EXHIBIT 1.17 Statement of Ethical Professional Practice Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values, and standards that guide our conduct. IMA's overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility. Members shall act in accordance with these principles and shall encourage others within their organizations to adhere to them. A member's failure to comply with the following standards may result in disciplinary action. Competence Each member has a responsibility to . Maintain an appropriate level of professional expertise by continually developing knowledge and skills. . Perform professional duties in accordance with relevant laws, regulations, and technical standards. . Provide decision support information and recommendations that are accurate, clear, concise, and timely. Recognize and help manage risk. Confidentiality Each member has a responsibility to . Keep information confidential except when disclosure is authorized or legally required. . Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.Confidentiality Each member has a responsibility to . Keep information confidential except when disclosure is authorized or legally required. . Inform all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance. . Refrain from using confidential information for unethical or illegal advantage. Integrity Each member has a responsibility to . Mitigate actual conflicts of interest and avoid apparent conflicts of interest. Advise all parties of any potential conflicts. . Refrain from engaging in any conduct that would prejudice carrying out duties ethically. . Abstain from engaging in or supporting any activity that might discredit the profession. . Contribute to a positive ethical culture and place integrity of the profession above personal interests. Credibility Each member has a responsibility to . Communicate information fairly and objectively. . Provide all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations. . Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law. . Communicate professional limitations or other constraints that would preclude responsible judgment or successfulCredibility Each member has a responsibility to . Communicate information fairly and objectively. . Provide all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations. . Report any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law. . Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity. Resolution of Ethical Conflict In applying the Standards of Ethical Professional Practice, the member may encounter unethical issues or behavior. In these situations, the member should not ignore them, but rather should actively seek resolution of the issue. In determining which steps to follow, the member should consider all risks involved and whether protections exist against retaliation. When faced with unethical issues, the member should follow the established policies of his or her organization, including use of an anonymous reporting system if available. If the organization does not have established policies, the member should consider the following courses of action: . The resolution process could include a discussion with the member's immediate supervisor. If the supervisor appears to be involved, the issue could be presented to the next level of management. . IMA offers an anonymous helpline that the member may call to request how key elements of the IMA Statement of Ethical Professional Practice could be applied to the ethical issue.organization policy and/ or applicable law. . Communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity. Resolution of Ethical Conflict In applying the Standards of Ethical Professional Practice, the member may encounter unethical issues or behavior. In these situations, the member should not ignore them, but rather should actively seek resolution of the issue. In determining which steps to follow, the member should consider all risks involved and whether protections exist against retaliation. When faced with unethical issues, the member should follow the established policies of his or her organization, including use of an anonymous reporting system if available. If the organization does not have established policies, the member should consider the following courses of action: . The resolution process could include a discussion with the member's immediate supervisor. If the supervisor appears to be involved, the issue could be presented to the next level of management. . IMA offers an anonymous helpline that the member may call to request how key elements of the IMA Statement of Ethical Professional Practice could be applied to the ethical issue. . The member should consider consulting his or her own attorney to learn of any legal obligations, rights, and risks concerning the issue. If resolution efforts are not successful, the member may wish to consider disassociating from the organization.Advances in biological technology have enabled two research companies, Bio Labs, Inc., and Scientific Associates, to develop an insect- resistant corn seed. Neither company is financially strong enough to develop the distribution channels necessary to bring the product to world markets. World Agra Distributors, Inc., has negotiated contracts with both companies for the exclusive right to market their seed. Bio Labs signed an agreement to receive an annual royalty of $1,000,000. In contrast, Scientific Associates chose an agreement that provides for a royalty of $0.50 per pound of seed sold. Both agreements have a 10-year term. During Year 1, World Agra sold approximately 1,600,000 pounds of the Bio Labs, Inc., seed and 2,400,000 pounds of the Scientific Associates seed. Both types of seed were sold for $1.25 per pound. By the end of the Year 1, it was apparent that the seed developed by Scientific Associates was superior. Although insect infestation was virtually nonexistent for both types of seed, the seed developed by Scientific Associates produced corn that was sweeter and had consistently higher yields. World Agra Distributors' chief financial officer, Roger Weatherstone, recently retired. To the astonishment of the annual planning committee, Mr. Weatherstone's replacement, Ray Borrough, adamantly recommended that the marketing department develop a major advertising campaign to promote the seed developed by Bio Labs, Inc. The planning committee reluctantly approved the recommendation. A $ 100,000 ad campaign was launched; the ads emphasized the ability of the Bio Labs seed to avoid insect infestation. The campaign was silent with respect to taste or crop yield. It did not mention the seed developed by Scientific Associates. World Agra's sales staff was instructed to push the Bio Labs seed and to sell the Scientific Associates seed only on customer demand. Although total sales remained relatively constant during Year 2, sales of the Scientific Associates seed fell to approximately 1,300,000 pounds while sales of the Bio Labs, Inc., seed rose to 2,700,000 pounds.Required a. Determine the amount of increase or decrease in profitability experienced by World Agra in Year 2 as a result of promoting the Bio Labs seed. Support your answer with appropriate commentary. b. Did World Agra's customers in particular and society in general benefit or suffer from the decision to promote the Bio Labs seed? c. Review the statement of ethical professional practice in [ Exhibit 1.17 of ) Chapter 1 and comment on whether Mr. Borrough's recommendation violated any of the standards in the code of ethical conduct. d. Comment on your belief regarding the adequacy of the statement of ethical professional practice in terms of directing the conduct of management accountants. e. Are the actions of Ray Borrough in violation of the provisions of Sarbanes-Oxley that were described in Chapter 1? Explain your