Question 1

Responsibility goes hand in hand with:
A) Respect
B) Loyalty
C) Courage
D) Accountability

Accepted Answer

Responsibility is closely linked with accountability, as both concepts involve being answerable or accountable for one's actions or decisions. Accountability is a direct consequence of taking responsibility.

Question 2

What is the common characteristic of Aristotle's virtues and ethical standards for CPAs?
A) Truthfulness
B) Integrity
C) Loyalty
D) Due care

Accepted Answer

The common characteristic of Aristotle's virtues and ethical standards for CPAs is integrity. Aristotle believed in the importance of virtues such as honesty, fairness, and justice, which align with the ethical standards set by the CPA profession. Integrity is a core value in the accounting profession, and CPAs are expected to uphold high ethical standards and act with honesty and integrity in all professional dealings.

Question 3

An accountant who blows the whistle on financial wrongdoing by his/her employer by going outside the entity violates:
A) The due care principle
B) Confidentiality
C) One's reliability obligation
D) All of these

Accepted Answer

Blowing the whistle on financial wrongdoing by going outside the entity violates the confidentiality principle, which requires accountants to maintain the confidentiality of client information unless disclosure is authorized or legally required. The due care principle and reliability obligation are not violated in this scenario as the accountant is acting in the best interest of stakeholders by exposing wrongdoing. Therefore, the correct choice is B.

Question 4

The Public Interest Principle in the AICPA Code of Professional Conduct recognizes:
A) The importance of integrity in decision making
B) The importance of stakeholder groups
C) The need to be independent of the client
D) The importance of exercising objectivity in decision making

Accepted Answer

The answer of The Public Interest Principle in the AICPA...

Question 5

Each of the following is an element of trustworthiness according to the Josephson Institute except for:
A) Reliability
B) Loyalty
C) Fairness
D) Honesty

Accepted Answer

Fairness is not listed as an element of trustworthiness by the Josephson Institute, which focuses on reliability, loyalty, and honesty.

Question 6

An internal accountant should always consider taking each the following steps after exhausting all avenues of appeal within the organization when there is a difference of opinion with top management on an accounting or financial reporting matter except for
A) Inform the SEC
B) Terminate employment with the entity
C) Seek legal advice before taking any action
D) All of these

Accepted Answer

The answer of An internal accountant should always consider taking...

Question 7

Empathy entails all of the following characteristics of behavior except for:
A) Being loyal to one's friends
B) Being understanding of one's friends
C) Being sensitive to the feelings of one's friends
D) All of these

Accepted Answer

Empathy involves understanding and sensitivity towards others' feelings, but being loyal to one's friends is not a necessary characteristic of empathy. Loyalty is more related to trust and commitment than empathy.

Question 8

Each of the following characteristics describes the importance of integrity in decision making except for:
A) Acting out of moral principle
B) Being loyal to one's superior
C) Having the courage to do the right thing
D) Not subordinating professional judgment to others

Accepted Answer

While loyalty is an admirable quality, it should not override the importance of making ethical and moral decisions. In fact, integrity requires making decisions based on one's moral principles and professional judgment, even if it means going against the wishes of a superior. Therefore, being loyal to one's superior should not be the primary focus when it comes to integrity in decision making.

Question 9

When is it appropriate to contact the audit committee about a difference of opinion with the CFO over an accounting or financial reporting manner?
A) If the CFO does not agree to correct the financial statements
B) The CEO supports the CFO and does not agree to correct the financial statements
C) The external auditors support the CEO and do not agree to correct the financial statements
D) The audit committee should always be the first to be informed about such a difference of opinion

Accepted Answer

The answer of When is it appropriate to contact the...

Question 10

Objectivity requires that a CPA should:
A) Maintain a mental attitude of impartiality
B) Maintain a mental attitude of intellectual honesty
C) Be free of conflicts of interest
D) All of these

Accepted Answer

Objectivity requires all three of these qualities - maintaining a mental attitude of impartiality, maintaining a mental attitude of intellectual honesty, and being free of conflicts of interest.

Question 11

Respect is an important character of behavior because:
A) It entails a loyalty obligation to one's superior
B) It enables one to perform professional services competently
C) It is critical to maintaining one's integrity
D) It encompasses attributes of how we should treat others

Accepted Answer

Respect encompasses attributes of how we should treat others, including treating them with kindness, consideration, and dignity. It is a fundamental aspect of interpersonal relationships and is necessary for building trust, fostering cooperation, and promoting understanding. Respect for others also contributes to the development of positive self-esteem and helps individuals to maintain their own integrity. While loyalty and competence can also be important components of behavior, they are not as directly related to the concept of respect.

Question 12

Each of the following describes the behavior of Cynthia Cooper in the WorldCom fraud except for:
A) Persistence
B) Competence
C) Integrity
D) Hesitance

Accepted Answer

The other choices describe Cynthia Cooper's behavior in the WorldCom fraud, as she persistently pursued leads of fraudulent financial reporting, demonstrated competence in uncovering the fraud, and acted with integrity by reporting her findings to higher management and the board of directors. However, hesitance is not a characteristic that accurately describes her behavior, as she took swift action once she discovered the fraud.

