Avett Manufacturing Company allows employees to purchase materials, such as meta

Question

Avett Manufacturing Company allows employees to purchase materials, such as metal and lumber, for personal use at a price equal to the company's cost. To purchase materials, an employee must complete a materials requisition form, which must then be approved by the employee's immediate supervisor. Brian Dadian, an assistant cost accountant, then ckDges the employee an amount based on Avett's net purchase cost. Brian is in the process of replacing a deck on his home and has requisitioned lumber for personal use, which has been approved in accordance with company policy, In computing the cost of the lumber, Brian reviewed all the purchase invoices for the past year. He then used the lowest price to compute the amount due the company for the lumber The institute of Management Accountants (IMA) is the professional organization for managerial accountants. The IMA has established four principles of ethical

Explanation / Answer

Brian has not acted in an ethical manner. He has placed personal interest above company interest and has not conducted himself professionally. He has breached all the four principles of ethical conduct in the manner mentioned below:

Honesty:

He did not commnuicate that he is using the lowest cost to buy the lumber for personal use to his seniors. Thus, he was dishonest.

Fairness:

His conduct was not fair as he might have made the company suffer a loss by computing the lowest cost.

Objectivity:

Objectivity is the art of neutrality i.e. unbiased opinion.Brian's decision is favored towards himself.

Responsibility:

His actions are not responsible and he has breached his accountability to the company's management and employees.

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