James works for Peter's Computer Repair, owned & operated by Peter. As a computer technician, James has grown accustomed to friends & family members asking for assistance with their personal computers. In an effort to increase his income, James started a personal computer repair business that he operates out of his home on a part-time basis, working evenings & weekends. Because James is doing this "on the side" for family & friends, he does not want to charge as much as Peter's charges its customers. When Peter assigned James the task of developing the budget for his department, James increased the amount budgeted for computer parts. When the budget was approved, James purchased as many parts as the budget allowed, even when they were not needed. He then took the extra parts home to use in his personal business in an effort to keep his cost down & profits up. So far, no one at Peter's has asked about the expense of the parts because James has not allowed the actual amount spent to exceed the budgeted amount.

You are required to answer the following;

1. Is James' behavior appropriate as per the IMA's code of ethics?
2. What can be done on the company's part to avoid such behavior in the future?