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In 200 words or so answer this question after reading the case and the IMA Statement : Assess Melissa’s situation and identify the most significant issues that she faces based on the newly issued IMA Statement (specifically with respect to Competence, Confidentiality, Integrity, and Credibility)


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ISSN 1940-204X
Watson Water Technologies:
Ethical Dilemma in the Workplace
Andrew Bargerstock, M.B.A., C.P.A., Ph.D.
Chair of the Accounting Department and
Director of the MBA Program
Maharishi University of Management
Ye Shi, M.B.A., CMA, Ph.D. candidate
Assistant Professor in Business Administration
Maharishi University of Management
The IMA® (Institute of Management Accountants) Committee on Ethics and Raef Lawson, CMA, CFA, CFP, CPA, Ph.D., vice president of Research and
Professor-in-Residence, are proud to announce that Andrew Bargerstock, CPA, and Ye Shi have won the Best Case Award in the seventh annual Carl
Menconi Case Writing Competition for their case, “Watson Water Technologies: An Ethical Dilemma in the Workplace.” The competition is named in
memory of Carl Menconi, who held leadership positions in IMA for many years and served as chair of the IMA Committee on Ethics. The objective of the
competition is to develop and distribute business ethics cases with specific application to management accounting and finance issues and that use the
IMA Statement of Ethical Professional Practice as a reference or guidance tool. The winning case and teaching notes are available for use in a classroom
or business setting. IMA academic members can access and download the teaching notes from the Academic Teaching Notes library in LinkUp IMA. Others
who want to use the case and notes should contact Kerry Butkera at [email protected].
As she rode the train, Melissa thought about her job at
WWT and how she had tried for three years to get a position
with the company. Her father, Joshua Parks, is a Senior
Product Design Engineer with WWT’s Corporate Design
Division, and he had long expressed his pleasure with
working for WWT, especially in light of what he saw as its
“humanitarian mission.” He frequently encouraged her to
join him in working for the company.
During her first few weeks, Melissa had the chance to
see firsthand what her father had been describing. WWT
manufactured large-scale water purification systems and sold
them to government and private institutions worldwide.
Much of the company’s products were sold in third-world
countries. In the most recent Watson Annual Report, the
company’s CEO, Jared Watkowski, cited the development of
new business opportunities in Africa and Southeast Asia as a
high priority for the next two to five years.
During the Monday morning train ride to her job at the
U.S. headquarters of Watson Water Technologies (WWT)
in Chicago, Ill., Melissa Parks, CMA, reflected on her
previous month as the company’s new eXtensible Business
Reporting Language (XBRL) Specialist in the Securities &
Exchange Commission (SEC) Reporting Group. She had
heard a radio report earlier that morning that discussed a
large multinational corporation receiving a $250 million fine
from the SEC for violations of the Foreign Corrupt Practices
Act (FCPA), a U.S. law that forbids financial payments to
foreign officials for the purpose of procuring a business
contract. Melissa took special interest in this report because
it reminded her of a strange conversation she had overheard
the previous Friday morning.
VOL. 11, N O. 2, ART. 1, JUNE 2018
©2 0 1 8 I MA
Working for the SEC Reporting Group brought about
special challenges at the publicly traded company. During
the previous three years, WWT had been utilizing a
third-party XBRL data conversion company to meet SEC
provisions that require all regulated companies to submit
reports using XBRL. But Melissa’s three years of experience
with an XBRL data conversion consulting firm had given her
the technical background needed for her new position. Her
main responsibilities at WWT included ensuring data quality
and the accuracy of XBRL filings so that they conform to the
SEC’s requirements. She enjoyed the work, felt comfortable
with the technical requirements, and was happy to be
working at the same corporate office building as her father.
Yet the incident on Friday stuck in her mind that Monday
morning and made her uneasy. She had unintentionally
overhead two colleagues discussing the details of a project,
and she felt conflicted about the ethical implications of what
she heard. Even after thinking about it all weekend, she still
wondered what she should do next.
Tom talking about bribing government officials? Melissa
worried about the incident all morning. She decided to get
some advice from her supervisor.
On Friday afternoon, Melissa spoke with Bradford Wagner,
her team leader, and explained to him what happened.
Bradford, whose career began in IT services and then moved
to management information systems, had expertise in
covered systems analysis, enterprise resource planning, and,
more recently, the technical side of XBRL tagging.
After listening to Melissa’s story, including her concerns
about possible FCPA violations, Bradford responded, “I
suggest that you let this slide. You don’t want to be perceived
as a troublemaker. The Sales Division has been put under
a lot of pressure to open up Africa. It wouldn’t look good
for you or our SEC Group if you stir up things. Besides, you
probably misheard what they were saying. It was probably
just a joke. I suggest you keep focused on your work.”
Melissa took a deep breath and said, “Maybe you’re right.”
She finished the day. On the way home, still unsatisfied with
her conversation with Bradford, she decided to do some
research on the FCPA and her ethical responsibilities as a
CMA® (Certified Management Accountant).
Melissa considered talking to her father, but she felt
that his response would likely go along with Bradford’s
suggestions and focus on not making trouble for the
company. Her father had served two tours of duty with the
U.S. Marines before joining WWT 15 years ago. He was very
loyal to the chain of command and knew the importance of
growing revenues for the business. Melissa also wasn’t sure
if the IMA Statement of Ethical Professional Practice might
view such a discussion with her father as a breach of the
professional confidentiality standard. Finally, Melissa sensed
that her father might feel embarrassed if she challenged the
Sales Division’s honesty. Her father’s pending promotion to
Division Engineering Manager could be affected.
Around 10 a.m. on the previous Friday, Melissa visited the
10th floor break room. The room was empty except for two
men, Tom Bedinger and Jim Wang, who were seated out of
view on the other side of a partition. They didn’t appear to
have heard or noticed Melissa enter the room. As she headed
toward the coffee station, Tom began to talk about a specific
sales project called “Grow Africa.” He was excited that he
was able to be part of a team that “closed the deal with three
African governments” on his latest business trip and was
sharing his excitement with Jim.
Jim expressed his surprise at the result, saying, “I heard
there was a lot of competition for that deal. How did you
close it so quickly?” Tom chuckled, paused momentarily,
and then said in a stage whisper, “As you know, we’ve been
under a lot of pressure to hit our sales numbers in Africa,
and this was a tough sale. We are really good at pitching the
business plan, but it’s a different world in Africa. Thank
goodness we have a special fund to…smooth…the palms of
government officials when needed. Worked like a charm.
It’s all hush hush, so don’t repeat this to anyone.” As Tom
completed his explanation, both he and Jim stood up to
leave. That was when they noticed Melissa. Appearing a
bit flustered, Tom continued, spilling his words loudly as
the two men headed toward the door. “Of course, I was just
joking, but you know that.” They hurried out the door.
Melissa was shocked and dismayed. She wondered why
she had had to hear this conversation. Did she really hear
On Saturday morning, Melissa researched both the IMA
Statement and specific provisions of the FCPA. She took note
of what she felt were the relevant provisions of each resource.
IMA Statement of Ethical Professional Practice. The ethical
principles in the IMA Statement include honesty, fairness,
objectivity, and responsibility. Being a member of IMA®
(Institute of Management Accountants) and a CMA, Melissa
understood that she should act in accordance with the
VOL. 11, N O. 2, ART. 1, JUNE 2018
“Dad, do you know Tom Bedinger in the Sales
Division?” Melissa asked while stirring her coffee. She stared
at the cup, deep in thought.
“Of course. He’s a smart young man. I’ve known him
since his first day with us. He’s very good at what he does.
His team closed the deal for ‘Grow Africa’ recently. They did
a marvelous job. Watkowski was very pleased.”
Melissa decided to dive in. “I need your advice on
something I heard Tom say about the Grow Africa project.”
Melissa paused, trying to figure out how to tell her father,
“I overheard him talking about the project on Friday in the
break room.”
Melissa’s voice trailed off for a second, and her father
couldn’t help but notice her knitted brow and disappointed
tone. He knew something was bothering her. He moved
closer and asked, “What did you hear?”
