Exam 3: Organizational Ethics and Corporate Governance

Compensation of executives has soared over the last forty plus years to more than 271 times the pay for average workers. Remedies to rein in executive compensation include all but:

The 2013 Ethics Resource Center National Business Ethics Survey indicates each of the following results with respect to how employees view the ethics and ethical practices of organizations they work for except:

In September 2015, Volkswagen disclosed it had sold hundreds of thousands of diesel cars in the U.S. with software specifically designed to evade government pollution tests. The company disclosed that the irregularities on diesel-emission readings extend to some 11 million vehicles globally. The company has admitted that it rigged diesel vehicles using a "defeat device" to pass lab tests, even though they emitted as much as 40 times the legal limit of pollutants on the road. In November 2015, VW set a November 30 deadline for staff with knowledge about its diesel emissions test cheating to come forward. Workers who get in touch with internal investigators by then would be exempt from dismissal. VW said it would not sack workers for what they might reveal, but they might be transferred to other duties. "Employees covered by collective bargaining agreements who get in touch promptly, but no later than November 30, 2015... and... may rest assured that the company will waive consequences under labor law such as the termination of employment, and will not make any claim for damages," according to the letter sent to workers. Evaluate VW's actions from an ethical perspective.

The relationship between the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy and rule of law is known as:

In the Pinto case, Ford relied on which approaches to ethical reasoning to decide on a course of action with respect to the faulty gas tank placement:

Fraud can be defined as:

Under certain situations, internal accountants are eligible to become Dodd-Frank whistleblowers. Which of the following is not one of those situations?

Tommy Hubbs is the new controller of XYZ Corporation. Recently, Hubbs was approached by Carol Franks, the CFO, and told in no uncertain terms to record $100,000 in revenue at the end of 2015 even though the sale was not made until January 3, 2016. Describe Hubbs's ethical responsibilities in this matter if he is a CPA?

Explain how an ethical workplace culture can be best established.

To ensure audit committee independence, the committee should meet separately with each of the following groups except:

The primary ethical issue in United Thermostatic Controls is:

The difference between occupational and financial statement fraud is:

What causes auditors to make unethical decisions? Are these factors different across different types of auditors?

Section 301 of the Sarbanes-Oxley Act requires

Kyle and Luis were friends since rooming together in college ten years ago. They were both finance and accounting double majors. They were each other's weddings and their wives were also good friends. After college Kyle went on to get his CPA license and ultimately went to work as controller, and then CFO, of a publicly held hardware chain, King's Hardware. King's had twenty-five retail outlets in a five state region and looking at acquiring a hardware chain (Rex's) of six retail outlets in a state that King's wants to get a presence in. Luis worked for a bank after college but then changed to being a real estate investor. Luis was the one who gave Kyle the tip on Rex's being open to a takeover offer; Luis was the realtor for all of Rex's store locations. Kyle hired a CPA firm to do due diligence for the acquisition, including updated appraisals of Rex's store locations and valuations of contents of each store. Kyle had the report. The problem was that the report is showing that Luis was a 10% owner of Rex's; would be paid a 15% commission by Rex's upon a successful buy-out; and, most troubling of all, the value of Rex's locations and inventory was overstated on Rex's books by 50%. Kyle is considering who to tell, how, when. Most of all he is feeling betrayed by Luis. 1. What are the ethical issues?. 2. What would you do next and why? Consider the following in your response. What do you need to say, to whom, and in what sequence? What are the reasons and rationalizations you are likely to hear from those who would try to detract you from your goal? How can you counteract those pressures? What is your powerful and persuasive response to these arguments? To whom should you make them? When and in what context?

Which of the following is NOT one of the audit committee's responsibilities?

Which of the following was the most frequent anti-fraud control identified in the 2014 ACFE Global Fraud Survey?

Section 302 of the Sarbanes-Oxley Act requires that management:

Which of the following is NOT a component of an effective internal control environment in COSO Internal Control - Integrated Framework?

The seven signs of a pending ethical collapse include all but: