Question 1

Fraud can be defined as:

Accepted Answer

A) A deliberate misrepresentation to gain an advantage over another party 
B) A cover-up of a mistake made in the financial statements 
C) An error in preparing financial statements 
D) All of the above 
A) A deliberate misrepresentation to gain an advantage over another party 
B) A cover-up of a mistake made in the financial statements 
C) An error in preparing financial statements 
D) All of the above A

Question 2

Which of the following is NOT an element of the corporate governance system?

Accepted Answer

A) Board of directors 
B) Internal controls 
C) Executive compensation policies 
D) Monitoring by top management 
A) Board of directors 
B) Internal controls 
C) Executive compensation policies 
D) Monitoring by top management D

Question 3

The Ethical Dissonance Model helps to evaluate:

Accepted Answer

A) Whether the organization sets an ethical tone at the top 
B) Whether the organization has ethical leadership 
C) Whether the organization has a whistle-blowing process 
D) Whether the organization's ethics aligns with individual ethics 
A) Whether the organization sets an ethical tone at the top 
B) Whether the organization has ethical leadership 
C) Whether the organization has a whistle-blowing process 
D) Whether the organization's ethics aligns with individual ethics D

Question 4

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

Accepted Answer

A) Assess the company's internal controls 
B) Certify the financial statements 
C) Disclose all executive compensation 
D) Blow the whistle on corporate wrongdoing 
A) Assess the company's internal controls 
B) Certify the financial statements 
C) Disclose all executive compensation 
D) Blow the whistle on corporate wrongdoing

Question 5

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.Hubbs contacts a good friend who used to be the controller of XYZ and is told the environment of the company is one of loyalty at all costs.His friend shares that he left the company because of differences on numerous accounting issues.The friend advises Hubbs to let it go this one time to show he is a team player.
Assume Hubbs decides not to go along with Franks' dictum.Prepare an outline to help him give voice to his values and attempt to change hearts and minds of those in XYZ that might block proper accounting.
Use the following to guide students on what is expected of them in answering this question.
As you read the case,think about the following series of questions for the protagonist to address after identifying the right thing to do including:
•How can they get it done effectively and efficiently?
•What do they need to say,to whom,and in what sequence?
•What will the objections or push-back be and,then?
•What would they say next? What data and examples do they need?

Accepted Answer

To assist you in the process of analyzin

Question 6

Explain how an ethical workplace culture can be best established.

Accepted Answer

Corporate culture is the shared beliefs

Question 7

Which of the following is NOT an element of internal control over financial reporting?

Accepted Answer

A) Maintaining accurate financial records 
B) Providing reasonable assurance that receipts and expenditures are recorded based on proper authorization by management 
C) Developing a code of conduct and whistle-blowing procedures 
D) Providing reasonable assurance that the financial statements are prepared in accordance with generally accepted accounting principles 
A) Maintaining accurate financial records 
B) Providing reasonable assurance that receipts and expenditures are recorded based on proper authorization by management 
C) Developing a code of conduct and whistle-blowing procedures 
D) Providing reasonable assurance that the financial statements are prepared in accordance with generally accepted accounting principles

Question 8

Imagine you just went to your local pharmacy and were told that the cost of a life-saving drug was $22,500 for 30 tablets to treat AIDS or another infectious disease.Well,if you needed the drug Daraprim that is what you would have to pay according to the CEO of the company that manufactured it.Turing Pharmaceuticals purchased the right to Daraprim in August 2015 and CEO Martin Shkreli decided a price increase of 5500% was needed.Evaluate the ethics and corporate responsibility in Shkreli's decision to charge the $22,500 for 30 tablets.

Accepted Answer

An increase from $13.50 per dose to $750

Question 9

The business judgment rule refers to:

Accepted Answer

A) Faithfulness to one's obligations and duties 
B) Honesty of purpose and caring 
C) Decision making under uncertainty 
D) Acting with due care and good faith 
A) Faithfulness to one's obligations and duties 
B) Honesty of purpose and caring 
C) Decision making under uncertainty 
D) Acting with due care and good faith

Question 10

An example of revenue overstatement is:

Accepted Answer

A) Manipulating reserves 
B) Recording gross,rather than net,revenue 
C) Reporting cost of sales as a non-operating expense 
D) Deferring revenue 
A) Manipulating reserves 
B) Recording gross,rather than net,revenue 
C) Reporting cost of sales as a non-operating expense 
D) Deferring revenue

Question 11

The term disgorgement means:

Accepted Answer

A) To give up one's meal after eating 
B) To return profits earned illegally 
C) To return ill-gotten gains 
D) To give up one's board position after a fraud incident 
A) To give up one's meal after eating 
B) To return profits earned illegally 
C) To return ill-gotten gains 
D) To give up one's board position after a fraud incident

Question 12

The reporting requirements for fraud are detailed in Section 10A of the Securities Exchange Act of 1934.Which of the following steps are NOT part of a prescribed process that should be followed in deciding whether to report fraud?

Accepted Answer

A) Determine who is responsible for the fraud. 
B) Determine whether the violations have a material effect,quantitatively or qualitatively,on the financial statements. 
C) Determine whether appropriate remedial action has been taken. 
D) Determine whether reporting to the SEC is necessary. 
A) Determine who is responsible for the fraud. 
B) Determine whether the violations have a material effect,quantitatively or qualitatively,on the financial statements. 
C) Determine whether appropriate remedial action has been taken. 
D) Determine whether reporting to the SEC is necessary.

