Question 1

Erica,an accountant,notices suspicious accounting practices at the firm where she is employed.She wants to report the unethical behavior to authorities but is worried that she might be harassed or demoted as a result.Which law was passed to protect Erica in this situation?

Accepted Answer

D)The Sarbanes-Oxley Act contains broad employee whistle-blower protections that subject corporations and their managerial personnel to significant civil and criminal penalties for retaliating,harassing,or discriminating against employees who report suspected corporate wrongdoing.

Question 2

Although laws cannot mandate ethics,they may be able to identify the baseline separating what is good and what is bad.

Accepted Answer

Many experts contend that ethics cannot be legislated.Although laws cannot mandate ethics,they may be able to identify the baseline separating what is good and what is bad.

Question 3

The garment factory building collapse in Bangladesh in 2013 in which 1,127 people lost their lives,is simply an example of poor engineering.

Accepted Answer

Although some companies continue to say that they are fully committed to CSR,their less-than-socially-responsible behavior does not support their stated commitment.The garment factory building collapse in Bangladesh in 2013 stands among history's worst industrial disasters,officially claiming 1,127 lives.

Question 4

According to the Procurement Integrity Act,if a firm that has an ethics program in place is found guilty of misconduct,the firm will receive a reduced punishment.

Accepted Answer

The Federal Sentencing Guidelines for Organizations Act promised softer punishments for wayward corporations that already had ethics programs in place.The Procurement Integrity Act of 1988,prohibits the release of source selection and contractor bid or proposal information.

Question 5

In the 2003 case Bechtel v Competitive Technologies Inc.,the Supreme Court overturned Sarbanes-Oxley's whistleblower-protection rule.

Accepted Answer

Bechtel v Competitive Technologies Inc.involved wrongful termination under Sarbanes-Oxley's whistleblower protection rule.The Court ruled that the company violated the Act by firing two employees and ordered them reinstated,so the whistleblower protection rule was upheld.

Question 6

A recent survey of 358 compliance and ethical professionals revealed that ________.

Accepted Answer

C)A survey of 358 compliance and ethics professionals by the Society of Corporate Compliance and Ethics (SCCE)and Health Care Compliance Association found that only a few companies have made ethics and compliance a process for determining how employees are compensated,and only about one company in six ties employee bonuses and incentives to ethical performance.

Question 7

The Procurement Integrity Act of 1988 was passed after reports of military contracts for $500 toilet seats and $5,000 hammers.

Accepted Answer

The Procurement Integrity Act of 1988,prohibits the release of source selection and contractor bid or proposal information.The Act was passed after there were reports of military contracts for $500 toilet seats and $5,000 hammers.

Question 8

The Corporate and Auditing Accountability,Responsibility and Transparency Act is also known as the Sarbanes-Oxley Act.

Accepted Answer

The Corporate and Auditing Accountability,Responsibility,and Transparency Act of 2002 was passed to legislate business ethics.The act,also known as the Sarbanes-Oxley Act,criminalized many corporate acts that were previously relegated to various regulatory structures.

Question 9

According to the Malcolm Baldrige National Quality Award,senior leaders should ________.

Accepted Answer

B)According to criteria for the Malcolm Baldrige National Quality Award,senior leaders should serve as role models for the rest of their organizations.Baldrige applicants are asked questions about how senior leaders create an environment that fosters legal and ethical behavior.They need to show how the leaders address governance matters such as fiscal accountability and independence in audits.

Question 10

Harvey Electronics has used a number of methods to create an ethical culture that both employees and customers appreciate.What is the most effective way for the firm to sustain its ethical culture?

Accepted Answer

B)One way to create and sustain an ethical culture is to audit your ethics,much as you might audit your finances each year.An ethics audit is simply a systematic,independent,and documented process for obtaining evidence regarding the status of an organization's ethical culture.It is taking a closer look at a firm's ethical culture instead of just allowing it to remain unexamined.

