Question 1

SOX contained sections with regard to the auditors and/or audit committee that were designed to:

Accepted Answer

A) increase the independence of management. 
B) increase the financial literacy of audit committee members. 
C) limit the conflicts of interest related to the services an auditor can perform. 
D) restrict the ability of auditors to serve on the audit committee. 
E) All of the above 
A) increase the independence of management. 
B) increase the financial literacy of audit committee members. 
C) limit the conflicts of interest related to the services an auditor can perform. 
D) restrict the ability of auditors to serve on the audit committee. 
E) All of the above B,C

Question 2

In 1984, Edward Freeman published an article on stakeholder theory. Which of the following is not true?

Accepted Answer

A) A firm needs the support of its stakeholders to enhance the firm's reputation. 
B) Stakeholder theory took years to mature. 
C) Stakeholder theory is not a useful framework for those interested in governance. 
D) Firms need stakeholders to achieve their corporate objectives. 
E) Stakeholder theory occurred at the same time as the rise in social and corporate activism. 
A) A firm needs the support of its stakeholders to enhance the firm's reputation. 
B) Stakeholder theory took years to mature. 
C) Stakeholder theory is not a useful framework for those interested in governance. 
D) Firms need stakeholders to achieve their corporate objectives. 
E) Stakeholder theory occurred at the same time as the rise in social and corporate activism. C

Question 3

Who among the following demonstrated extraordinary hubris (the arrogant belief that rules are for other people but not for us)?

Accepted Answer

A) Kenneth Lay 
B) Bernie Ebbers 
C) Arthur Andersen 
D) Scott Sullivan 
E) All of the above 
A) Kenneth Lay 
B) Bernie Ebbers 
C) Arthur Andersen 
D) Scott Sullivan 
E) All of the above A,B

Question 4

The Dodd-Frank Wall Street Reform and Consumer Protection Act was created after the subprime lending fiasco to protect consumers from deceptive practices related to:

Accepted Answer

A) mortgages. 
B) credit cards. 
C) cars. 
D) financial derivatives. 
E) All of the above 
A) mortgages. 
B) credit cards. 
C) cars. 
D) financial derivatives. 
E) All of the above

Question 5

The overall requirement of the Internal Revenue Service Circular 230 is to ensure that tax professionals:

Accepted Answer

A) know their clients. 
B) always develop tax plans for their clients. 
C) make tax planning suggestions that, even if they don't have a chance of success, will save the client some money in the short term. 
D) never develop tax shelters. 
E) only be professional accountants. 
A) know their clients. 
B) always develop tax plans for their clients. 
C) make tax planning suggestions that, even if they don't have a chance of success, will save the client some money in the short term. 
D) never develop tax shelters. 
E) only be professional accountants.

Question 6

Deutsche Bank closed down a business segment producing roughly 20% of its business because:

Accepted Answer

A) it was an unprofitable business segment for banks in general. 
B) the leader of that business segment was disgraced. 
C) there were damning reports from the German regulator. 
D) there was negligent strategic thinking. 
E) the culture in that business segment was beyond remediation. 
A) it was an unprofitable business segment for banks in general. 
B) the leader of that business segment was disgraced. 
C) there were damning reports from the German regulator. 
D) there was negligent strategic thinking. 
E) the culture in that business segment was beyond remediation.

Question 7

The QuadrigaCX cryptocurrency exchange went bankrupt because:

Accepted Answer

A) the founder and operator died. 
B) the founder fired all professional accounting and control personnel. 
C) Canada had no regulatory framework to oversee such exchanges. 
D) the founder dissipated most of the exchange's funds. 
E) cryptocurrency is a very risky investment. 
A) the founder and operator died. 
B) the founder fired all professional accounting and control personnel. 
C) Canada had no regulatory framework to oversee such exchanges. 
D) the founder dissipated most of the exchange's funds. 
E) cryptocurrency is a very risky investment.

Question 8

Large drug and chemical manufacturers have been fined huge sums for harmful products that they marketed aggressively and that:

Accepted Answer

A) were seriously harmful to humans. 
B) were priced at absurdly high margins of profit. 
C) involved a very high risk of addiction. 
D) have generated over 2,000 lawsuits. 
E) All of the above 
A) were seriously harmful to humans. 
B) were priced at absurdly high margins of profit. 
C) involved a very high risk of addiction. 
D) have generated over 2,000 lawsuits. 
E) All of the above

Question 9

The U.S. Federal Sentencing Guidelines were introduced in 1991 to:

Accepted Answer

A) help judges formulate sentences. 
B) avoid sentences that were too light. 
C) signal potential sentences to executives and directors. 
D) encourage executives and directors to avoid environmental damage. 
E) All of the above 
A) help judges formulate sentences. 
B) avoid sentences that were too light. 
C) signal potential sentences to executives and directors. 
D) encourage executives and directors to avoid environmental damage. 
E) All of the above

