Ethical Obligations and Decision Making in Accounting Text and Cases 5th edition Steven M. Mintz, Roselyn E. Morris - Solutions

We all know people who say, “Don’t bother me with the facts. I’ve already made up my mind.” How might such an attitude influence judgment tendencies of auditors?
It appears Grace has fallen victim to which of the following?a. Judgment triggersb. Availability tendencyc. Mindset tendencyd. Groupthink tendency
1. Apply the steps in Exhibit 4.3, Ethical Conflicts and Compliance with the Rules of Conduct, and analyze whether the relationships described in this case create a conflict of interests and, if so, what safeguards should be implemented to mitigate the threat now and in the future?2. What, if
Grace Sloan explained that the audit team pressured her to let certain matters go. By doing so, Grace succumbed to groupthink. Groupthink has a home in which of the following?a. Stage 3 of the Rest modelb. None of these are correctc. Stage 3 of the Thorne modeld. Stage 3 of the Kohlberg model
Do you believe the U.S. Supreme Court decision in Digital Realty Trust, Inc. v. Somers and the decision in Erhart v. BOFI Holdings were the "right" decisions? Explain the basis for your answer.
Is it a positive result that 39.1 percent of occupational fraud is initially detected by a "tip"? Explain why or why not.
When financial results aren’t what they seemed to be – and a company is forced to issue material financial restatements –should it be required to develop policies to claw back incentive pay and bonuses that were awarded to senior managers on the basis of rosier outcomes? Use ethical reasoning
Review the facts related to the reporting of financial statement fraud by Tony Menendez at Halliburton in the context of the factors identified in the Anti-Fraud Collaboration study. Discuss the similarities between the two with respect to Menendez's experiences and explain how an effective
While on a lunch break following a dispute with a supervisor, an employee updated her Facebook status to an expletive and the name of the employer’s company. Several coworkers “liked” her status. She later posted that the employer didn’t appreciate its employees; no coworkers responded to
At the time, revenue recognition required a firm to include ___________.a. Persuasive evidence of an arrangementb. Receipt of a purchase order from the buyer’s budget and the Purchasing Officec. The seller’s price, which is fixed or determinabled. Delivery, which is assured by the FOB seller
How can a board of directors know whether the culture of the organization supports the right kind of risk taking?
Halliburton provided a flow chart on revenue recognition known as the ______________.a. Channel Stuffing Treeb. Bill-and-Hold Decision Treec. Mark-to-Market Treed. Revenue Allocation Tree
What are the roles and responsibilities of independent members of the board of directors with respect to risk management and corporate governance?
Menendez was excluded from a meeting on accounting for a potential joint venture arrangement. This is a violation of which of the following?a. Dodd-Frankb. Sarbanes-Oxleyc. The RICO Racketeer Influenced and Corrupt Organizations Actd. The CPA Code of Professional Conduct
Explain how internal auditors’ sensitivity to ethical dilemmas might be influenced by corporate governance mechanisms.
Halliburton was violating revenue recognition rules by recognizing revenue _____________.a. Before assembling the productb. Before delivering the productc. Before the risks of ownership had passed to the buyerd. All of these are correct.
A tobashi scheme involves which of the following?a. Selling investments and buying them back disguised as advisory feesb. Using special purpose entities (SPEs), a la Enron, to offload losses to another entityc. Issuing high yield debt via junk bonds to obtain funds to cover the lossesd. Creating
Olympus attempted to cover up the losses by writing investments off as ___________.a. Market-to-market trading securitiesb. Goodwill impairmentsc. Discontinued operationsd. Deferred taxes due to countries outside Japan
Perhaps the most unusual thing about this case is that _______________.a. The fraud went undetected for so longb. Three sets of different external auditors were involved during the fraudc. The CEO turned whistleblowerd. The fine was relatively light: only $92 million to settle with institutional
Organizational culture can influence moral behavior through the “stacked deck” phenomenon. Explain how this might work and lead to a defense of subordinates’ behavior we might call “They made me do it”.
Natalie’s next step should probably be to _____________.a. Continue employment as though nothing has happenedb. Report to the external auditorsc. Report to the SECd. Seek legal advice
1. What are the main arguments that Jerry and Sharon will need to counter? That is, what are the reasons and rationalizations they will need to address?2. What is at stake should they not convince Bender to issue a revised 10Q?3. What levers do Jerry and Sharon have available to them? Include in
In deciding what to do next, Natalie as a CPA should consider the ____________.a.Ethical Responsibilities of a CPA Professional Code of Conduct 102-4b. Ethical Responsibilities of a CPA under AICPA Professional Code Conduct 201-1c. Ethical Responsibilities of a CPA Professional Code of Conduct
Explain what you think each of the following statements means in the context of moral development.a. How far are you willing to go to do the right thing?b. How much are you willing to give up to do what you believe is right?c. We may say that we would blow the whistle on client wrongdoing but what
According to the 2013 National Business Ethics Survey, 60 percent of workplace misconduct involved someone with managerial authority. Roughly 25 percent of observed misconduct involved senior managers. Why are high-level employees more likely to behave unethically?
