of Management Accountants (2021), accountants must uphold integrity, objectivity, and
credibility. Changing estimates just to make the short-term financial picture look better goes
against these ethical standards and the general professional duty to provide honest and
transparent information. Management accountants often feel pressured to be careful with their
estimates in order to meet earnings goals. However, such behavior makes investors, auditors, and
regulators less likely to trust you. Ethical accounting indicates that changes to estimates should
be based on verifiable evidence, like changes in how assets are used or industry cycles, not on
what is easiest for managers. The ethical dilemma, therefore, lies between faithfully representing
economic reality and succumbing to pressures for financial gain.
Requirement 3
Following Person’s suggestion would have a significant impact on multiple parties. Inflated
earnings could mislead investors and creditors, leading them to make decisions based on
distorted financial statements. Management could benefit unfairly from performance-based
incentives, while auditors’ reputations might be jeopardized if the misstatement were later
uncovered. Eventually, when assets lose value sooner than expected, American Movieplex would
have to face increased depreciation charges, which would damage long-term credibility and
investor confidence.
All things considered, the Bible expresses that honesty and stewardship should be important in
all business dealings. Proverbs 11:1 declares, “The Lord detests dishonest scales, but accurate
weights find favor with him” (EVS, 2001). Using dishonest scales to make depreciation look
acceptable equates to manipulating depreciation to make the financial picture look satisfactory.
Therefore, ethical accountants must tell the truth in their reports, even when they are under
pressure to achieve better results. To be a responsible steward, you need to ensure that your
business practices are in line with both moral and professional standards. Organizations honor
God and keep the public's trust in financial reporting by putting honesty ahead of manipulation.
References
Financial Accounting Standards Board (FASB). (2021). Conceptual framework for financial
reporting. https://www.fasb.org
Institute of Management Accountants (IMA). (2021). Statement of ethical professional practice.
IMA. https://www.imanet.org
Spiceland, D., Nelson, M., Thomas, W., & Winchel, J. (2025). Intermediate accounting: 2025
release. McGraw-Hill Education.
The Holy Bible, English Standard Version. (2001). Proverbs 11:1. Crossway Bibles.
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