Deck 7: Managing Ethics Risks Opportunities

Question 1

The following performance component recommended by the Global Reporting Initiative relates to customer health and safety, marketing communications, and customer privacy.

A)Labor practices
B)Human rights
C)Product responsibility
D)Society
E)Customer rights

Answer 1

C

Question 2

The following need is at the top of Maslow's Hierarchy of Needs.

A)Esteem
B)Respect
C)Fulfillment
D)Safety
E)Affinity

Answer 2

C

Question 3

Auditors are mandated to assess the client's risk of financial reporting fraud. Auditing standard     SAS 99 considers the following a mandatory tool in fraud assessment.

A)Discussion and brainstorming
B)The fraud triangle
C)Interviews with management
D)The development of fraud training programs
E)All of the above

Answer 3

A

Question 4

An employee in charge of the cash register at a busy restaurant steals small sums of money at the end of the day whenever the cash in the register exceeds the sum of the day's bills. He thinks it is fine to do so because every day there are two or three customers that pay more than they should. This type of rationalization is categorized as:

A)everyone else is doing it.
B)denial of the victim.
C)condemnation of the condemners.
D)an appeal to higher loyalties.
E)entitlement.

Question 5

Which of the following is a source of risk identified by both the AICPA/CICA/CPA Canada and the Institute of Internal Auditors?

A)Environmental
B)Informational
C)Financial
D)Operational
E)All of the above

Question 6

An employee in charge of collecting tickets at the entrance of a movie theater lets her friends enter the theater without paying for tickets. She thinks it is fine to do so because the employees at the popcorn bar give free popcorn to their friends. This type of rationalization is categorized as:

A)denial of responsibility.
B)denial of the victim.
C)everyone else is doing it.
D)an appeal to higher loyalties.
E)entitlement.

Question 7

What is the most important reason sexual harassment has recently become much more important for businesspeople?

A)The #MeToo movement has gained more public support.
B)Senior executives have been fired after investigations at McDonald's and Fox News.
C)Presidential behavior has been questioned.
D)Courts have allowed harassment lawsuits to proceed.
E)High-profile cases have changed public opinion and tolerance.

Question 8

What are the two most difficult practical aspects of sustainability reporting?

A)Identifying corporate impacts
B)Measuring corporate impacts
C)Deciding on the disclosure format
D)Identifying boundaries for the report (i.e., number of years, countries, activities, etc.)
E)Avoiding legal liability for misdeeds

Question 9

An employee in charge of writing checks to suppliers in a manufacturing firm steals small sums of money every month by writing himself a check for the total of the discounts he negotiates with the company's suppliers. This type of rationalization is categorized as:

A)denial of responsibility.
B)denial of the victim.
C)condemnation of the condemners.
D)everyone else is doing it.
E)entitlement.

Question 10

What is the recommended strategy when stakeholders' potential for threat is high and the stakeholders' potential for cooperation is high?

A)Monitor
B)Involve
C)Discuss
D)Defend
E)None of the above

Question 11

The new enterprise risk management (ERM)focuses on how risks and opportunities might impact the achievement of strategic goals as well as the creation, preservation, realization, or erosion of value.  ERM involves the assessment of an organization's:

A)culture.
B)capabilities.
C)practices.
D)strategies.
E)All but one of the above

Question 12

Which of the following best describes harassment?

A)Improper behavior that is considered offensive by the victim and that the perpetrator knows is offensive
B)Improper behavior that is considered offensive by society in general and that the perpetrator knows is offensive
C)Improper behavior that is not considered offensive by the victim but that the perpetrator knows is offensive
D)Improper behavior that is considered offensive by the victim but that the perpetrator does not know is offensive
E)Improper behavior that is not considered offensive by the victim and that the perpetrator does not know is offensive

Question 13

An employee in charge of the customer service helpline urgently needs some extra cash for paying his son's hospital bills. According to the fraud triangle, this situation likely constitutes:

A)motive.
B)rationalization.
C)opportunity.
D)a and b
E)a and c

Question 14

Ethics and ethical corporate culture should play a vital role in setting:

A)the control environment.
B)risk assessment.
C)information and communication.
D)monitoring.
E)control activities.

Question 15

The disclosure of the following three performance categories is recommended by the Global Reporting Initiative.

A)Economic, environmental, and organizational
B)Environmental, financial, and social
C)Economic, organizational, and social
D)Environmental, financial, and organizational
E)Economic, environmental, and social

Question 16

Which of the following would be the least useful report of ethics risks and opportunities?

A)By hypernorm value
B)By shareholder group
C)By product or service
D)By corporate objective
E)By reputation driver

Question 17

An employee in charge of counting and depositing cash holdings at the end of the day urgently needs some extra cash to pay her son's medical bills. According to the fraud triangle, this situation likely constitutes:

A)motive/need.
B)rationalization.
C)opportunity.
D)a and b
E)a and c

Question 18

It important that enterprise risk management (ERM)and strategy setting are integrated because:

A)strategies should not be developed if the inherent risks are too high.
B)strategies should align with an organization's mission, vision, and operational risk profiles.
C)ethics risks should be considered before strategies are activated.
D)mindset risks need to be minimized.
E)All of the above

Question 19

An employee who thinks he is being treated unfairly because he is regularly working unpaid overtime urgently needs some extra cash. According to the fraud triangle, this situation likely constitutes:

A)motive.
B)rationalization.
C)opportunity.
D)a and b
E)a and c

Question 20

What is the recommended strategy when stakeholders' potential for threat is low and the stakeholders' potential for cooperation is high?

A)Monitor
B)Involve
C)Discuss
D)Defend
E)None of the above

Question 21

If you are a professional accountant employed in a firearms manufacturing corporation and your boss tells you to open a corporate bank account in the Cayman Islands where secrecy is guaranteed, what are the likely purposes of that account?

A)Payment of accounts payable
B)Tax evasion
C)Money laundering
D)Deposits of funds from banned purchasers
E)Payment of dividends

Question 22

An important difference between anticipated and unanticipated crises is that:

A)unanticipated crises are easier to control than anticipated crises.
B)unanticipated crises have a less negative reputational impact than anticipated crises.
C)anticipated crises start much earlier than unanticipated crises.
D)anticipated crises are less costly than unanticipated crises.
E)anticipated crises have a longer uncontrolled period than unanticipated crises.

Question 23

dForensic accountants require knowledge and skills beyond the levels expected of regular professional accountants in the following areas.

A)Professional skepticism
B)Ethics
C)Cybercrime
D)Loss quantification
E)Money laundering

Question 24

Crises can result in significant financial losses, but they can also result in other losses. Which of the following losses can have the worst long-run impact on a company?

A)Short-term financial loss
B)Loss of credibility with the media
C)Loss of employee morale
D)Loss of reputation
E)Loss of executive concentration.

Question 25

Most of the damage is usually done in this phase of a crisis.

A)Pre-crisis
B)Reputation restoration
C)Controlled
D)Uncontrolled
E)Post-crisis