If Natalie Garson assumes someone else will report the apparent authorized transfer to Vic Construction, she would be subject to _____________.a. The whistleblower effectb. The tone at the top effectc. The bystander effectd. The Sherron Watkins effect, named for the whistleblower at Enron
1. What role did cultural relativism and situational ethics play in the Olympus fraud? Explain.2. Describe the shortcomings in corporate culture at Olympus?3. Did Michael Woodford violate his ethical and/or legal responsibilities as CEO of Olympus? Use the U.S. model of corporate governance to
Explain the role of integrity in workplace ethics.
Whistleblowers who meet the criteria are eligible to receive an award based on what was collected as a result of the monetary sanctions. This can vary from ___________.a. 1 to 10 percentb. 10 to 30 percentc. 15 to 35 percentd. 1 to 50 percent, depending on the magnitude of the fraud
1. To whom do John and Laskey owe their ultimate responsibility? Explain.2. If John were to agree not to report this embezzlement to the police or disclose it in the annual report and prospectus, would he be violating the integrity or due care rule in the AICPA Code of Professional Conduct? What
In an interview on Philosophy Talk, a national syndicated radio program, Edward Snowden, the National Security Agency whistleblower, was asked whether he sees himself as a hero or a traitor, considering the various depictions presented by the government and media. He answered by discussing the
To encourage various groups to come forward and report fraud, Dodd–Frank extended whistle-blowing privileges and rewards to which of the following?a. Internal auditorsb. External auditorsc. The CEOd. All of these are correct.
1. Put on "Your Thinking Cap" and explain how the provisions of the Sarbanes-Oxley Act might have helped to detect the fraud.2. What anti-fraud controls might have helped detect the fraud. Why?3. Assume you are in Shane O’Hara’s position. What would you do next and why? Consider
Explain the following statements: (1) It has been argued that an organization that does not support those that whistle blow because of violation of professional standards is indicative of a failure of organizational ethics; (2) It is a distinguishing mark of actions labeled whistleblowing that the
A whistleblower is defined as a person who provides information to the _________ about a violation of the securities law.a. PCAOBb. Audit committee of the firm involvedc. SECd. External audit firm
Burchard’s Ethical Dissonance Cycle Model suggests this was a failure of which of the following?a. Low Organization Ethics, Low Individual Ethics Low Lowb. High Organizational Ethics, Low Individual Ethics High Lowc. Low Organizational Ethics, High Individual Ethics Low Highd. None of these
1. Explain the following concepts in the context of the case and how it relates to individual and organizational factors that contribute to fraud:Rationalizations for unethical actions.Stakeholder effects.Ethical dissonance.Sometimes good people do bad things.2. Assume you are the director of
What are the ethical lessons to be learned from the scandal at Wells Fargo?
One might say that each group was operating at which ethical level?a. Rest’s notion of Law and Order Stage 4b. Kohlberg’s Moral Sensitivityc. Thorne’s Moral Development Leading to Ethical Motivationd. Kohlberg’s Stage Two
The Sadhu was handed off from one group to another due to what?a. The lack of an organizational ethical cultureb. The lack of Koh and Boo’s ethical climatec. The lack of a common corporate cultured. All of these choices are correct.
Explain how an overconfidence bias might influence an auditor’s judgment about the proper balance sheet value of inventory.
Select one of the rationalizations for Enron’s actions identified by Andy Fastow in the chapter-opening and explain how you would counteract that statement by emphasizing its ethical deficiencies.
One expression in particular seems to sum up why the accounting frauds at companies such as Enron, WorldCom, and HealthSouth were allowed to persist for so long: “If I Do It, I Must Do It Again.” Explain what is meant by this statement in the context of ethical decision making.
Wald, Plotkin, and Sugofsky would do well to follow which model of ethical reasoning?a. Kohlbergb. Restc. Kidderd. Thorne
By suggesting this is operating cash flow, Wald is operating under:a. Instrumental virtue.b. Rest’s idea of the character.c. Kohlberg’s idea of Law and Order.d. The GVV idea of Locus of Loyalty.
The purchase of the motors is a(n):a. Operating cash outflow.b. Investing cash outflow.c. Financing cash outflow.d. Non-cash transaction.
1. Explain the role of cognitive shortcomings in the WorldCom fraud and how social and organizational pressures influenced Betty Vinson's actions.2. The SEC action against Vinson was deemed "appropriate and in the public interest." How was the public interest affected by what Vinson did and
If Jackson Daniels decides to do something, what is the one element missing in the chain of communication thus far?a. The failure to report to Internal Auditb. The failure to report to the Comptrollerc. The failure to report to Cwervod. The failure to document the admission in writing
1. Identify which biases and or stereotypes might exacerbate the type of behavior described in this case.2. What responsibility does a college or university have in insuring all students feel safe and welcome at their institutions? Answer this question using Rights Theory and theories of Justice.3.
What is the likely result of Pete’s “zero tolerance of employees making mistakes”?a. Fewer mistakes by employees.b. Implementation of the Ethical Decision Making Model.c. No need for rationalizing after the fact.d. More mistakes are likely to be made.
Jonathan Walker is probably failing which of the Rest Stages?a. Sensitivityb. Judgmentc. Motivationd. Character
1. Explain how incrementalism might influence Ricardo's position with respect to the not so subtle statement by Norman Baitz.“I’m sorry, Lucy. That’s the client's position,” Ricardo said. “I just don’t know if I can go along with it, Ricardo,” Lucy replied.“I know. I agree with
Do you believe all sexual relationships should be forbidden in the workplace? Use ethical reasoning to support your view.
This is a Giving Voice to Values case because:a. Alex is demonstrating instrumental virtue.b. Gregory is demonstrating moral intensity.c. Michael is demonstrating sensitivity.d. Michael is rationalizing after the fact.
1. Why do you think this type of behavior was allowed to go on for nearly thirty years?2. What biases do you think may have played a role in the decisions made by both victims and others who were aware of Weinstein’s crimes?3. What responsibility does the Weinstein board have to the victims? What
In 2016, an incident of price gouging raised issues similar to those in the Heinz and the Drug discussion in this chapter. Turing Pharmaceuticals purchased the right to the prescription drug Diaprim, a life-saving drug that treats toxoplasmosis, an infection that affects people with compromised
Michael has ignored which of the Kohlberg Stages of Moral Development?a. Sensitivityb. Moral Intensityc. Intellectual Virtued. Social Contract
1. Should you discuss the matter first with Troy before responding to Joyce? Explain.2. Assume Kristen is a Certified Management Accountant and member of the Institute of Management Accountants. As such, she falls under The IMA Statement of Ethical and Professional Practice. Discuss how these
Back in August 2017, a leaked memo by Google employee James Damore alleged that the company was discriminating in its hiring practices based on race or gender. He claimed that Google was "pressing individual managers to increase diversity" and is "using race or gender" to decide which workers are
Giving Voice to Values links ethical intent and ethical action to which of the following?a. Kohlberg’s Stages of Moral Developmentb. Rest Four Stage Modelc. Jones Moral Intensity Modeld. Libby and Thorne Study on Virtue
On November 21, 2017, a story broke that New Yorker reporter Ronan Farrow had alleged that Harvey Weinstein used lengthy nondisclosure agreements attached to hefty monetary settlements to prevent accusers from coming forward with reports of his alleged sexual activities. Do you think it would be
Barbara is reminded that “Jessica is a stickler for keeping to the budget.” At what level is Jessica operating with this point of view that potentially impedes implementing proper audit procedures?a. Fairness to Othersb. Law and Orderc. Satisfying One’s Own Interestd. Social Contract
How do theories about the world, other people, and ourselves influence ethical decision making?
Barbara is responding to which of the Kohlberg stages?a. Social Contractb. Fairness to Othersc. Avoidance of Punishmentd. Both Social Contract and Fairness to Others
Why do you think good people sometimes do bad things? Explain.
Diane is operating at which of the Kohlberg stages?a. Social Contractb. Fairness to Othersc. Satisfying One’s Own Needsd. Universal Ethical Principles
Mark Twain once said, “If you tell the truth, you don’t have to remember anything.” Explain what you think Twain meant by this statement and how it addresses one’s character.
Assume you are preparing for an interview with the director of personnel. Given the following questions, craft a response that you would feel comfortable giving for each one. Describe an experience in the workplace when your attitudes and beliefs were ethically challenged? Use a personal
In the discussion of loyalty in this chapter, a statement is made that “your ethical obligation is to report what you have observed to your supervisor and let her take the appropriate action.” We point out that you may want to take your concerns to others. The IMA Statement of Ethical
Do you think a CPA can justify allowing the unethical behavior of a supervisor by claiming, “It’s not my job to police the behavior of others?”
CPAs who make false statements in advertisements violate the AICPA rules of conduct. Do you think it would be ethical for a CPA to hire a person to advertise in this manner for them? Why or why not?
Using the concept of justice that holds equals should be treated equally, unequal unequally, discuss how an auditor would assess the equality of interests in the financial reporting process.
Do you agree with our decision to omit Rand’s Rational Egoism as a basis for making ethical judgments in accounting? Explain.