Question 10

The U.S. Internal Revenue Service (IRS)implemented Circular 230 to remedy problems found with regard to the marketing of tax shelters thought to:

Accepted Answer

A) have no other purpose than reducing taxes. 
B) have lower than 50% chance of success if challenged by the IRS. 
C) not be in accordance with the client's needs. 
D) create fictitious losses. 
E) All of the above 
A) have no other purpose than reducing taxes. 
B) have lower than 50% chance of success if challenged by the IRS. 
C) not be in accordance with the client's needs. 
D) create fictitious losses. 
E) All of the above

Question 11

Due diligence programs developed to reduce penalties levied under the U.S. Federal Sentencing Guidelines for environmental harm did not include:

Accepted Answer

A) awareness programs for employees. 
B) guidelines for employees. 
C) compliance oversight by corporate officials. 
D) rewards for noncompliance. 
E) encouragement for whistleblowers. 
A) awareness programs for employees. 
B) guidelines for employees. 
C) compliance oversight by corporate officials. 
D) rewards for noncompliance. 
E) encouragement for whistleblowers.

Question 12

Ralph Nader contributed to the lack of credibility of corporations by exposing:

Accepted Answer

A) their excessive bonus schemes. 
B) their greed. 
C) their poor car safety. 
D) their poor environmental record. 
E) the "seller beware" attitude of toy manufacturers. 
A) their excessive bonus schemes. 
B) their greed. 
C) their poor car safety. 
D) their poor environmental record. 
E) the "seller beware" attitude of toy manufacturers.

Question 13

Which was the largest fraud or bankruptcy leading to the crisis of investor confidence in 2002?

Accepted Answer

A) Enron 
B) Global Crossing 
C) WorldCom 
D) HIH Insurance 
E) Xerox 
A) Enron 
B) Global Crossing 
C) WorldCom 
D) HIH Insurance 
E) Xerox

Question 14

Which of the following is not a sign of an ethical collapse within an organization, according to Marianne Jennings, author of The Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns in Companies ?

Accepted Answer

A) Pressure to meet financial goals 
B) Hubris 
C) Nepotism, favoritism, and hiring sycophants 
D) An open and candid organizational culture 
E) A weak board of directors 
A) Pressure to meet financial goals 
B) Hubris 
C) Nepotism, favoritism, and hiring sycophants 
D) An open and candid organizational culture 
E) A weak board of directors

Question 15

At least two major accounting bodies have begun to reimage the accounting profession because of the following.

Accepted Answer

A) A lack of basic accounting knowledge 
B) Faulty basic auditing practices 
C) Poor risk assessment practices 
D) A lack of competency with modern tools 
E) Three of the above 
A) A lack of basic accounting knowledge 
B) Faulty basic auditing practices 
C) Poor risk assessment practices 
D) A lack of competency with modern tools 
E) Three of the above

Question 16

The U.S. government created the Troubled Asset Relief Program (TARP)to:

Accepted Answer

A) bail out investors in U.S. financial firms and institutions. 
B) avoid a worldwide financial crisis. 
C) stimulate the U.S. economy. 
D) resolve the financial crisis in Iceland. 
E) make a profit on the ultimate sale assets bought at a low value. 
A) bail out investors in U.S. financial firms and institutions. 
B) avoid a worldwide financial crisis. 
C) stimulate the U.S. economy. 
D) resolve the financial crisis in Iceland. 
E) make a profit on the ultimate sale assets bought at a low value.

Question 17

The crisis in investor confidence in 2002 was caused by:

Accepted Answer

A) a lack of integrity of business leaders. 
B) the manipulation of financial results. 
C) the boards of directors that did not provide proper oversight. 
D) the findings of alert auditors. 
E) All of the above 
A) a lack of integrity of business leaders. 
B) the manipulation of financial results. 
C) the boards of directors that did not provide proper oversight. 
D) the findings of alert auditors. 
E) All of the above

Question 18

The Carillion plc bankruptcy was important because:

Accepted Answer

A) it had major infrastructure construction and operations projects all over the world. 
B) it left tens of thousands of active and pensioned workers without financial support. 
C) it attracted the largest number of short sellers on the London Stock Exchange. 
D) it went bankrupt within six months of receiving a clean audit report. 
E) All of the above 
A) it had major infrastructure construction and operations projects all over the world. 
B) it left tens of thousands of active and pensioned workers without financial support. 
C) it attracted the largest number of short sellers on the London Stock Exchange. 
D) it went bankrupt within six months of receiving a clean audit report. 
E) All of the above

Question 19

Why didn't investors caught in the subprime lending crisis take earlier note of the risks inherent in investments known as collateralized debt obligations (CDOs)?