“Tom mentioned that they closed the Africa deal
with the aid of a special fund used to bribe government
officials…” Melissa looked at her father and tried to notice
any tiny change on his face. “It sounds like they have a
special fund that has been used for a long time. If what Tom
said was true, it’s really disturbing. This is clearly unethical
and violates the FCPA. We all know how bad the results
could be if such wrongdoing is revealed. Enron, WorldCom,
and many business giants have collapsed because of
corruption and bribery. WWT could have to pay millions in
penalties and negative public relations.”
There was a long silence in the room. Finally, her father
asked, “Is it possible you might be misinterpreting things?
Are you sure you heard him correctly?”
“I heard it clearly, but I didn’t verify it with Tom,”
Melissa answered. “Later, I talked to Bradford Wagner, my
team leader, who said I should keep it to myself.”
Melissa’s father sighed and thought for a second. “He’s
probably right. What can you do with just a few words that you
overheard in a break room? Above all, think about your own
future. This is only your second month at the company. You
have a promising job with great room for advancement. You’ve
been preparing for this position for years. If you talk to others
about this, your career could be ruined—and mine, too!”
Melissa’s heart sank. “I do value my career, which is
why I’m so concerned now. I don’t want to cause trouble
for you, me, or the company. But I have professional ethical
obligations. And you sent me to college and paid for my
education so I would learn how and when to do the right
thing. You encouraged me to become a CMA, where I learned
ethical standards that I’m now required to obey. I know the
right thing to do, but it could be painful, dangerous, and
contribute to the destruction of my own career.”
principles in the IMA Statement and encourage others within
Watson’s SEC Reporting Group to adhere to them. The
standards include competence, confidentiality, integrity, and
credibility. Melissa felt that confidentiality and integrity were
important to her decision about what action she should take,
if any. She recalled her MBA studies, where she learned
about the Enron scandal and how key employees knew
about the improper business practices but didn’t take any
action to challenge what was happening. Melissa didn’t want
to be a part of a similar incident.
The Foreign Corrupt Practices Act. Essentially, the FCPA
makes it illegal for a representative of a U.S. company to bribe
foreign officials to procure a contract. Part of the statute reads:
“It shall be unlawful for any issuer which has a class of
securities [regulated by the SEC], or for any officer, director,
employee, or agent of such issuer or any stockholder thereof
acting on behalf of such issuer, to make use of the mails
or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to
pay, or authorization of the payment of any money, or
offer, gift, promise to give, or authorization of the giving of
anything of value to any foreign official for purposes of:

any act or decision of such foreign official in
his official capacity,

inducing such foreign official to do or omit to do any act
in violation of the lawful duty of such official,

securing any improper advantage, or

inducing such foreign official to use his influence with a
foreign government or instrumentality thereof to affect
or influence any act or decision of such government or
instrumentality, in order to assist such issuer in obtaining
or retaining business for or with, or directing business to,
any person.”
On Sunday, Melissa visited her parents. Sundays were
usually times for sharing and celebration in the Parks family.
This time, however, Melissa was nervous because she knew
she had to discuss with her father what she should do, and
she didn’t know what he would say.
After the family finished dinner, everyone moved to
the living room, sitting comfortably and relaxing. Now in
his 15th year with the company, Melissa’s father, Joshua,
had been informed that he would be promoted to Division
Engineering Manager in the coming year.
VOL. 11, N O. 2, ART. 1, JUNE 2018
Disappointed and still no closer to a decision, Melissa said
her goodbyes and got ready to head home. As she headed out
the door, her father said, “Be careful, dear. Don’t do anything
you will regret.” Melissa didn’t sleep well that night.