Question 13

If one's reputation is tainted it may create a:
A) Conflict of interests
B) Loss of independence
C) Lack of trust
D) All of these

Accepted Answer

A tainted reputation primarily leads to a lack of trust, as people may doubt the individual's integrity or reliability.

Question 14

Treating other fairly encompasses treating them:
A) Equally, impartially, and responsibly
B) Equally, responsibly, and openly
C) Impartially, openly, and diligently
D) Equally, impartially, and openly

Accepted Answer

Treating others fairly means treating them equally, without any bias or discrimination, and openly, which means being transparent and honest in our dealings with them. Impartiality is also important in treating others fairly, which means not showing favoritism or prejudice towards any particular person or group. Therefore, the best choice is treating others equally, impartially, and openly, which is consistent with the principles of fairness and justice.

Question 15

Which of the following situations would be considered ethical?
A) The cashier at Wal-Mart gives you $5 more than you were supposed to receive and you don't do anything about it
B) You accidentally back into a car at Wal-Mart and leave your information for them to call
C) Receiving fake $20 bills and using them in a store while knowing they are fake
D) Finding a phone in a restaurant and keeping it

Accepted Answer

Option B would be considered ethical as it involves taking responsibility for your actions and attempting to make it right for the other party involved. Options A, C, and D involve dishonesty and/or theft, and therefore would not be considered ethical.

Question 16

Jane finds a material misstatement while auditing a client's accounts receivables. Her senior tells her to ignore the misstatement so that the client does not get upset. Jane wants to be viewed as a team player in order to advance in the firm. So Jane follows her senior's instructions and ignores the misstatement. Which ethical theory did Jane use to make her decision?
A) Egoism
B) Justice
C) Virtue ethics
D) Utilitarianism

Accepted Answer

Egoism is an ethical theory that suggests individuals should act based on what benefits them personally. In this scenario, Jane chose to ignore the misstatement to avoid upsetting the client and to be viewed as a team player, which could potentially benefit her career. This decision prioritizes her own interests over the ethical obligation to report material misstatements, which aligns with the principles of egoism.

Question 17

Each of the following is a pillar of character according to the Josephson Institute except for:
A) Caring
B) Citizenship
C) Respect
D) Judgmental

Accepted Answer

The Josephson Institute identifies six pillars of character, which are Trustworthiness, Respect, Responsibility, Fairness, Caring, and Citizenship. "Judgmental" is not one of the pillars identified by the Josephson Institute.

Question 18

Ethical relativism can best be described as a:
A) Point of view that morality is relative to the norms of one's culture.
B) Concept that holds that integrity should be maintained in the face of pressure by others.
C) An ethical reasoning method that holds one should always act out of self-interest.
D) An ethical reasoning method that holds one should always consider the effect of one's actions on others.

Accepted Answer

Ethical relativism is the belief that morality is relative to the norms of one's culture. It holds that there is no objective moral truth that is universally applicable across cultures and societies, but rather that what is considered morally right or wrong is determined by the cultural and social norms that shape the beliefs and values of a particular group or community.

Question 19

Each of the following elements make up an integral part of what is meant by "ethics" except for:
A) Accepted standards of behavior
B) Knowing the difference between right and wrong
C) Always following the law
D) The moral point of view

Accepted Answer

While laws can often reflect ethical principles, they do not necessarily define ethics. Ethics involves making decisions based on moral principles, including but not limited to societal norms and legal codes.

Question 20

The ancient Greeks thought of the virtues as characteristics of behavior that:
A) Could lead to a good life
B) Make up the "six pillars of character"
C) Support the rights theory
D) All of these

Accepted Answer

The question is asking for the ancient Greek's understanding of virtues. According to them, virtues were characteristics of behavior that could lead to a good life. This aligns with the concept of eudaimonia, or human flourishing, which was central to Greek philosophy. Therefore, option A is the best choice. Options B and C are not accurate in the context of the question.

Quiz 1: Ethical Reasoning: Implications for Accounting

Responsibility goes hand in hand with:

What is the common characteristic of Aristotle's virtues and ethical standards for CPAs?

An accountant who blows the whistle on financial wrongdoing by his/her employer by going outside the entity violates:

The Public Interest Principle in the AICPA Code of Professional Conduct recognizes:

Each of the following is an element of trustworthiness according to the Josephson Institute except for:

An internal accountant should always consider taking each the following steps after exhausting all avenues of appeal within the organization when there is a difference of opinion with top management on an accounting or financial reporting matter except for

Empathy entails all of the following characteristics of behavior except for:

Each of the following characteristics describes the importance of integrity in decision making except for:

When is it appropriate to contact the audit committee about a difference of opinion with the CFO over an accounting or financial reporting manner?

Objectivity requires that a CPA should:

Respect is an important character of behavior because:

Each of the following describes the behavior of Cynthia Cooper in the WorldCom fraud except for:

If one's reputation is tainted it may create a:

Treating other fairly encompasses treating them:

Which of the following situations would be considered ethical?

Each of the following is a pillar of character according to the Josephson Institute except for:

Ethical relativism can best be described as a:

Each of the following elements make up an integral part of what is meant by "ethics" except for:

The ancient Greeks thought of the virtues as characteristics of behavior that: