Question 1

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 risk 
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 risk C

Question 2

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

Accepted Answer

A) Whether it provides a net benefit to society, is fair to all stakeholders, is right, and demonstrates the virtues expected 
B) Whether it provides a net benefit to society and whether it is legal 
C) Whether it provides a net benefit to society, is fair to all stakeholders, and is legal 
D) Whether it is fair to most stakeholders and is right 
E) Whether it provides a net benefit to society, is fair to most stakeholders, and is right 
A) Whether it provides a net benefit to society, is fair to all stakeholders, is right, and demonstrates the virtues expected 
B) Whether it provides a net benefit to society and whether it is legal 
C) Whether it provides a net benefit to society, is fair to all stakeholders, and is legal 
D) Whether it is fair to most stakeholders and is right 
E) Whether it provides a net benefit to society, is fair to most stakeholders, and is right A

Question 3

Companies attempt to manage the risk of something happening that will have a negative or positive impact on the company's objectives, such as:

Accepted Answer

A) credit risks. 
B) litigation risks. 
C) reputation risks. 
D) ethics risks. 
E) All of the above 
A) credit risks. 
B) litigation risks. 
C) reputation risks. 
D) ethics risks. 
E) All of the above E

Question 4

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

Accepted Answer

A) Consequentialism 
B) Virtue ethics 
C) Duty ethics 
D) Righteousness 
E) Deontology 
A) Consequentialism 
B) Virtue ethics 
C) Duty ethics 
D) Righteousness 
E) Deontology

Question 5

The following is a fundamental factor for having an effective ethical corporate culture.

Accepted Answer

A) Tone at the top (Ethical leadership) 
B) Efficient oversight by the company's board of directors 
C) Workplace ethics 
D) Code of conduct 
E) An ethics risk management program 
A) Tone at the top (Ethical leadership) 
B) Efficient oversight by the company's board of directors 
C) Workplace ethics 
D) Code of conduct 
E) An ethics risk management program

Question 6

Ethical corporate behavior is expected to lead to:

Accepted Answer

A) higher profitability in the short term. 
B) higher profitability in both the short term and the long term. 
C) lower profitability in the long term. 
D) higher profitability in the long term. 
E) lower profitability in both the short term and the long term. 
A) higher profitability in the short term. 
B) higher profitability in both the short term and the long term. 
C) lower profitability in the long term. 
D) higher profitability in the long term. 
E) lower profitability in both the short term and the long term.

Question 7

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) the credibility gap. 
B) the expectations gap. 
C) the audit gap. 
D) the stewardship gap. 
E) None of the above 
A) the credibility gap. 
B) the expectations gap. 
C) the audit gap. 
D) the stewardship gap. 
E) None of the above

Question 8

NOCLAR rules or standards are important because they:

Accepted Answer

A) will cause business to observe No Carbon Required practices. 
B) will cause executives to be less aggressive. 
C) will cause professional accountants to violate employer confidences. 
D) will cause professional accountants to report nonsustainable practices of clients. 
E) None of the above 
A) will cause business to observe No Carbon Required practices. 
B) will cause executives to be less aggressive. 
C) will cause professional accountants to violate employer confidences. 
D) will cause professional accountants to report nonsustainable practices of clients. 
E) None of the above

Question 9

Most large corporations do not consider these risks in a broad and comprehensive way.

Accepted Answer

A) Operational risks 
B) Reputational risks 
C) Credit risks 
D) Market risks 
E) Ethics risks 
A) Operational risks 
B) Reputational risks 
C) Credit risks 
D) Market risks 
E) Ethics risks

Question 10

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 above 
A) the accounting profession. 
B) the client. 
C) the general public. 
D) government regulations. 
E) All of the above

Question 11

Examining the interests of stakeholders is probably required for:

Accepted Answer

A) high short-term profits. 
B) optimal medium- and longer-term profits. 
C) continuing support from stakeholder groups. 
D) effective risk management. 
E) All of the above 
A) high short-term profits. 
B) optimal medium- and longer-term profits. 
C) continuing support from stakeholder groups. 
D) effective risk management. 
E) All of the above

Question 12

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

Accepted Answer

A) A corporate annual report 
B) A corporate social responsibility report 
C) A corporate quarterly report 
D) A corporate stakeholder report 
E) A corporate ethics committee report 
A) A corporate annual report 
B) A corporate social responsibility report 
C) A corporate quarterly report 
D) A corporate stakeholder report 
E) A corporate ethics committee report

Question 13

The International Federation of Accountants (IFAC):

Accepted Answer

A) is not relevant to professional accountants in most industrialized countries. 
B) is not relevant to professional accountants working in industry. 
C) was created to develop global accounting, auditing, and ethics standards for professional accountants. 
D) has the authority to discipline professional accountants. 
E) has an impact on professional accounting practices in less than 20 countries around the world. 
A) is not relevant to professional accountants in most industrialized countries. 
B) is not relevant to professional accountants working in industry. 
C) was created to develop global accounting, auditing, and ethics standards for professional accountants. 
D) has the authority to discipline professional accountants. 
E) has an impact on professional accounting practices in less than 20 countries around the world.

