Deck 9: Managing and Controlling Ethics Programs

Question 1

A management system that focuses on all the elements that contribute to organizational performance and success, including financial, customer, market, and internal processes is defined as the

A)Global Reporting Initiative
B)process controls
C)ethics scoreboard
D)Balanced Scorecard
E)triple bottom line

Answer 1

D

Question 2

Which of the following is not a step in the ethics auditing process?

A)Secure commitment of top executives and directors.
B)Review organizational mission, goals, values and policies, and define ethical priorities.
C)Report the results to the U.S. Sentencing Commission.
D)Collect and analyze relevant information.
E)Verify the results.

Answer 2

C

Question 3

_________ include management's commitment to the ethics program and the methods or system for ethics evaluation.

A)Shared values
B)Formal controls
C)Financial controls
D)Process controls
E)Output controls

Answer 3

D

Question 4

What is a risk of ethics auditing?

A)It could offend stakeholders.
B)It could uncover a serious ethical problem.
C)It could violate industry best practices.
D)It is not as comprehensive as a social audit.
E)It is unlikely to identify new risk areas.

Question 5

A(n) _____ is a tool that companies can employ to identify and measure their ethical commitment to stakeholders.

A)ethics audit
B)social audit
C)financial audit
D)performance audit
E)external audit

Question 6

The process of verifying the results of an audit should involve standard procedures that control the _____ of the information.

A)completeness
B)effectiveness and efficiency
C)reliability and validity
D)independence
E)veracity

Question 7

Which of the following is a possible unintended consequence of an organization focusing more on ethics planning than on implementation?

A)Employees may come to view unethical conduct as acceptable behavior.
B)The government will implement its own audits.
C)The ethics program will never be created.
D)Employees will become dissatisfied with their jobs.
E)The implementation process will incur large costs for the organization.

Question 8

During which of the following steps of the ethics auditing process does an organization identify the tools or methods for measuring progress in improving employees' ethical decisions and conduct?

A)Secure commitment of top managers and directors.
B)Establish a committee to oversee the audit.
C)Define the scope of the audit.
D)Collect and analyze relevant information.
E)Verify the results.

Question 9

Under the _____, CEOs and CFOs may be criminally prosecuted if they knowingly certify misleading financial statements.

A)Sherman Antitrust Act
B)Ethical Compliance Act
C)Robinson-Patman Act
D)Sarbanes-Oxley Act
E)Dodd-Frank Act

Question 10

_____ are a primary stakeholder group and should be included in the ethics-auditing process because their loyalty determines an organization's success.

A)Customers
B)Suppliers
C)Special interest groups
D)Competitors
E)Legislators

Question 11

Which of the following is a statement that attests that the financial statements made in an audit are fairly stated, without limitations?

A)Adverse opinion
B)Qualified opinion
C)Unqualified opinion
D)Favorable opinion
E)Disclaimer of opinion

Question 12

Which of the following statements about ethics audits is false?

A)They provide an opportunity to measure conformity to the firm's desired ethical standards.
B)The terms ethics audits and social audits can be used interchangeably.
C)They provide an objective method for demonstrating a company's commitment to improving strategic planning, including its compliance with legal and ethical standards and social responsibility.
D)They can be a component of social audits.
E)They are systematic evaluations of an organization's ethics program and performance to determine whether it is effective.

Question 13

Which of the following is not a measure of ethical climate?

A)Collective skill
B)Collective ethical sensitivity
C)Collective character
D)Collective judgment
E)Collective moral motivation

Question 14

Which of the following provides international guidelines for compliance management?

A)Triple bottom line
B)Open Compliance Ethics Group
C)Balanced Scorecard
D)ISO 19600
E)Global Reporting Initiative

Question 15

Which of the following hasa significant impact on the success of an ethics program?

A)The types of ethical decisions
B)The quality of communication
C)The size of the company
D)Legal constraints
E)A statement of values

Question 16

During which step of the auditing process should a firm examine all documents that make explicit commitments to ethical, legal, or social responsibility?

A)Secure commitment of top managers and directors.
B)Establish a committee to oversee the audit.
C)Define the scope of the audit process.
D)Review organizational mission, goals, values, and policies.
E)Verify the results.

Question 17

The concept of ethics-auditing emerged from the movement to audit and report on companies' broader _____ initiatives.

A)product development
B)legal compliance
C)risk management
D)public relations
E)social responsibility

Question 18

Any attempt to verify outcomes and to compare them with standards can be considered a(n) _____ activity, although many smaller firms do not use this word.

A)ethical
B)auditing
C)formal
D)informal
E)accounting

Question 19

The word _____ implies a balanced organization that makes ethical financial decisions and also is ethical in more subjective matters of corporate culture.

A)compliance
B)integrity
C)financial management
D)corporate culture
E)transparency

Question 20

Two useful indicators for assessing employee issues are

A)staff turnover and stock price.
B)staff turnover and employee satisfaction.
C)staff turnover and honesty.
D)employee satisfaction and attendance.
E)employee satisfaction and productivity.

Question 21

At which stage of the ethics-auditing process would a hospital conduct focus groups with management, doctors, nurses, related health professionals, support staff, and patients?

A)Collect and analyze relevant information
B)Review organizational mission, goals, values, and policies
C)Identify stakeholders
D)Report the results
E)Verify the results

Question 22

Which of the following is not a technique for collecting evidence during the ethics audit?