Socrates said that the best way to solve a problem is by thinking. Do you agree? Is thinking enough to solve most problems that arise in accounting? Explain.
Gloria Hernandez’s situation is analogous to which real-world figure?a. Sherron Watkinsb. Betty Vinsonc. Lea Fastowd. Dave Meyer
For years, the Baseball Hall of Fame has officially steered clear of the question as to how voters should handle the candidacies of players connected to performance-enhancing drugs. On November 21, 2017, Hall of Famer Joe Morgan pleaded with voters to reject players who failed drug tests, admitted
The question of whether to capitalize or expense in this situation most closely parallels the case involving which company?a. Enronb. Tycoc. ZZZZ Bestd. WorldCom
The 2016 Deloitte Millennial Survey of 7,500 college educated, full-time employees from 29 countries found that the most significant factor influencing respondents' decision-making at work was their personal values and morals. Seventy-percent believe their personal values are shared by the
Jose and Emily would probably have to report this incident under which Principles section of the AICPA Code of Conduct?a. Public Interestb. Integrityc. Objectivity and Independenced. Due Care
If Jose and Emily decide to report this incident to the school, they would be operating under which Pillar of Character?a. Caringb. Respectc. Responsibilityd. Fairness
Do you think it is ethical for a prospective employer to investigate your social media footprint in making a hiring decision? What about monitoring social networking activities of employees while on the job. Use ethical reasoning in answering these questions.
The manager seems to be failing in regard to which Pillar of Character?a. Caringb. Respectc. Responsibilityd. Fairness
1. Do you think it was right for Cyndie to tell the Japanese tourist that “her coworker had to go home early because he was sick?”2. Cyndie decided to speak with Jeffrey. From an ethical perspective, do you think Cyndie made the right decision as opposed to speaking directly with either Sarah
One explanation about rights is that “there is a difference between what we have the right to do and what is the right thing to do.” Explain what you think is meant by this statement. Do you believe that if someone attacks your credibility on social media that gives you the right to attack them?
Giles probably violated which of the IMA Standards?a. Competenceb. Confidentialityc. Integrityd. Credibility
Ethics in accounting is based on which of the following?a. Respectb. Fairnessc. Responsibilityd. Integrity
1. What values are most important to you in deciding on a course of action? Why?2. Who are the stakeholders in this case and how might they be affected by your course of action?3. What would you do and why, assuming your approach will be based on the application of the ethical reasoning methods
Is there a difference between cheating on a math test, pocketing an extra $10 from the change given to you at a restaurant, and using someone else’s ID to get a drink at a bar?
Herb Morris should probably make his decision about what to do regarding Giles and Regas using what theory?a. Deontologyb. Justicec. Virtued. Teleology
Is it ever appropriate to lie to someone? Explain why or why not using ethical reasoning. Give one example of when you believe lying might be justified.
One might say Giles was acting on which ethical theory?a. Utilitarianismb. Deontologyc. Virtued. Teleology/egoism
1. What are the loyalty obligations of both parties in this case?2. Assume that you were in Gloria Hernandez’s position. What would motivate you to speak up and act or to stay silent? Would it make a difference if Harrison promised this was a one-time request?3. What would you do and why?Gloria
In respect to Herb Morris as a Managing Partner, Giles and Regas’s failure to adhere to firm rules most closely breaks which of the Josephson Pillars?a. Trustworthinessb. Citizenshipc. Respectd. Responsibility
1. Did Ed commit an act discreditable to the profession? Explain.2. Does the case have any bearing on Ed's ability to provide competent services to his client and serve the public interest? Why or why not?3. What should Ed’s attorney say in defense of his client?4. Should state board of
The students were most likely operating under which moral philosophy?a. Deontology or equal respect to all personsb. Hobbes and Locke’s theories of rightsc. Rawls’ theory of justiced. A subset of teleology
We could best examine the actions of the students in this case by examining student _______.a. Ethicsb. Moralsc. Norms and valuesd. Laws
1. What potential consequences are there for Veronica, the internship program, the other employers, the university, and other students should Veronica not honor her commitment?2. Analyze Veronica’s actions using the Six Pillars of Character. What do Veronica’s actions tell you about her
Students who engage in cheating usually rationalize their behavior via what?a. Ethical relativismb. Situation ethicsc. Cultural valuesd. Responsibility
A common ethical dilemma used to distinguish between philosophical reasoning methods is the following. Imagine that you are standing on a footbridge spanning some trolley tracks. You see that a runaway trolley is threatening to kill five people. Standing next to you, in between the oncoming trolley
Students who engaged in cheating would have probably violated which of the following Six Pillars of Character more than the others?a. Trustworthinessb. Respectc. Responsibilityd. Fairness

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Ethical Obligations and Decision Making in Accounting Text and Cases 5th edition Steven M. Mintz, Roselyn E. Morris - Solutions

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