Question 1

The Sarbanes-Oxley Act requires that:

Accepted Answer

The Sarbanes-Oxley Act requires public corporations to disclose whether they have adopted a code of ethics for senior financial officers and to report any change in the code or waiver of their application.

Question 2

Which of the following scenarios best exemplifies groupthink?

Accepted Answer

The scenario describing the officers of Jekyll Inc. best exemplifies groupthink. Groupthink is the tendency for members of a group to internalize the group's values and perceptions and to suppress critical thought.

Question 3

Which of the following is a teleological theory based on the laissez-faire theory of capitalism?

Accepted Answer

Profit maximization is a teleological theory that is based on the laissez-faire theory of capitalism first espoused by Adam Smith in the 18^th century. It contends that business managers should maximize a business's long-run profits within the limits of the law.

Question 4

The Sarbanes-Oxley Act:

Accepted Answer

As rational actors with a desire to maximize profits, corporations may conclude that breaking the law poses acceptable risks if the benefits gained by doing so are great, the penalties for violation are relatively light, and/or the chances of being sued or prosecuted are low. The Sarbanes-Oxley Act attempts to increase the likelihood of detection and prosecution and raises the penalties for illegal behavior.

Question 5

Corporate codes of ethical conduct:

Accepted Answer

There are two popular views of corporate codes of ethical conduct. One view sees them as genuine attempts to foster ethical behavior within a corporation or an industry. The other view regards them as thinly disguised attempts to mislead the public into believing that business behaves ethically in order to head off legislation that might impose more severe constraints on it.

Question 6

Under "act utilitarianism," _____.

Accepted Answer

Under "act utilitarianism," the decision maker considers each action separately, assessing its costs and benefits to society.

Question 7

Many corporations initiate legislation in order to:

Accepted Answer

More and more businesses are taking an active approach to government regulation. They have discovered that by initiating legislation they can (1) head off the risk of later unpredictable lawsuits, (2) influence the nature of the legislation-by minimizing the risk of more extensive and costly regulations, and (3) ensure that all of their competitors are subject to the same constraints.

Question 8

Advocates for socially responsible corporations sometimes recommend that corporations can sensitize themselves to outside concerns by restructuring their corporate decision-making processes by:

Accepted Answer

Numerous proposals designed to make corporations more sensitive to outside concerns have been offered throughout the past few decades. Generally these recommendations are of a procedural nature. Following are three such recommendations: (1) giving shareholders greater power, (2) changing the composition of the corporate board, and (3) changing the management structure.

Question 9

The problem with the view that a corporation should attempt to act in the best interests of all of its various constituencies is that:

Accepted Answer

The large modern corporation interacts with a number of important constituencies-for example, employees, unions, suppliers, customers, and the community in which it operates. Related to this perception is a view of corporate responsibility that holds the corporation should attempt to act in the best interests of all of its various constituencies. The major problem with this view is that the values of these constituencies may conflict.

Question 10

Which of the following is a reason why large corporations have the ability to influence legislation?

Accepted Answer

Large corporations, because of their size, resources, and sophistication, have the ability to influence legislation. Even if Congress or the state legislatures enact hostile regulatory legislation, corporations sometimes can blunt its impact.

Question 11

The problem with looking at values that find wide acceptance as a guide to ethical corporate behavior is that:

Accepted Answer

One theory suggests that ethical corporate behavior should be based on values that actually find wide acceptance today. However, corporations and managers adopting this course will immediately confront an unfortunate fact of modern life: its bewildering array of conflicting ethical views.

Question 12

The revised version of "Principles of Corporate Governance" of the Organization for Economic Cooperation and Development insists on:

Accepted Answer

In the wake of the recent corporate scandals, the 30 member countries of the Organization for Economic Cooperation and Development approved a revised version of the organization's "Principles of Corporate Governance," offering recommendations on how to rebuild and maintain investor confidence. A new principle was added that advocates greater protection for whistleblowers, including the creation of institutional structures through which they can report corporate wrongdoing.

Question 13

Which of the following statements best describes the phenomenon called risky shift?

