practice of cost accounting in the contemporary organization. One of the big
influences on current business practices is globalization.