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Merced Home Products-Accounting Ethics Case Wayne A Shaker OMGT 308-001.2014,SP, Financial and Managerial Accounting Instructor: Paul H. Robinson, JD, CPA â€Æ' Most profit making companies understand conducting business within an ethical reporting framework is the proper way to report quarterly results. Often accounting managers are given opportunities to exercise judgment in financial reporting, using their knowledge about the business to improve the effectiveness of financial statements. However, accounting professionals need to perform their job tasks in accordance with laws, regulations, and technical standards while supplying information that is accurate, clear, concise, and timely. At the same time, managers need to be free from pecuniary anxieties, and disclose all relevant information that could influence an intended recipients understanding of the analyses or reports. However, when managers have incentives to produce positive results, profit management can occur while misleading those who review the company’s financial statements. In the case of Merced Home Products Inc., recently hired controller Stacy Cummins has stumbled upon an accounting procedure causing her great concern. Being a new controller, Stacy reviewed the financial statements of the Home Security division discovering profits improved each quarter until a year end climax with outstanding performance. According to the assistant controller, the standard costs had been modified by Vice President, Preston Lansing to reflect positive earnings as the fiscal year progressed. Upon further investigation, Ms. Cummins discovered the president of the Merced Home Products was aware of the reporting using questionable standards and had chosen not to bother Pres... ...ose developed by the Institute of Management Accountants ("Ima," n.d.). The guidelines for ethical behavior cover professional competence, confidentiality, personal integrity, for individuals disclosing financial information. Of course, ethical behavior in reporting is critical to establish creditability to any company to infuluence growth and outside investment. In the end, ethical conduct of the individuals reporting results is essential for maintaining a solid reputation and support continued success. References Brewer, P. C., & Garrison, R. H. (2013). Introduction to managerial accounting (6th ed.). New York: McGraw-Hill/Irwin. Federal Securities Laws. (2002). Retrieved April 29, 2014, from https://www.sec.gov/about/laws.shtml#sox2002 Ima. (n.d.). Retrieved April 29, 2014, from http://www.imanet.org/resources_and_publications/EthicsCenter.aspx