Accepted Answer

Risky shift means that a group of people who must reach a consensus on an acceptable level of risk often decide on a level of risk higher than the risk they would accept as individuals. Thus, the decisions made by a team of managers may create greater legal problems than decisions made by an isolated manager.

Question 14

Which of the following is true of Organization for Economic Cooperation and Development (OECD)reports?

Accepted Answer

A report named "Business Approaches to Combating Corrupt Practices," of the Organization for Economic Cooperation and Development (OECD), looks at websites of the top multinational corporations to gain insight into the global business community's anticorruption efforts. It asserts that most corporate anticorruption programs are voiced in the enterprises' codes of conduct or corporate mission statements. However, after reviewing these statements, the report concluded that these statements tend to speak in positive terms (i.e., commitment to integrity or honesty) rather than expressly publishing policies that deal directly with corruption.

Question 15

The tendency for members of a group to internalize the group's values and perceptions and to suppress critical thought is known as _____.

Accepted Answer

Groupthink is the tendency for members of a group to internalize the group's values and perceptions and to suppress critical thought.

Question 16

The Sarbanes-Oxley Act:

Accepted Answer

The Sarbanes-Oxley Act creates a five-member Public Company Accounting Oversight Board with the authority to regulate CPA firms that audit publicly traded corporations. (Two members of the board are certified public accountants.) The law also broadly defines obstruction of justice and makes obstruction of audit work papers a felony.

Question 17

It is unlikely that greater control by shareholders will lead to greater corporate social responsibility because:

Accepted Answer

It is highly unlikely that greater control by shareholders will lead to greater corporate social responsibility because many, if not most, shareholders have a considerable interest in profit maximization and are not likely to initiate or approve corporate actions contrary to profit maximization.

Question 18

The new federal sentencing guidelines implemented as part of Sarbanes-Oxley:

Accepted Answer

New federal sentencing guidelines, implemented as part of Sarbanes-Oxley, provide greater incentives for directors to ensure their corporations are not breaking the law. The new guidelines assign specific oversight responsibilities to directors in an attempt to curb the largely unrestrained powers accumulated by management over the years.

Question 19

Corporate social responsibility advocates argue that ethical guidance for corporate managers may come from:

Accepted Answer

Some corporate social responsibility advocates argue that ethical guidance for corporate managers may come from three sources: (1) values that find wide acceptance, (2) corporate or industry codes of conduct, and (3) constituency values.

Question 20

Under the allocational efficiency theory,the primary objective of a business corporation is to:

Accepted Answer

Under the allocational efficiency theory, the primary objective of a business corporation is to maximize profits.

Quiz 3: Business Ethics and Corporate Social Responsibility

The Sarbanes-Oxley Act requires that:

Which of the following scenarios best exemplifies groupthink?

Which of the following is a teleological theory based on the laissez-faire theory of capitalism?

The Sarbanes-Oxley Act:

Corporate codes of ethical conduct:

Under "act utilitarianism," _____.

Many corporations initiate legislation in order to:

Advocates for socially responsible corporations sometimes recommend that corporations can sensitize themselves to outside concerns by restructuring their corporate decision-making processes by:

The problem with the view that a corporation should attempt to act in the best interests of all of its various constituencies is that:

Which of the following is a reason why large corporations have the ability to influence legislation?

The problem with looking at values that find wide acceptance as a guide to ethical corporate behavior is that:

The revised version of "Principles of Corporate Governance" of the Organization for Economic Cooperation and Development insists on:

Which of the following statements best describes the phenomenon called risky shift?

Which of the following is true of Organization for Economic Cooperation and Development (OECD) reports?

The tendency for members of a group to internalize the group's values and perceptions and to suppress critical thought is known as _____.

The Sarbanes-Oxley Act:

It is unlikely that greater control by shareholders will lead to greater corporate social responsibility because:

The new federal sentencing guidelines implemented as part of Sarbanes-Oxley:

Corporate social responsibility advocates argue that ethical guidance for corporate managers may come from:

Under the allocational efficiency theory,the primary objective of a business corporation is to: