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Code of Ethical Standards - entirely of independent...

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Code of Ethical Standards In response to corporate scandals in 2000 and 2001, the U.S. Congress enacted legislation to help  prevent lapses in internal control. This legislation, referred to as the  Sarbanes-Oxley Act of 2002   (SOX) , has important implications for the financial community. One result of SOX was to clarify top  management's responsibility for the company's financial statements. CEOs and CFOs must now  certify that financial statements give a fair presentation of the company's operating results and its  financial condition. In addition, top managers must certify that the company maintains an adequate  system of internal controls to safeguard the company's assets and ensure accurate financial reports. Another result of Sarbanes-Oxley is that companies now pay more attention to the composition of the  board of directors. In particular, the audit committee of the board of directors must be comprised 
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Unformatted text preview: entirely of independent members (that is, non-employees) and must contain at least one financial expert. Finally, to increase the likelihood of compliance with the rules that are part of the new legislation, the law substantially increases the penalties for misconduct. To provide guidance for managerial accountants, the Institute of Management Accountants (IMA) has developed a code of ethical standards, entitled IMA Statement of Ethical Professional Practice. Management accountants should not commit acts in violation of these standards. Nor should they condone such acts by others within their organizations. The IMA code of ethical standards can be accessed at www.imanet.org . Throughout the managerial accounting chapters, we will address various ethical issues managers face....
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