Current Ethical Issues in Managerial Accounting Report - Research Paper Example

The ethical issues might generate from these activities or functions which perform by the managerial accountants in an organization. The various ethical issues which are currently prevailing in management accounting reports are related to overproduction, cost allocation, replacement of assets and conflicting interests amid the stakeholders (Taicu, n.d.). This paper intends to identify a particular ethical issue that is currently being debated. Moreover, a detailed analysis of the identified ethical issue, recognition of the relevant stakeholders and suitable recommendations as well as rationale to mitigate with the ethical issues will also be depicted in this paper.

A Brief Overview of the Recent Ethical Issue A recent ethical issue has been observed in an organization named UBS, a global business firm which offers different financial services to the customers in over 50 nations. It has been viewed that the organization faced substantial financial loss of nearly UK$ 2.3 billion in the year 2011 due to the involvement of certain ethical issues. The ethical issues which were involved in this case were regarding false accounting and fraudulent activity of misinterpretation of the financial statements which can be related to the process of managerial accounting.

In relation to this case, the former trader of UBS named Kweku Adoboli was alleged for the conduct of such ethical issues. False accounting can be considered as one of the major ethical issues as it occurs when the assets or liabilities of an organization are overstated for the motive of making the financial position of the business more stronger. The ethical issue of false accounting generally occurs due to various reasons like hiding losses, inflating the share prices, reporting unrealistic profits and obtaining additional financing from banks.

The ethical issue of false accounting was majorly involved with the case of UBS. The former trader of the company i.e. Kweku Adoboli may perform the ethical issue of false accounting by adopting any one of the aforementioned unethical practices. Consequently, the former trader was arrested due to the conduct of unethical practices in terms of false accounting and fraudulent activity of misinterpretation of the financial statements (Shirbon, 2012). Identification of the Relevant Stakeholders The stakeholders are regarded as individuals or groups upon whom an organization depends for its success.

They invest significant amounts of money into an organization and anticipate attaining greater financial return. With regard to the ethical issues, it has been apparently observed that the organization suffered huge financial loss of nearly UK$ 2.3 billion in the year due to the prevalence of significant moral issues. The ethical issues include false accounting practices and fraudulent acts of misinterpretation of financial statements. The relevant stakeholders who were involved with the ethical practices are the company itself and the former trader of UBS named Kweku Adoboli.

The potential reason of this stakeholder i.e. Kweku Adoboli to conduct the ethical practice of false accounting was to strengthen his financial position and also to attain significant earnings (Shirbon, 2012). Recommendations and Rationale After acquiring a brief idea about the ethical pract