A)Ratio analysis
B)Observing the data-collection process
C)Publishing the results of the audit
D)Examining internal and external documents
E)Confirming information in the firm's accounting records

Question 23

Compare and contrast ethics auditing and financial auditing. How can the tools of financial auditing be applied to ethics audits?

Question 24

Describe the process of conducting an ethics audit in detail.

Question 25

During the data-collection phase of the audit, the primary objective is to generate a variety of opinions about how the company is perceived and whether it is

A)fulfilling employee benefits commitments.
B)bringing in new customers.
C)meeting profit projections.
D)meeting earnings projections.
E)fulfilling stakeholders' expectations.

Question 26

When The Gap posts the results of its ethics audit on its website, it is engaged in which of the following steps of the ethics auditing process?

A)Submit the results to the U.S. Sentencing Commission.
B)Define the scope of the audit.
C)Collect and analyze relevant information.
D)Verify the results.
E)Report the results.

Question 27

Because ethics audits and social audits are _____, there are few standards that a company can apply with regard to reporting frequency, disclosure requirements, and remedial actions that it should take in response to results.

A)not necessary
B)expensive
C)required by law
D)mandatory
E)voluntary

Question 28

_____ is an independent assessment of the quality, accuracy, and completeness of a company's social or ethics report.

A)Publication
B)Verification
C)Auditing
D)Analysis
E)Validation

Question 29

Ethics audits can help companies identify potential _____ so they can implement plans to eliminate or reduce them before they reach crisis dimensions.

A)competitive advantages
B)risks and liabilities
C)productivity issues
D)technological glitches
E)market opportunities

Question 30

What should be the final step in the ethics-auditing process?

A)Define the scope of the audit.
B)Secure the commitment of top managers and directors.
C)Collect and analyze data.
D)Report the findings.
E)Verify the results.

Question 31

What is the Global Reporting Initiative? What is its goal? Why has it grown in importance?

Question 32

Explain the benefits and risks of ethics auditing.

Question 33

Independent verification of the ethics audit is important because it lends the report

A)credibility and formality.
B)credibility and civility.
C)credibility and objectivity.
D)objectivity and civility.
E)objectivity and formality.

Question 34

Retaliation against employees that report misconduct is a problem in _____ cultures.

A)weak ethical
B)strong ethical
C)high power distance
D)diverse
E)international

Question 35

What should be the first step in the auditing process?

A)Secure the commitment of top executives and directors
B)Define the scope of the audit
C)Establish a committee to oversee the audit
D)Collect and analyze data
E)Review organizational mission, goals, values, and policies

Question 36

What are the three triple bottom line factors incorporated into the Global Reporting Initiative framework?

A)Economic, social, personal indicators
B)Political, social, and environmental indicators
C)Economic, social, and environmental indicators
D)Political, individual, and environmental indicators
E)Political, individual, and personal indicators

Question 37

While social reports often discuss issues related to a firm's performance in the four dimensions of social responsibility, as well as to specific social responsibility and ethical issues, ethics audits have a narrower focus on assessing and reporting on a firm's performance in terms of

A)ethical and legal conduct.
B)environmental performance.
C)financial performance.
D)customer satisfaction.
E)ethical misconduct.

Question 38

How can companies secure stakeholder input during an ethics audit? Why is it important to do so?

Question 39

Ideally, which of the following should oversee the ethics audit?

A)The board's financial audit committee
B)The CFO
C)The CEO
D)Outside consultants
E)Secondary stakeholders

Question 40

Which of the following is not a phase of escalation during an ethical disaster?

A)The firm's discovery of the misconduct
B)Ethical issue recognition
C)The firm's response to the misconduct
D)The decision to act unethically
E)The firm's decision to conduct an ethics audit

Question 41

Shared values among employees are the glue of successful management. ​

Question 42

An ethics audit is much broader than a social audit. ​

Question 43

An ethics audit should be conducted regularly.

Question 44

The measuring of social, financial, and environmental factors (or people, places, and planet) that recognizes business has a responsibility to positively influence a variety of stakeholders, including customers, employees, shareholders, community, and the natural environment is defined as the

A)Balanced Scorecard.
B)integrity management.
C)triple bottom line.
D)Six Sigma.
E)Global Reporting Initiative.

Question 45

The measurement system that has become a prominent framework that companies have adopted to report their social and sustainability progress is defined as the

A)Balanced Scorecard.
B)OCEG Benchmarking Study.
C)Triple bottom line.
D)Six Sigma.
E)Global Reporting Initiative.

Question 46

Having the results of an ethics audit verified by an independent party is the second step in the ethics-auditing process.​

Question 47

Which of the following is important in defining the scope of the audit process? ​

A)​The types of teams involved in the process
B)​Opportunities the business has to manage ethics
C)​Who has been assigned to oversee the audit
D)​Government regulations outlining the process
E)​Deciding on how to verify the results

Question 48

A disclaimer of opinion for an audit states that the financial statements are clearly stated. ​

Question 49

Six Sigma is a methodology designed to manage process variations that cause defects and to systematically work toward managing variation to eliminate those defects. ​

Question 50

Which of the following compares standards with actual behavior?​

A)​Process controls
B)​Shared values
C)​Output controls
D)​Formal controls
E)​Ethics audits