Accepted Answer

A) Investors were driven by greed and the desire for high returns. 
B) Banks were selling and buying them. 
C) The risks were buried in complex, jargon-oriented documents. 
D) The risks were diversified over many mortgages. 
E) Only three of the above 
A) Investors were driven by greed and the desire for high returns. 
B) Banks were selling and buying them. 
C) The risks were buried in complex, jargon-oriented documents. 
D) The risks were diversified over many mortgages. 
E) Only three of the above

Question 20

A Ponzi scheme, such as the one Bernie Madoff ran, is: hard to hide forever.

Accepted Answer

A) a card game. 
B) a sound investment scheme. 
C) a scheme to improve the environment. 
D) hard to hide forever. 
E) None of the above 
A) a card game. 
B) a sound investment scheme. 
C) a scheme to improve the environment. 
D) hard to hide forever. 
E) None of the above

SOX contained sections with regard to the auditors and/or audit committee that were designed to:

In 1984, Edward Freeman published an article on stakeholder theory. Which of the following is not true?

Who among the following demonstrated extraordinary hubris (the arrogant belief that rules are for other people but not for us)?

The Dodd-Frank Wall Street Reform and Consumer Protection Act was created after the subprime lending fiasco to protect consumers from deceptive practices related to:

The overall requirement of the Internal Revenue Service Circular 230 is to ensure that tax professionals:

Deutsche Bank closed down a business segment producing roughly 20% of its business because:

The QuadrigaCX cryptocurrency exchange went bankrupt because:

Large drug and chemical manufacturers have been fined huge sums for harmful products that they marketed aggressively and that:

The U.S. Federal Sentencing Guidelines were introduced in 1991 to:

The U.S. Internal Revenue Service (IRS)implemented Circular 230 to remedy problems found with regard to the marketing of tax shelters thought to:

Due diligence programs developed to reduce penalties levied under the U.S. Federal Sentencing Guidelines for environmental harm did not include:

Ralph Nader contributed to the lack of credibility of corporations by exposing:

Which was the largest fraud or bankruptcy leading to the crisis of investor confidence in 2002?

Which of the following is not a sign of an ethical collapse within an organization, according to Marianne Jennings, author of The Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns in Companies ?

At least two major accounting bodies have begun to reimage the accounting profession because of the following.

The U.S. government created the Troubled Asset Relief Program (TARP)to:

The crisis in investor confidence in 2002 was caused by:

The Carillion plc bankruptcy was important because:

Why didn't investors caught in the subprime lending crisis take earlier note of the risks inherent in investments known as collateralized debt obligations (CDOs)?

A Ponzi scheme, such as the one Bernie Madoff ran, is: hard to hide forever.

Ethics Expectations

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

Exam 2: Ethics Governance Scandals

SOX contained sections with regard to the auditors and/or audit committee that were designed to:

In 1984, Edward Freeman published an article on stakeholder theory. Which of the following is not true?

Who among the following demonstrated extraordinary hubris (the arrogant belief that rules are for other people but not for us)?

The Dodd-Frank Wall Street Reform and Consumer Protection Act was created after the subprime lending fiasco to protect consumers from deceptive practices related to:

The overall requirement of the Internal Revenue Service Circular 230 is to ensure that tax professionals:

Deutsche Bank closed down a business segment producing roughly 20% of its business because:

The QuadrigaCX cryptocurrency exchange went bankrupt because:

Large drug and chemical manufacturers have been fined huge sums for harmful products that they marketed aggressively and that:

The U.S. Federal Sentencing Guidelines were introduced in 1991 to:

The U.S. Internal Revenue Service (IRS)implemented Circular 230 to remedy problems found with regard to the marketing of tax shelters thought to:

Due diligence programs developed to reduce penalties levied under the U.S. Federal Sentencing Guidelines for environmental harm did not include:

Ralph Nader contributed to the lack of credibility of corporations by exposing:

Which was the largest fraud or bankruptcy leading to the crisis of investor confidence in 2002?

Which of the following is not a sign of an ethical collapse within an organization, according to Marianne Jennings, author of The Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns in Companies ?

At least two major accounting bodies have begun to reimage the accounting profession because of the following.

The U.S. government created the Troubled Asset Relief Program (TARP)to:

The crisis in investor confidence in 2002 was caused by:

The Carillion plc bankruptcy was important because:

Why didn't investors caught in the subprime lending crisis take earlier note of the risks inherent in investments known as collateralized debt obligations (CDOs)?

A Ponzi scheme, such as the one Bernie Madoff ran, is: hard to hide forever.

Ethics Expectations

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