Question 14

The August 2019 Business Roundtable Statement on the Purpose of a Corporation is important because:

Accepted Answer

A) It confirms that profit maximization is the appropriate sole goal of corporations. 
B) It confirms that corporations are accountable only to shareholders. 
C) It confirms that corporations are to benefit all stakeholders. 
D) It changes what most executives have thought. 
E) None of the above 
A) It confirms that profit maximization is the appropriate sole goal of corporations. 
B) It confirms that corporations are accountable only to shareholders. 
C) It confirms that corporations are to benefit all stakeholders. 
D) It changes what most executives have thought. 
E) None of the above

Question 15

This organization is developing an international code of conduct for professional accountants.

Accepted Answer

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

Question 16

Nonfinancial measures of performance have become increasingly popular because they:

Accepted Answer

A) are better measures of performance than traditional financial measures. 
B) are easier to understand than traditional financial measures. 
C) are easier to compute than traditional financial measures. 
D) are less susceptible to manipulation than traditional financial measures. 
E) All of the above 
A) are better measures of performance than traditional financial measures. 
B) are easier to understand than traditional financial measures. 
C) are easier to compute than traditional financial measures. 
D) are less susceptible to manipulation than traditional financial measures. 
E) All of the above

Question 17

How do we know that the #MeToo movement has been successful?

Accepted Answer

A) Sexual violence against women has stopped. 
B) Police forces are taking women's complaints of bullying seriously. 
C) Court cases against high-ranking executives and celebrities are becoming successful. 
D) Major companies are investigating and firing executives accused of sexual misbehavior with employees. 
E) None of the above 
A) Sexual violence against women has stopped. 
B) Police forces are taking women's complaints of bullying seriously. 
C) Court cases against high-ranking executives and celebrities are becoming successful. 
D) Major companies are investigating and firing executives accused of sexual misbehavior with employees. 
E) None of the above

Question 18

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 oriented. 
A) profit management oriented. 
B) ethics oriented. 
C) value management oriented. 
D) risk management oriented. 
E) marketing oriented.

Question 19

The following are determinants of reputation.

Accepted Answer

A) Trustworthiness and responsibility 
B) Credibility, responsibility, and relevance 
C) Responsibility and impartiality 
D) Relevance and impartiality 
E) Relevance, credibility, and responsibility 
A) Trustworthiness and responsibility 
B) Credibility, responsibility, and relevance 
C) Responsibility and impartiality 
D) Relevance and impartiality 
E) Relevance, credibility, and responsibility

Question 20

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

Accepted Answer

A) a lack of transparency. 
B) a lack of integrity. 
C) a lack of accuracy. 
D) All of the above 
E) None of the above 
A) a lack of transparency. 
B) a lack of integrity. 
C) a lack of accuracy. 
D) All of the above 
E) None of the above

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

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

Companies attempt to manage the risk of something happening that will have a negative or positive impact on the company's objectives, such as:

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

The following is a fundamental factor for having an effective ethical corporate culture.

Ethical corporate behavior is expected to lead to:

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

NOCLAR rules or standards are important because they:

Most large corporations do not consider these risks in a broad and comprehensive way.

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

Examining the interests of stakeholders is probably required for:

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

The International Federation of Accountants (IFAC):

The August 2019 Business Roundtable Statement on the Purpose of a Corporation is important because:

This organization is developing an international code of conduct for professional accountants.

Nonfinancial measures of performance have become increasingly popular because they:

How do we know that the #MeToo movement has been successful?

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

The following are determinants of reputation.

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

Ethics Governance Scandals

Ethical Behaviorphilosophers Contributions

Practical Ethical Decision Making

Corporate Ethical Governance Accountability

Professional Accounting in the Public Interest

Managing Ethics Risks Opportunities

Subprime Lending Fiascoethics Issues

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Exam 1: Ethics Expectations

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

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

Companies attempt to manage the risk of something happening that will have a negative or positive impact on the company's objectives, such as:

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

The following is a fundamental factor for having an effective ethical corporate culture.

Ethical corporate behavior is expected to lead to:

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

NOCLAR rules or standards are important because they:

Most large corporations do not consider these risks in a broad and comprehensive way.

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

Examining the interests of stakeholders is probably required for:

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

The International Federation of Accountants (IFAC):

The August 2019 Business Roundtable Statement on the Purpose of a Corporation is important because:

This organization is developing an international code of conduct for professional accountants.

Nonfinancial measures of performance have become increasingly popular because they:

How do we know that the #MeToo movement has been successful?

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

The following are determinants of reputation.

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

Ethics Governance Scandals

Ethical Behaviorphilosophers Contributions

Practical Ethical Decision Making

Corporate Ethical Governance Accountability

Professional Accounting in the Public Interest

Managing Ethics Risks Opportunities

Subprime Lending Fiascoethics Issues

Filters