Part 2 · Section F

Professional Ethics

The IMA's ethical framework for management accountants and the organizational side of ethics: fraud risk, anti-bribery law, codes of conduct, whistleblowing, culture and social responsibility. This section is 15% of Part 2 and is tested through short dilemmas.

Begin topic 1 Ethics simulator

15%Exam weight

About 15 of the 100 multiple-choice questions; ethics may also appear in a written-response case. Estimated study time: 14 hours.

0%Section readiness

0 / 2Topics complete

—MCQ accuracy

14 hEstimated study time

Your learning path

Two topics. Topic 1 is the IMA framework every question applies; topic 2 places it inside the organization.

0% of topics complete

CMA exam lens

Questions describe a dilemma and ask which standard is at risk, or what the accountant should do next. The order of the resolution steps matters.

1

Name the standard: competence, confidentiality, integrity or credibility.

2

Choose the right first step: the organization's own policy, then the supervisor (unless involved), then higher levels.

3

Know when going outside the organization is and is not appropriate.

4

Fraud triangle: pressure, opportunity, rationalization, and which one controls address.

5

Culture, codes of conduct, whistleblower protection and sustainability reporting.

Topic 1 of 2

IMA Statement of Ethical Professional Practice

The four principles behind every judgment, the four standards that turn them into duties, and the steps for resolving a conflict. The summaries below are in our own words; read the IMA's published statement for its exact text.

Overarching principlesHonesty, fairness, objectivity, responsibility

IMA members commit to four principles that describe the character expected of them:

The four principles
Principle	What it means in practice
Honesty	Tell the truth in what you report and say; do not mislead by statement or omission.
Fairness	Treat people and interests even-handedly; do not favor one party at others' expense.
Objectivity	Base judgments on evidence, free of bias, pressure or personal interest.
Responsibility	Own your work and its consequences; act in the public interest and the organization's legitimate interest.

Members are also expected to encourage others in their organization to follow these principles.

Principles and standards

Principles: honesty, fairness, objectivity, responsibility. Standards: competence, confidentiality, integrity, credibility. Failing to comply with a standard may lead to disciplinary action.

Exam trapDo not mix the lists. "Integrity" and "credibility" are standards, not principles; "objectivity" and "fairness" are principles, not standards. Questions often offer a principle where a standard is asked for.

The four standardsCompetence, confidentiality, integrity, credibility

The four standards summarized
Standard	Duties (paraphrased)	Typical breach
Competence	Keep knowledge and skills current; follow applicable laws, regulations and technical standards; give decision makers accurate, clear and timely information; help identify and manage risk.	Preparing a lease analysis without understanding the new lease standard
Confidentiality	Keep information private unless disclosure is authorized or legally required; make sure others understand how information may be used; supervise subordinates' compliance; never use confidential information for unethical or illegal gain.	Mentioning an unannounced acquisition to a friend who buys shares
Integrity	Avoid or manage actual conflicts of interest and disclose potential ones; avoid conduct that would stop you carrying out duties ethically; avoid activities that discredit the profession; help build a positive ethical culture.	Approving a contract with a supplier owned by a relative without disclosure
Credibility	Communicate fairly and objectively; disclose all information that could reasonably influence users' understanding; report delays or deficiencies in information, timeliness, processing or internal controls; disclose professional limitations that prevent a responsible judgment.	Leaving an unfavorable variance out of a board report

Exam trapWithholding or delaying unfavorable information is a credibility issue, even when no number is falsified. Many candidates label it "integrity".

Resolving an ethical conflictThe order of steps

flowchart TD
  A[Ethical conflict identified] --> B[Follow the organization's established policy]
  B -->|Not resolved| C[Raise with immediate supervisor]
  C -->|Supervisor involved or no resolution| D[Next management level, up to audit committee or board]
  B -.-> E[Confidential advice: IMA ethics counselor or impartial advisor]
  D -.-> F[Your own attorney on legal rights and duties]
  D -->|Still unresolved| G[Consider resigning; notify an appropriate representative]

Use the organization's own procedures first: its code of conduct and its policies for raising concerns.
If that does not resolve it, take it to your immediate supervisor. If the supervisor is involved, go to the next management level instead, continuing upward if needed. Go to the audit committee or board when the CEO is involved, or when management fails to act.
At any point, get confidential, objective advice (for example, IMA's ethics helpline or another impartial advisor) to understand the options.
Consult your own attorney about your legal obligations, rights and risks.
Going to outside parties (the media, regulators, police) is not appropriate unless the law requires it or permits protected reporting (for example, whistleblower provisions) after internal routes fail or are clearly unsafe.
If the conflict cannot be resolved, resigning (and stating the reason to an appropriate person in the organization) may be the remaining option.

Resolution steps (order)

Organization's policy → immediate supervisor (skip if involved) → higher levels → audit committee / board. Alongside: confidential advisor, own attorney. Outside parties only when legally required or protected. Last resort: resign.

