Multiple Choice Questions & 1 Critical Thinking Question

Question 1

Frequently, decision makers are subject to unreasonable expectations and unrealistic deadlines; this is an example of:

conforming to an unethical corporate culture.

failure to rank stakeholder interests.

focusing only on legalities.

failure to identify all stakeholder groups.

conflicts of interests.

Question 2

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

None of the options mentioned

the credibility gap.

the stewardship gap.

the audit gap.

the expectations gap.

Question 3

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

marketing oriented.

value management oriented.

ethics oriented.

risk management oriented.

profit management oriented.

Question 4

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

their poor car safety.

their excessive bonus schemes.

their poor environmental record.

the "seller beware" attitude of toy manufacturers.

their greed.

Question 5

This approach focuses on coming up with an innovative solution to an ethical dilemma

Moral imagination

Distributive justice

Deontology

Utilitarianism

Virtue ethics

Question 6

The QuadrigaCX cryptocurrency exchange went bankrupt because:

the founder and operator died.

the founder dissipated most of the exchange's funds.

the founder fired all professional accounting and control personnel.

Canada had no regulatory framework to oversee such exchanges.

cryptocurrency is a very risky investment.

Question 7

Individuals may be ethical because of:

emotional attachments to other people.

None of the options mentioned

religious concerns.

emotional attachments to other people.

enlightened self-interest.

Question 8

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

encouragement for whistleblowers.

awareness programs for employees.

guidelines for employees.

rewards for noncompliance.

compliance oversight by corporate officials.

Question 9

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

Police forces are taking women's complaints of bullying seriously.

Court cases against high-ranking executives and celebrities are becoming successful.

None of the above

Major companies are investigating and firing executives accused of sexual misbehavior with employees.

Sexual violence against women has stopped.

Question 10

The first resource for guidance when a businessperson or a professional accountant faces an ethical problem should be:

All of the above

commonly accepted philosophical approaches.

corporate and professional codes of conduct.

ethical decision-making frameworks.

commonly accepted social norms.

Question 11

Two weaknesses of the following approach are that (1) it is difficult to determine who demonstrates integrity in the workplace and (2) it is difficult to choose between compassion and not betraying somebody's trust.

Virtue ethics

Utilitarianism

Distributive justice

Moral imagination

Deontology

Question 12

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

It confirms that corporations are to benefit all stakeholders.

It changes what most executives have thought.

It confirms that profit maximization is the appropriate sole goal of corporations.

It confirms that corporations are accountable only to shareholders.

Question 13

The International Federation of Accountants (IFAC):

has an impact on professional accounting practices in less than 20 countries around the world.

has the authority to discipline professional accountants.

is not relevant to professional accountants working in industry.

was created to develop global accounting, auditing, and ethics standards for professional accountants.

is not relevant to professional accountants in most industrialized countries.

Question 14

A collateralized debt obligation (CDO):

protects an investor in the event that the issuer of the mortgage defaults on the contract.

was outlawed with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

is an insurance policy that any investor can purchase.

is a bond that is secured by a portfolio of mortgages.

acts as a hedge against changes in interest rates.

Question 15

Give an example of behaviour that might be unethical even though ''everyone is doing it."

Question 16

Not reporting environmental issues is an example of:

a lack of transparency.

a lack of integrity.

All

a lack of accuracy.

None

Question 17

If managers use moral imagination to determine ethical alternatives, the decisions need to be good for:

society.

the firm.

All

the individual.

a and b only

Question 18

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

Whether it provides a net benefit to society, is fair to most stakeholders, and is right

Whether it provides a net benefit to society and whether it is legal

Whether it provides a net benefit to society, is fair to all stakeholders, and is legal

Whether it provides a net benefit to society, is fair to all stakeholders, is right, and demonstrates the virtues expected

Whether it is fair to most stakeholders and is right

Question 19

The following four standards make up the modified moral standards approach.

Legal, moral rights, justice, and virtues

Utilitarian, individual rights, fairness, and virtues

Utilitarian, moral rights, justice, and virtues

Legal, individual rights, justice, and virtues

Utilitarian, individual rights, justice, and virtues

Question 20

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

Global Crossing

WorldCom

Xerox

HIH Insurance

Enron

Question 21

Which of the following is not one of the 5 questions in Graham Tucker's original approach to ethical decision making?

Is it profitable?

Does it demonstrate the virtues expected?

Is it fair?

Is it legal?

Is it right?

Question 22

Effective crisis management could represent:

None of the above

All of the above

an opportunity to change employees' perspectives on risk.

an opportunity to enhance a company's reputation.

an opportunity to avoid costs.

Question 23

As a result of the spectacular stock market crash in 1929, the government enacted the Securities Act of 1933, the Securities Act of 1934, and:

none of the options given here

The Investment Advisers Act.