Question 11

The Federal Sentencing Guidelines for Organizations Act contains broad employee whistle-blower protections that subject corporations to penalties for retaliating against employees who report suspected corporate wrongdoing.

Accepted Answer

The Sarbanes-Oxley Act contains broad employee whistle-blower protections that subject corporations and their managerial personnel to significant civil and criminal penalties for retaliating,harassing,or discriminating against employees who report suspected corporate wrongdoing.

Question 12

Which 2003 Supreme Court case upheld Sarbanes-Oxley's whistleblower-protection rule?

Accepted Answer

B)In the 2003 Bechtel v Competitive Technologies Inc.Supreme Court case involving wrongful termination under Sarbanes-Oxley's whistle-blower-protection rule,the Court ruled that the company violated the Act by firing two employees and ordered them reinstated.They were fired because during a meeting they had raised concerns about the company's decision not to report,on its SEC filing,an act they thought should have been disclosed.

Question 13

The Supreme Court ruling in Bechtel v Competitive Technologies Inc.upheld which federal law?

Accepted Answer

B)In the 2003 Bechtel v Competitive Technologies Inc.Supreme Court case involving wrongful termination under Sarbanes-Oxley's whistle-blower-protection rule,the Court ruled that the company violated the Act by firing two employees and ordered them reinstated.They were fired because during a meeting they had raised concerns about the company's decision not to report,on its SEC filing,an act they thought should have been disclosed.

Question 14

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in 2010.

Accepted Answer

The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in 2010,in response to the greatest financial crisis since the Great Depression.

Question 15

According to the Sarbanes-Oxley Act,any SEC reporting bank that does not have a code of ethics must ________.

Accepted Answer

B)Sarbanes-Oxley requires publicly traded companies to disclose whether or not they have adopted a code of ethics for senior officers.The Act does not require SEC reporting banks and bank-holding companies to have a code of ethics,but if an SEC reporting company does not have one,it must explain why.

Question 16

The primary purpose of an ethics audit is to ________.

Accepted Answer

C)An ethics audit is simply a systematic,independent,and documented process for obtaining evidence regarding the status of an organization's ethical culture.It is taking a closer look at a firm's ethical culture instead of just allowing it to remain unexamined.

Question 17

Which of the following is NOT required by the Sarbanes-Oxley Act?

Accepted Answer

C)The Sarbanes-Oxley Act does not require SEC reporting banks and bank-holding companies to have a code of ethics.It requires publicly traded companies to disclose whether or not they have adopted a code of ethics for senior officers.The Act states that management may not discharge,demote,suspend,threaten,harass,or in any other manner discriminate against an employee protected by the Act.The law prohibits loans to executives and directors.

Question 18

John provides information to the SEC about conduct by his employer that he believes constitutes securities fraud.Which law most likely protects John from being demoted for his actions?

Accepted Answer

C)The Sarbanes-Oxley Act states that management may not discharge,demote,suspend,threaten,harass,or in any other manner discriminate against an employee protected by the Act.It protects any employee who lawfully provides information to governmental authorities concerning conduct he or she reasonably believes constitutes mail,wire,or securities fraud; violations of any rule or regulation issued by the SEC; or violations of any other federal law relating to fraud against shareholders.

Question 19

The Sarbanes-Oxley Act was passed in response to reports of out-of-control military spending.

Accepted Answer

The Sarbanes-Oxley Act was passed to redress accounting and financial reporting abuses in light of corporate scandals rather than military spending.

Question 20

Which law contains broad employee whistle-blower protections against firms and managers that retaliate or harass employees who report suspected corporate wrongdoing?

Accepted Answer

A)The Sarbanes-Oxley Act contains broad employee whistle-blower protections that subject corporations and their managerial personnel to significant civil and criminal penalties for retaliating,harassing,or discriminating against employees who report suspected corporate wrongdoing.

Quiz 2: Business Ethics and Corporate Social Responsibility