IMA®, the association of accountants and financial
professionals in business, is one of the largest and most
respected associations focused exclusively on advancing the
management accounting profession. Globally, IMA supports
the profession through research, the CMA® (Certified
Management Accountant) program, continuing education,
networking and advocacy of the highest ethical business
practices. IMA has a global network of more than 100,000
members in 140 countries and 300 professional and student
chapters. Headquartered in Montvale, N.J., USA, IMA
provides localized services through its four global regions: The
Americas, Asia/Pacific, Europe, and Middle East/India. For
more information about IMA, please visit
After her research and the conversation with her father,
Melissa thought deeply about her moral and ethical
obligations and the problems that could arise if she became
a whistleblower. She knew there were protections for
whistleblowers, but she sensed that her career path could
be severely hampered if she went outside the company to
communicate this incident.
Melissa also wondered about the best path to take if she
pursued the issue internally. Her supervisor, Bradford, didn’t
support her taking any action. In fact, his comments on
Friday could be interpreted as a threat regarding his 90-day
review of her performance. If she didn’t follow his advice,
she might not be working at WWT much longer. That would
be a big disappointment to her father and to herself because
she had worked so hard to get a job there.
On the train to work Monday morning, Melissa began
to doubt herself. Maybe she did misinterpret what Tom
said in the break room. Maybe it was just a joke as Bradford
suggested. Maybe it would be easier to just let it go.
Before moving forward, Melissa felt compelled to
investigate her suspicions. Was her interpretation of the
conversation correct? Does she really have an obligation based
on the IMA Statement of Ethical Professional Practice? Is
there really a slush fund? If Melissa contacts you as a fellow
CMA, what advice would you give her about how to proceed?
Andrew Bargerstock, CPA, Ph.D., is the director of MBA
Programs at the Maharishi University of Management in
Fairfield, Iowa. He also is a member of IMA’s Cedar Rapids
Chapter. You can contact Andrew at (641) 919-4303 or
[email protected].
Ye Shi is an instructor in Business Administration at the
Maharishi University of Management. You can contact her at
(641) 980-8006 or [email protected].
VOL. 11, N O. 2, ART. 1, JUNE 2018
The Association of
Accountants and
Financial Professionals
in Business
IMA Statement of Ethical Professional Practice
Statement on Management Accounting
About IMA®
(Institute of Management Accountants)
IMA, the association of accountants and financial professionals in
business, is one of the largest and most respected associations focused
exclusively on advancing the management accounting profession.
Globally, IMA supports the profession through research, the CMA®
(Certified Management Accountant) program, continuing education,
networking, and advocacy of the highest ethical business practices.
IMA has a global network of more than 85,000 members in 140
countries and 300 professional and student chapters. Headquartered
in Montvale, N.J., USA, IMA provides localized services through its four
global regions: The Americas, Asia/Pacific, Europe, and Middle East/
India. For more information about IMA, please visit
About the IMA Statement of Ethical Professional Practice
IMA has been committed to advocating the highest standards of ethical business
practices—both for its members and the profession at large—since the organization was
founded in 1919. In the early 1980s, IMA took a bold leadership role in the area of ethics
by developing its first written code of ethics: Standards of Ethical Conduct of Management
Accountants. In 2005, in the wake of global financial scandals and an increasing need
for more direct ethical guidelines, IMA issued new guidance to better reflect the ethical
climate of the time. The result was the IMA Statement of Ethical Professional Practice,
which required each IMA member to be committed to the highest ethical behavior.
After considering the many changes in the business and regulatory environment,
including the globalization of commerce and the management accounting profession,
IMA determined to issue a revised Statement in 2017, which is published here as a
Statement on Management Accounting. More concise and simpler to understand and
apply, this updated version more fully reflects the global scope of management accounting.
It also requires IMA members to contribute to a positive ethical culture in their organization
and to place integrity of the profession above personal interests. These requirements
recognize the need for members to take an active role in ensuring their organization has
a strong, open, and positive ethical culture.
© July 2017
Institute of Management Accountants
10 Paragon Drive, Suite 1
Montvale, NJ, 07645
IMA Statement of Ethical Professional Practice
Effective July 1, 2017
Members of IMA shall behave ethically. A commitment to ethical professional practice includes
overarching principles that express our values and standards that guide member 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.
IMA members have a responsibility to comply with and uphold the standards of Competence,
Confidentiality, Integrity, and Credibility. Failure to comply may result in disciplinary a …
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