Question 1

Ethical investors in a corporation take the view that:

Accepted Answer

A)  The corporation should maximize profits
B)  The corporation's primary concern should be its impact on the environment
C)  Their investment should make a reasonable return
D)  The corporation should operate in an ethical manner
E)  Both c and dF) A) and B)
G) A) and C)

Question 2

The following are examples of ethics risks faced by employees:

Accepted Answer

A)  Honesty and integrity
B)  Fairness and compassion
C)  Integrity and responsibility
D)  Fairness and integrity
E)  Responsibility and honestyF) B) and E)
G) A) and B)

Question 3

The following would be a key control function of the Board of Directors:

Accepted Answer

A)  Set guidance and boundaries
B)  Appoint CEO
C)  Approve the sale of company's assets
D)  Decide on the company's auditor
E)  All of the aboveF) B) and C)
G) A) and E)

Question 4

This philosophical approach requires that an ethical decision depends upon the duty, rights, and justice involved:

Accepted Answer

A)  Consequentialism
B)  Virtue ethics
C)  Duty ethics
D)  Righteousness
E)  DeontologyF) B) and D)
G) B) and E)

Question 5

The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as:

Accepted Answer

A)  Credibility gap
B)  Expectations gap
C)  Audit gap
D)  Stewardship gap
E)  None of the aboveF) D) and E)
G) B) and E)

Question 6

Which of the following is not a trend described in Chapter 1 as having an impact on the ethics of business?

Accepted Answer

A)  Directors' legal liability
B)  Management's stated intention to protect reputation
C)  Auditors' legal liability
D)  Management's assertions to shareholders on the adequacy of internal controls
E)  Management's stated intention to manage riskF) B) and E)
G) A) and D)

Question 7

A value that is almost universally respected by stakeholder groups is:

Accepted Answer

A)  Super norm
B)  Alfa norm
C)  Value norm
D)  Hypernorm
E)  General normF) D) and E)
G) C) and D)

Question 8

Incomplete disclosure of the company's revenue recognition policy is an example of:

Accepted Answer

A)  Lack of transparency
B)  Lack of integrity
C)  Lack of accuracy
D)  All of the above
E)  None of the aboveF) A) and B)
G) All of the above

Question 9

The Moral Standards Approach focuses on the following dimensions of the impact of a proposed action:

Accepted Answer

A)  Net benefit to society, fair to all stakeholders, whether it is right
B)  Net benefit to society and whether it is legal
C)  Net benefit to society, fair to all stakeholders, whether it is legal
D)  Fair to most stakeholders and whether it is right
E)  Net benefit to society, fair to most stakeholders, whether it is rightF) C) and E)
G) A) and B)

Question 10

This organization has developed an international code of conduct for professional accountant:

Accepted Answer

A)  International Accounting Standards Board
B)  European Federation of Accountants
C)  Financial Accounting Standards Board
D)  Public Accounting Oversight Board
E)  International Federation of AccountantsF) A) and C)
G) C) and D) E

Question 11

Ethical corporate behavior is expected to lead to:

Accepted Answer

A)  Higher profitability in the short-term
B)  Higher profitability both in the short-term and long-term
C)  Lower profitability in the long-term
D)  Higher profitability in the long-term
E)  Lower profitability both in the short-term and long-termF) A) and C)
G) B) and E)

Question 12

Not reporting environmental issues is an example of:

Accepted Answer

A)  Lack of transparency
B)  Lack of integrity
C)  Lack of accuracy
D)  All of the above
E)  None of the aboveF) B) and E)
G) A) and E)

Question 13

Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts?

Accepted Answer

A)  Corporate annual report
B)  Corporate social responsibility report
C)  Corporate quarterly report
D)  Corporate stakeholder report
E)  Corporate ethics committee reportF) C) and E)
G) A) and E) B

Question 14

All of these are essential elements required to develop a culture of integrity EXCEPT:

Accepted Answer

A)  Clear communication
B)  Reinforcement of ethics
C)  A personal commitment by senior management
D)  The appointment of an ethics officer
E)  All of the aboveF) All of the above
G) C) and D)

Question 15

Effective crisis management could represent:

Accepted Answer

A)  An opportunity to avoid costs
B)  An opportunity to change employee's perspectives on risk
C)  An opportunity to enhance the company's reputation
D)  All of the above
E)  None of the aboveF) A) and B)
G) A) and C)

Question 16

Which of the following are NOT hypernorms?

Accepted Answer

A)  Honesty
B)  Credibility
C)  Fairness
D)  Integrity
E)  PredictabilityF) A) and B)
G) A) and E)

Question 17

The following is a fundamental factor in having an effective ethical corporate culture:

Accepted Answer

A)  Tone at the top
B)  Efficient oversight by the company's Board of Directors
C)  Workplace ethics
D)  Code of conduct
E)  Ethics risk management programsF) B) and D)
G) B) and C)

Question 18

Which of these risks caused a 25% or more drop in share value between 1993 and 1998?

Accepted Answer

A)  Strategic
B)  Operational
C)  Financial
D)  Hazard
E)  EthicsF) A) and C)
G) All of the above

Question 19

Professional Accountants, in their fiduciary role, owe their primary loyalty to:

Accepted Answer

A)  The accounting profession
B)  The client
C)  The general public
D)  Government regulations
E)  All of the aboveF) A) and B)
G) A) and C)

Question 20

Since the mid-1990s, both management and auditors have become increasingly:

Accepted Answer

A)  Profit management oriented
B)  Ethics oriented
C)  Value management oriented
D)  Risk management oriented
E)  Marketing orientedF) None of the above
G) A) and B) D,B

Exam 1: Ethics Expectations

Ethical investors in a corporation take the view that:

Correct AnswerverifiedShow Answer

The following are examples of ethics risks faced by employees:

Correct AnswerverifiedShow Answer

The following would be a key control function of the Board of Directors:

Correct AnswerverifiedShow Answer

This philosophical approach requires that an ethical decision depends upon the duty, rights, and justice involved:

Correct AnswerverifiedShow Answer

The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as:

Correct AnswerverifiedShow Answer

Which of the following is not a trend described in Chapter 1 as having an impact on the ethics of business?

Correct AnswerverifiedShow Answer

A value that is almost universally respected by stakeholder groups is:

Correct AnswerverifiedShow Answer

Incomplete disclosure of the company's revenue recognition policy is an example of:

Correct AnswerverifiedShow Answer

The Moral Standards Approach focuses on the following dimensions of the impact of a proposed action:

Correct AnswerverifiedShow Answer

This organization has developed an international code of conduct for professional accountant:

Correct AnswerverifiedE

Ethical corporate behavior is expected to lead to:

Correct AnswerverifiedShow Answer

Not reporting environmental issues is an example of:

Correct AnswerverifiedShow Answer

Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts?

Correct AnswerverifiedB

All of these are essential elements required to develop a culture of integrity EXCEPT:

Correct AnswerverifiedShow Answer

Effective crisis management could represent:

Correct AnswerverifiedShow Answer

Which of the following are NOT hypernorms?

Correct AnswerverifiedShow Answer

The following is a fundamental factor in having an effective ethical corporate culture:

Correct AnswerverifiedShow Answer

Which of these risks caused a 25% or more drop in share value between 1993 and 1998?

Correct AnswerverifiedShow Answer

Professional Accountants, in their fiduciary role, owe their primary loyalty to:

Correct AnswerverifiedShow Answer

Since the mid-1990s, both management and auditors have become increasingly:

Correct AnswerverifiedD,B

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E

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B

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D,B