Exam trapThe first step is the organization's established policy, not the supervisor, the IMA, the auditors or the authorities. Skip the supervisor only when the supervisor is involved.

Instructor noteFor "what should she do first?" questions, eliminate any option that goes outside the company or to the media, then any option that goes to someone involved. The remaining internal, policy-based step is almost always the answer.

Finished the IMA Statement?

Mark it complete when you can name the standard in any dilemma and list the resolution steps in order.

Topic 2 of 2

Ethics for the organization

Why fraud happens, how laws and codes constrain behavior, how employees can safely speak up, and how culture and social responsibility shape decisions.

The fraud trianglePressure, opportunity, rationalization

Fraud triangle elements
Element	Examples	Can the organization control it?
Pressure / incentive	Personal debts, unrealistic targets, bonuses tied to short-term earnings	Partly: realistic targets and balanced incentives
Opportunity	Weak controls, no segregation of duties, management override, poor oversight	Most directly: internal controls
Rationalization	"I'll pay it back", "everyone does it", "they underpay me"	Indirectly: culture, training, tone at the top

The fraud diamond adds capability: the position, knowledge and confidence to commit and conceal fraud. Fraud types: asset misappropriation (most common), corruption, and financial statement fraud (least common but costliest).

Fraud triangle

Pressure (motive) + opportunity (weak controls) + rationalization (self-justification). Controls act mainly on opportunity; culture acts on rationalization.

Exam trapInternal controls reduce opportunity; they do little about pressure or rationalization. A code of conduct and ethical leadership work on rationalization.

Codes of conduct, FCPA and whistleblowingRules, law and safe channels to speak up

Code of conduct: covers conflicts of interest, gifts, confidentiality, fair dealing, compliance with laws, use of assets, and how to report concerns. It works only if leaders follow it, staff are trained, and violations have consequences. SOX §406 requires public companies to disclose whether they have a code of ethics for senior financial officers.
FCPA (covered in Part 1E): no corrupt payments to foreign officials to win or keep business; accurate books and adequate internal accounting controls for issuers. Facilitating payments for routine actions are an exception but must be recorded correctly.
Whistleblowing: an anonymous hotline reporting to the audit committee (SOX §301); protection from retaliation for employees who report securities fraud (SOX §806); Dodd-Frank rewards whistleblowers whose original information leads to SEC sanctions over $1 million with 10–30% of the amount collected, and protects them from retaliation.

Exam trapA code of conduct that exists only on paper does not create an ethical culture. Questions about effectiveness point to leadership example, training, enforcement and a safe reporting channel.

Culture, sustainability and social responsibilityTone at the top and the triple bottom line

Culture is set by the tone at the top and reinforced by incentives: pay systems that reward results "at any cost" invite misconduct. Management accountants help by designing balanced measures and speaking up.
Corporate social responsibility (CSR): acting for stakeholders (employees, customers, communities, the environment) as well as shareholders. The triple bottom line measures people, planet and profit.
ESG and sustainability reporting: environmental, social and governance disclosures under frameworks such as GRI (impact on society) and the ISSB's IFRS S1/S2 standards (sustainability and climate risks relevant to investors). Assurance improves credibility.
Greenwashing (overstating environmental performance) is a credibility and integrity breach and increasingly a legal risk.
Ethical sourcing: human rights and labor standards in the supply chain.

Exam trapLegal is not the same as ethical. An action can comply with the law and still breach the IMA standards (for example, selectively disclosing favorable data).

Instructor noteOrganizational-ethics questions often ask what the organization should do (design controls, change incentives, train, set tone), whereas topic 1 questions ask what the individual should do. Check whose action the question asks about.

Finished Ethics for the organization?

Mark it complete when you can diagnose a fraud risk with the triangle and explain how culture, codes and whistleblowing work together.

Calculators

Interactive tools

Each tool is pre-filled with an example from the lessons. Change any input; the results show the method, your numbers and what they mean.

Ethics scenario simulator

Work through branching dilemmas. Each choice is scored against the IMA standards and the order of the resolution steps; feedback explains why.

Scenario

Print-ready

Formula sheet

The principles, standards, resolution steps and fraud triangle on one sheet. Print it from here: the sidebar is hidden and the sheet prints black on white.

Spaced repetition

Flashcards

Recall first, then flip. Your grade schedules the next review (SM-2-lite).

Exam-style questions

Practice MCQs

Practice mode gives instant feedback; timed mode allows 1.8 minutes per question, like the exam. Filter by topic, difficulty, or questions you missed.

Essay section

Written-response practice

Write your answer first (aim for about 30 minutes per case), then compare it with the model answer and score yourself against the rubric. Show your calculations: the exam awards marks for method.

Key terms

Glossary

Search the section's vocabulary. Underlined terms in the lessons show these definitions on hover or keyboard focus.