Question 1

The fiduciary duty of the board of directors includes all of the following except for:

Accepted Answer

A) Safeguarding corporate assets 
B) Promoting shareholder interests 
C) Exercising care in carrying out their responsibilities 
D) Representing the interests of all stakeholders

Question 2

With respect to whistle blowing, the Sarbanes-Oxley Act:

Accepted Answer

A) Protects employees of publicly traded companies who provide evidence in fraud cases 
B) Confers legal protection on managers who reported wrongdoing by top executives 
C) Confers legal protection on the board of directors for fraudulent actions by management 
D) All of the above

Question 3

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

Question 4

What is an inspirational short statement on key values?

Accepted Answer

A) Code of ethics 
B) Code of conduct 
C) Code of practice 
D) Credo

Question 5

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

Question 6

Which would be an example of a company using an ethical decision making model and taking ethical actions?

Accepted Answer

A) Ford Pinto 
B) Exxon Valdez oil spill 
C) Johnson & Johnson Tylenol poisoning 
D) Chevy trucks' side-saddle gas tanks

Question 7

In putting together the best audit team for a high tech company, which of the following would be allowed under SOX and independence rules?

Accepted Answer

A) IT consultant 
B) IT auditor 
C) Tax consultant 
D) Former CFO of the company

Question 8

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) All of the above

Question 9

One of the duties of a board of directors is to protect the interests of stakeholders.Which of the following is an example of protecting such interests?

Accepted Answer

A) Back dating options for executives 
B) Deceptive business practices 
C) Off balance sheet financing 
D) Transparent financial reporting

Question 10

Each of the following is an element of fairness in accounting except for:

Accepted Answer

A) Intellectual honesty 
B) Unbiased 
C) Transparency 
D) Due care

Question 11

The Institute of Internal Auditors Code of Ethics includes each of the following principles except for:

Accepted Answer

A) Integrity 
B) Objectivity 
C) Independence 
D) Confidentiality

Question 12

In the Amgen case, one former employee, Shawn O'Brien, sued the company for:

Accepted Answer

A) Wrongful termination 
B) Fraudulent actions 
C) Discrimination 
D) All of the above

Question 13

Compare and contrast the agency and stakeholder theories of corporate governance from the perspective of those involved in and affected by managerial decision making.

Accepted Answer

The answer of Compare and contrast the agency and stakeholder...

Question 14

Agency costs refer to:

Accepted Answer

A) The costs incurred in monitoring managerial performance 
B) The costs incurred because there is information asymmetry between the corporation and outsiders 
C) The costs incurred because insiders know more about a company than do outsiders 
D) All of the above

Question 15

The 2009 Ethics Resource Center National Business Ethics Survey indicates each of the following with respect to how employees view the ethics and ethical practices of organizations they work for except for:

Accepted Answer

A) Misconduct at work has declined over the years 
B) Whistle blowing is up 
C) Ethical cultures are weaker 
D) Pressure to cut corners is lower

Question 16

In an ethical decision making model, the final step is

Accepted Answer

A) Know how to protect yourself 
B) Reflect on the decision 
C) Frame the ethical issue 
D) Determine all alternative actions

Question 17

Under the Sarbanes-Oxley Act, which of the following bodies must contain members that are 100% independent of management?

Accepted Answer

A) Board of directors 
B) Audit committee 
C) Internal auditors 
D) All of the above

Question 18

As part of a required ethics course, students were required to take an online 90 minute ethics final.Facing graduation and many pressures with starting new jobs and moving, the students worked together to complete the final.Since the essays were all closely worded the same, the instructor could determine that some sort of cheating on the ethics exam had taken place.Using ethical decision making model, what should the school, instructor and students do? Would the suggested solution be different if the school had an honor code?
The students used an egoism approach to rationalize cheating on the final.The school and the instructor have the dilemma of what to do.Although many would agree with punishment for the cheating, the dilemma is what is the goal/role of a school and course.As an educational institute, the goal is probably to educate the students.Is the cheating incident a failure of the students or the program? One solution that the students may not think of is that the cheating students would have to use ethical reasoning and ethical decision making model to justify the solution to the problem they caused.

Accepted Answer

The answer of As part of a required ethics course,...

Question 19

The Act that enables a whistleblower to receive compensation for blowing the whistle if the claims are deemed to be valid is:

Accepted Answer

A) The Sarbanes-Oxley Act 
B) The Foreign Corrupt Practices Act 
C) The Private Securities Litigation Reform Act 
D) The Federal False Claims Act

Question 20

An ethical corporate culture can best be established by:

Accepted Answer

A) Setting a proper tone at the top 
B) Establishing strong internal controls 
C) Having an effective internal audit function 
D) All of the above

Exam 3: Corporate Governance and Ethical Management