Before Miller Cereals can introduce the new cereal, the board of directors has to give their approval. The marketing manager really wants to introduce the new product and believes (honestly) that it will be profitable and an important next step in the firm’s evolution. However, the marketing manager knows that with the forecasted profit, the board will not approve its introduction.

The marketing manager asks the management accountant what can be done. Based on that request, the accountant reviewed the numbers generated by the intern and thinks the numbers are reasonable. However, the accountant tells the marketing manager that “other” costs consist of many different things, so it would be difficult to question a lower number. The marketing manager suggests that the management accountant lower the estimated other costs by an amount sufficient to get board approval.

Required

Is the management accountant violating the IMA’s code of ethics? If so, what is (are) the violation(s)?  

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Sales revenue Costs Material. Labor Rent.. Depreciation. Utilities Other Total costs Operating profit.. MILLER CEREALS Projected Income Statement for One Year Status Quo: Single Product $ (a) 40,000 (1) (9) 8,000 (0) (1) (g) (c) % Increase (Decrease) 40% (₁) 20% 50% (n) (p) (f) Alternative: Two Products $ (b) 60,000 60,000 (s) 8,000 5,000 (t) (0) (e) Difference $60,000 ZEEI 1,000 (v) (h) $(d)