The Glass-Steagall Act.

All the options given here

The Gramm-Leach-Bliley Act.

Question 24

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

Stakeholder theory occurred at the same time as the rise in social and corporate activism.

Firms need stakeholders to achieve their corporate objectives.

A firm needs the support of its stakeholders to enhance the firm's reputation.

Stakeholder theory is not a useful framework for those interested in governance.

Stakeholder theory took years to mature.

Question 25

The costs of environmental cleanups absorbed by downstream individuals, companies, or municipalities are referred to as:

externalities.

future impacts.

surrogates.

collateral damages.

ethical costs.

Question 26

Completing steps in the following order provides a sound basis for challenging a proposed decision.

Identify a proper ethical decision framework, identify facts and stakeholders, and assess the impact of the proposed action.

Rank stakeholders and their interests, identify a proper ethical decision framework, and assess the impact of the proposed action.

Rank stakeholders and their interests, identify facts and stakeholders, and assess the impact of the proposed action.

Identify facts and stakeholders, rank stakeholders and their interests, and assess the impact of the proposed action.

Identify a proper ethical decision framework, rank stakeholders and their interests, and assess the impact of the proposed action.

Question 27

This philosopher argued that self-interest motivates people to form peaceful civil societies.

John Rawls

Thomas Hobbes

Adam Smith

Jeremy Bentham

John Locke

Question 28

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?

A weak board of directors

Nepotism, favoritism, and hiring sycophants

An open and candid organizational culture

Hubris

Pressure to meet financial goals

Question 29

This approach, a variant of utilitarianism, considers an action to be ethically good if it will probably produce a greater balance of good over evil.

Consequentialism

Virtue ethics

Sub-utilitarianism

Act utilitarianism

Active utilitarianism

Question 30

This approach incorporates the expected future impacts of a decision into the analysis.

Consequentialism

Risk-benefit analysis

Virtue ethics

All of the above

Cost-benefit analysis

Question 31

Minority rights may be violated under this approach.

Moral imagination

Deontology

Virtue ethics

Utilitarianism

Distributive justice

Question 32

Which of the following is not covered under the Sarbanes-Oxley Act of 2002 (SOX)?

The responsibilities of auditors

The responsibilities of shareholders

The responsibilities of the board of directors

Conflicts of interest

The responsibilities of management

Question 33

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

were seriously harmful to humans.

have generated over 2,000 lawsuits.

involved a very high risk of addiction.

All of the options mentioned

were priced at absurdly high margins of profit.

Question 34

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

avoid sentences that were too light.

encourage executives and directors to avoid environmental damage.

All

signal potential sentences to executives and directors.

help judges formulate sentences.

Question 35

From a stakeholder point of view, which of the following must be satisfied for a decision to be considered ethical?

All of the options must be satisfied for a decision to be considered ethical.

The distribution of benefits and burdens should be fair.

The decision should result in more benefits than costs.

The decision should not offend the rights of any other stakeholders.

The decision should demonstrate virtues reasonably expected.

Question 36

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

Righteousness

Deontology

Consequentialism

Duty ethics

Virtue ethics

Question 37

This approach presupposes that happiness, utility, pleasure, pain, and anguish can be quantified.

Utilitarianism

Virtue ethics

Deontology

Distributive justice

Moral imagination

Question 38

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

Code of conduct

An ethics risk management program

Efficient oversight by the company's board of directors

Workplace ethics

Tone at the top (Ethical leadership)

Question 39

The crisis in investor confidence in 2002 was caused by:

the boards of directors that did not provide proper oversight.

a lack of integrity of business leaders.

the manipulation of financial results.

All

the findings of alert auditors.

Question 40

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:

mortgages.

cars.

credit cards.

All

financial derivatives.

Question 41

The following approach does not specifically incorporate a thorough review of the motivation for the decisions involved, or the virtues or character traits expected:

none

The modified 5-question approach

All of the options except none

The modified Pastin approach

The modified moral standards approach

Question 42

Ethical dilemmas arise when:

norms and values are in conflict.

there is only one alternative course of action available.

norms and values are not in conflict.

there are several theories of ethical decision making.

All of the options here

Question 43

A value that is almost universally respected by stakeholder groups is:

a value norm.

a super norm.

a general norm.

a hypernorm.

an alfa norm.

Question 44

This theory argues that the best ethical alternative is the one that will produce the greatest amount of happiness to the largest number of stakeholders.

Distributive justice

Deontology

Virtue ethics

Moral imagination

Utilitarianism

Question 45

A difficulty in applying this approach is identifying all possible stakeholders impacted by the decision.

Distributive justice

Procedural justice/consequentialism

Virtue ethics

Deontology

Utilitarianism