Edited by Belverd E. Needles, Jr.
IMA (Institute of Management Accountants) is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) program, CSCA® (Certified in Strategy and Competitive Analysis) credential, continuing education, networking, and advocacy of the highest ethical business practices. To learn more about IMA’s ethics resources, visit IMA’s Ethics Center: www.imanet.org/ethicscenter.
IMA’s globally recognized CMA (Certified Management Accountant) is the leading certification for management accountants and financial professionals in business. Earning the CMA requires a mastery of advanced-level knowledge in four critical areas: financial planning, analysis, control, and decision support. For more information about the CMA certification program, please visit www.imanet.org/certification.
© 2017 Institute of Management Accountants. All rights reserved.
ISBN: 978-0-9967293-9-0 (paper)
ISBN: 978-1-119-72215-1 (ePub)
ISBN: 978-1-119-72212-0 (ePDF)
No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution or information storage and retrieval systems, or in any other manner—without the written permission of the publisher. For permission to use material from this text or product, submit a request online to research@imanet.org.
Curtis C. Verschoor, CMA, CPA, CIA, CFE, Ed.D. in Business, Northern Illinois University; MBA and BBA, University of Michigan at Ann Arbor. Former Corporate Controller of the Colgate-Palmolive Company and Baxter International, CFO of a diversified public corporation, and former Chief Internal Audit Executive of The Singer Company. Former National Director of Education at Touche Ross & Co., predecessor of Deloitte.
Verschoor consults and is a prolific author on business and professional ethics, and serves as an expert witness on auditing subjects. He serves on the board of directors and audit committees of nonprofit organizations and is a contributing editor for several academic and practitioner journals.
He is currently Emeritus Ledger & Quill Research Professor in the School of Accountancy and Management Information Systems and Honorary Senior Wicklander Research Fellow in the Institute for Business and Professional Ethics, both at DePaul University; a Research Scholar in the Center for Business Ethics at Bentley University; former Fellow of the Corporate Governance Center at Kennesaw State University; and former Honorary Visiting Professor in the Centre for Research in Corporate Governance at the Sir John Cass Business School In London.
Verschoor has served several professional organizations including membership on senior global technical committees of the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), and the Institute of Internal Auditors (IIA) and is current Chair-Emeritus of the Ethics Committee of IMA® (Institute of Management Accountants).
In 2016, Verschoor was awarded a Lifetime Achievement Award by Trust Across America – Trust Around the World as a top thought leader in trustworthy business.
He can be reached at curtisverschoor@sbcglobal.net.
Belverd E. Needles, Jr., Ph.D., CMA, CPA, EY Distinguished Professor of Accounting. Driehaus College of Business School of Accountancy, DePaul University (USA). He is an internationally recognized expert in international financial reporting and auditing. He teaches financial accounting and auditing at DePaul University and has many years’ experience in executive education. His textbooks, including Principles of Accounting (12th ed.), Financial Accounting (11th ed.), and International Financial Reporting Standards: An Introduction (3rd ed.) are used throughout the world. He has published in leading journals, including most recently on the subject of strategy, financial, and sustainability characteristics of high-performance companies.
Active in many academic and professional organizations, he was president of the International Association for Accounting Education and Research (IAAER) from 1997-2002 and currently serves as Vice-Chair of the Board of Advisors. He served as Vice President-Education of the American Accounting Association (2010-2011) and served on the Consultative Group on International Financial Reporting Standards to the United Nations. He is past Chair of the Board of Directors of the Illinois CPA Society and past president of the IAAER. He served as the elected U.S. representative to the European Accounting Association and president of the Federation of Schools of Accountancy. He served on the Consultative Group of the forerunner to the International Accounting Standards Board (IASB) and on the Education Committee of the International Federation of Accountants (IFAC). He served 15 years on the Board of Directors and as Chair of the Audit Committee of Ziegler Companies, Inc., a capital markets and financial services company.