Question 13

The stakeholder view emphasizes the obligations of management to:

Accepted Answer

A) The shareholders 
B) The shareholders and creditors 
C) All parties impacted by corporate decisions in a significant way 
D) The board of directors 
A) The shareholders 
B) The shareholders and creditors 
C) All parties impacted by corporate decisions in a significant way 
D) The board of directors

Question 14

What is the main fiduciary duty of the board of directors?

Accepted Answer

A) Maximize profits for the company 
B) Monitor executive compensation 
C) Safeguard the interests of the company's stakeholders 
D) Allow high risk accounting practices 
A) Maximize profits for the company 
B) Monitor executive compensation 
C) Safeguard the interests of the company's stakeholders 
D) Allow high risk accounting practices

Question 15

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:

Accepted Answer

A) Code of ethics. 
B) Corporate leadership. 
C) Corporate responsibility. 
D) Corporate governance. 
A) Code of ethics. 
B) Corporate leadership. 
C) Corporate responsibility. 
D) Corporate governance.

Question 16

The Olympus case was unique from a corporate governance perspective because it deals with:

Accepted Answer

A) A board of directors that was completely under the influence of the CEO 
B) Cultural differences between Japanese management and western style of management 
C) Cultural differences between U.S.and non-U.S.companies 
D) A company that consistently overrides its internal controls and commits fraud 
A) A board of directors that was completely under the influence of the CEO 
B) Cultural differences between Japanese management and western style of management 
C) Cultural differences between U.S.and non-U.S.companies 
D) A company that consistently overrides its internal controls and commits fraud

Question 17

The difference between occupational and financial statement fraud is:

Accepted Answer

A) Occupational fraud is generally committed by employees 
B) Occupational fraud is generally committed by external auditors 
C) Financial statement fraud occurs either by accident or deliberation 
D) Financial statement fraud always starts with non-executive decisions 
A) Occupational fraud is generally committed by employees 
B) Occupational fraud is generally committed by external auditors 
C) Financial statement fraud occurs either by accident or deliberation 
D) Financial statement fraud always starts with non-executive decisions

Question 18

Research by Miceli and Near indicates that:

Accepted Answer

A) Whistleblowers hope their speaking out achieves the correction of an organization wrongdoing 
B) Whistleblowers hope those who violate the rules are prosecuted 
C) Whistleblowers are motivated to report under Dodd-Frank to receive an award 
D) Whistleblowers always blow the whistle because of altruistic reasons 
A) Whistleblowers hope their speaking out achieves the correction of an organization wrongdoing 
B) Whistleblowers hope those who violate the rules are prosecuted 
C) Whistleblowers are motivated to report under Dodd-Frank to receive an award 
D) Whistleblowers always blow the whistle because of altruistic reasons

Question 19

A troubling result of the 2013 National Business Ethics Survey is:

Accepted Answer

A) Increased witnessing of misconduct in the workplace 
B) Decline in pressure to compromise ethics 
C) Percentage of employees retaliated against for whistle-blowing is a problem 
D) Lessening of observed misconduct 
A) Increased witnessing of misconduct in the workplace 
B) Decline in pressure to compromise ethics 
C) Percentage of employees retaliated against for whistle-blowing is a problem 
D) Lessening of observed misconduct

Question 20

Agency theory can best be described as:

Accepted Answer

A) The relationship between top management and the board of directors 
B) The relationship between the board of directors and shareholders 
C) The relationship between top management,the board of directors,and shareholders 
D) The relationship between the external auditors and top management 
A) The relationship between top management and the board of directors 
B) The relationship between the board of directors and shareholders 
C) The relationship between top management,the board of directors,and shareholders 
D) The relationship between the external auditors and top management

Fraud can be defined as:

Which of the following is NOT an element of the corporate governance system?

The Ethical Dissonance Model helps to evaluate:

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

Explain how an ethical workplace culture can be best established.

Which of the following is NOT an element of internal control over financial reporting?

The business judgment rule refers to:

An example of revenue overstatement is:

The term disgorgement means:

The reporting requirements for fraud are detailed in Section 10A of the Securities Exchange Act of 1934.Which of the following steps are NOT part of a prescribed process that should be followed in deciding whether to report fraud?

The stakeholder view emphasizes the obligations of management to:

What is the main fiduciary duty of the board of directors?

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:

The Olympus case was unique from a corporate governance perspective because it deals with:

The difference between occupational and financial statement fraud is:

Research by Miceli and Near indicates that:

A troubling result of the 2013 National Business Ethics Survey is:

Agency theory can best be described as:

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Ethics and Professional Judgment in Accounting

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Earnings Management

Ethical Leadership and Decision-Making in Accounting

Filters

Exam 3: Organizational Ethics and Corporate Governance

Fraud can be defined as:

Which of the following is NOT an element of the corporate governance system?

The Ethical Dissonance Model helps to evaluate:

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

Explain how an ethical workplace culture can be best established.

Which of the following is NOT an element of internal control over financial reporting?

The business judgment rule refers to:

An example of revenue overstatement is:

The term disgorgement means:

The reporting requirements for fraud are detailed in Section 10A of the Securities Exchange Act of 1934.Which of the following steps are NOT part of a prescribed process that should be followed in deciding whether to report fraud?

The stakeholder view emphasizes the obligations of management to:

What is the main fiduciary duty of the board of directors?

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:

The Olympus case was unique from a corporate governance perspective because it deals with:

The difference between occupational and financial statement fraud is:

Research by Miceli and Near indicates that:

A troubling result of the 2013 National Business Ethics Survey is:

Agency theory can best be described as:

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Ethics and Professional Judgment in Accounting

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Earnings Management

Ethical Leadership and Decision-Making in Accounting

Filters