Decision-Making in Cost Accounting With a Focus on Ethics

Accounting Responsibility

Responsibility of managers in managing projects and creating budgets

Managerial ethics is essential in managing projects and creating budgets. Ethical accounting ensures all financial information is reported to business owners, directors or managers. Managers who fail to report negative information or use a company's internal financial information for personal gain can create serious legal situations for businesses (Vitez, N.d.). Business owners and managers often require all information, whether good or bad, when reviewing business operations and making decisions. It is also important to create accurate budgets. There is often a temptation to tweak budgets to fulfill personal goals. For example, if you favored a particular project you may try to make it more appealing financially. However, it is necessary to be as objective as possible to ensure that you create budgets ethically.

Accountable for achieving financial performance targets

Managers are often under immense pressure to meet financial performance targets. In some cases this can lead managers to make bad decisions. For example, managers can perform activities that are not necessarily in the organizations best interest but help them reach their financial targets. This can be done legally and was as illegally. For example, a manager might transfer inventory to make an asset account look better on paper. While this might not technically be illegal, it is most likely unethical if they are doing it simply to make their performance look better on paper. Managers have a responsibility to stakeholders to account for their performance accurately and with transparency.

Discuss accountability/responsibility and relate back to Scripture.

"Give, and it shall be given unto you; good measure, pressed down, and shaken together, and running over, shall men give unto your bosom. For with the same measure that ye mete withal it shall be measured to you again." Luke 6:38 (Fooshe, N.d.)

Accountability and responsibility are both measures of personal integrity. There are many parts of scripture that can be used to support the ideal of upholding personal integrity. Maybe one of the most fundamental principles that supports this notion would be the golden rule.

Decision-making in cost accounting with a focus on ethics (Accountability/Responsibility part of it)