He has received the Distinguished Alumni Award from Texas Tech University, the Illinois CPA Society Outstanding Educator Award and its Lifetime Achievement Award, and the Joseph A. Silvoso Faculty Award of Merit from the Federation of Schools of Accountancy. He was named Educator of the Year by the American Institute of CPAs, Accountant of the Year for Education by the national honorary society Beta Alpha Psi, and Outstanding International Accounting Educator as well as Lifetime Achievement in Service to Accounting Education by the American Accounting Association.
DePaul University awarded him the Wicklander Fellowship in Business Ethics, the Ledger & Quill Award of Merit, and the Ledger & Quill Teaching Excellence Award.
He received BBA and MBA degrees from Texas Tech University and the Ph.D. from the University of Illinois at Urbana/Champaign.
For companies, professional organizations, and individuals to survive and grow over the long term, they must commit to aligning their plans, people, and activities to ethical behavior. We all know of examples where some have benefited in the short term by unethical behavior—the Enrons, Volkswagens, and Bernie Madoffs of the world, but eventually the house of cards crumbles. This proposition is the theme of the book Driven by Mark L. Frigo and Joel Litman.
Dr. Curtis C. Verschoor demonstrated years ago that a strong ethics policy does indeed help a firm increase its profits, but only if the policy is effectively monitored and enforced over the long run and embedded in the culture of the organization. His research has been published in top academic and professional journals.
In short, a company's attitudes in dealing with customers, employees, and social issues almost inevitably become known to the public, and then affect the company’s sales and the profits of its shareholders.
“Having an effective code of ethics should become an icon of a well-run company,” Verschoor said. “There is a great synergy between doing well with your customers and your employees and doing well by your shareholders. But we can’t just look for what companies say. We have to look at what companies do.”
Verschoor’s study found that more than 75% of consumers claim they would switch brands to support companies dealing more favorably with these issues. Corporate culture is decisive in determining whether an organization will do the right thing, according to a recent report by the ACCA.
A member of IMA® (Institute of Management Accountants) for more than 40 years, Verschoor helped to revitalize the IMA Committee on Ethics, serving as a member for more than 20 years and Chair from 2014 to 2016. His research linking an ethical commitment to superior financial performance led to his interest beginning in 1999 in editing and writing a monthly column in Strategic Finance, the award-winning monthly magazine of IMA.
Since that time, Verschoor has advocated high ethical behavior in business through his monthly columns, which have received the highest marks in readership surveys. For more than 215 consecutive months, these columns have appeared in this professional magazine. Each essay is interesting, instructive, and stimulating.
This volume attempts what might be considered the impossible: to select and organize the best of these ethics essays. Our goal is to choose those essays that are of lasting value; essays that we can all learn from, whether you are a CMA® (Certified Management Accountant), Certified Public Accountant (CPA), or both and whether you work in industry, public accounting, government, or another field that uses your accounting knowledge and expertise, you are expected to maintain a high level of professional ethics. Verschoor’s columns selected for this book are arranged by topic to facilitate the user’s objectives and cover a wide variety of subject areas and include case studies, descriptions of landmark ethical developments, ethics advocacy, and others. It is envisioned that this book may be used in a number of ways. It serves as a resource for the business and/or accounting and finance professional to learn and reinforce ethical behavior both in themselves and in their organizations. In an organization setting, the columns can also function as the basis for discussion in professional education programs.
In academia, the columns can serve as assigned readings covering significant ethics events and issues, supporting a course in financial accounting or auditing. By assigning the readings as background for the topics they are teaching, faculty provide students with a foundation of support for ethical behavior. The columns can also be useful as the source for assigned papers or classroom discussion. IMA chapters and councils may also use the columns for continuing ethics education programs.
The Table of Contents contains a brief summary of each column that is classified into one of 12 chapters with the following topic areas:
Value of a Strong Ethical Culture
Studies of Ethical and Unethical Culture
Public and Management Accounting Ethics
Ethics of Executive Compensation
International Ethics Standards
Fraud Case Studies
Small Organization Fraud Studies
Regulation and Enforcement
Whistleblowing
Sustainability and Integrated Reporting
Tax Avoidance Issues
Students