Deck 5: Organizational Ethics and the Law

Question 1

It is impossible for multiple ethical climates to exist within one organization.

Answer 1

False

Question 2

Following laws can always define proper action.

Answer 2

False

Question 3

Managers,as major decision-makers,are one of the keys to whether a company will act ethically or unethically.

Answer 3

True

Question 4

In a benevolence ethical climate,the interests of the company's employees and external stakeholders most likely would be given high priority.

Question 5

In most companies,a moral atmosphere cannot be detected.

Question 6

According to a recent Transparency International survey,Denmark and Sweden are two countries that are least likely to be subjected to bribery.

Question 7

The majority of large U.S.corporations do not have codes of ethics.

Question 8

Ethics deal with human dilemmas that frequently go beyond the formal language of law.

Question 9

Personal values and moral character play key roles in improving a company's ethical performance.

Question 10

The unspoken understanding among employees of what is and is not acceptable behavior is called:

A) Ethical climate.
B) Efficiency.
C) Success.
D) Rites and rituals.

Question 11

Illegal acts committed by employees,such as fraud and insider trading,is called blue-collar crime.

Question 12

All ethics issues in business are the same.

Question 13

The American Institute of Certified Public Accountants Code directs accountants to be responsible to their clients and their profession,but not to the public.

Question 14

Honesty,integrity and accuracy are absolute requirements of the accounting function.

Question 15

If a manger approaches ethics with benevolence in mind,he or she would stress what?

A) Friendly relations with an employee.
B) Company rules and procedures.
C) Laws and professional codes.
D) Economic efficiency.

Question 16

Which of the following is not an example of an ethical criterion?

A) Egoism.
B) Concern for others.
C) Principle.
D) Corporate driven.

Question 17

If a manager approaches ethical issues with a self-centered approach,emphasis will be on:

A) Integrity.
B) Social relationship.
C) Economic efficiency.
D) Laws.

Question 18

The core components upon which a company's ethical performance depends include:

A) The values and virtues of the managers.
B) The personal character of the managers and employees.
C) The traditions, attitudes, and business practices built into a company's culture.
D) All of the above.

Question 19

In the United States,most ethics policies are primarily based on the company's mission and vision.

Question 20

Any business that wished to do so can improve the quality of its ethical performance.

Question 21

Which ethical criterion is described by the idea that a company should strive for efficiency?

A) Egoism.
B) Benevolence.
C) Principle.
D) Business-centered.

Question 22

Which of the following is not a typical use of an ethics reporting mechanism?

A) To provide interpretations of proper ethical behavior involving conflicts of interest and the appropriateness of gift giving.
B) To give employees an opportunity to discuss the appropriate rating on their annual performance reviews without management's influence.
C) To create an avenue to make known to the proper authorities allegations of unethical conduct.
D) To give employees and other corporate stakeholders a way to discover general information about a wide range of work-related topics.

Question 23

Business managers need a set of ethical guidelines to help them:

A) Understand the changing customs throughout the world.
B) Justify the resolution which best helps them.
C) Identify and analyze the nature of the ethical problem.
D) None of the above.

Question 24

A company that channels employee behavior in a lawful direction by emphasizing the threat of detection and punishment is:

A) Operating under the compliance-based approach.
B) Practicing "tone at the top."
C) Operating under the integrity-based approach.
D) Operating under the instrumental policy approach.

Question 25

Integrity-based ethics programs:

A) Seeks to avoid legal sanctions.
B) Combines concern for the law with an emphasis on employee responsibility.
C) Threatens employees with punishment for non-compliance with the ethics program.
D) Are predominately implemented within the European Union.

Question 26

When a bank employee makes trades using the firm's money without its authorization,the practice is called:

A) Rogue accounting.
B) Rogue trading.
C) Ponzi scheme.
D) Imbalanced banking.

Question 27

A giant step is taken toward improving ethical performance throughout the company when:

A) The firm hires a university ethics professor to lecture employees on moral philosophy.
B) The Justice Department launches an investigation of the firm's pricing practices.
C) Senior-level managers signal to employees that they believe ethics is a high priority.
D) A consumer hot line is created and staffed 24 hours a day.

Question 28

By law,the financial records of publicly held companies are required to be:

A) Managed by an accounting department of at least 5 CPAs.
B) Summarized in the employee manual for new hires.
C) Reviewed quarterly by the IRS.
D) Audited by a certified professional accounting firm.

Question 29

Which of the following organization's code of ethics advocates "loyalty to your organization,justice to those whom you deal and faith in your profession?"

A) Institute for Supply Management.
B) Institute of Certified Public Accountants.
C) Financial Accounting Standards Board.
D) Association for Computing Machinery.

Question 30

In the United States and Latin America,ethics policies were found to be primarily:

A) Informational - providing guidance for recommended ethical activity with the company.
B) Instrumental - providing rules and procedures for employees to follow to adhere policy and law.
C) Social - providing a framework for ethical interaction between employees and customers.
D) General - providing basic definitions of ethical decision-making.

Question 31

Building ethical safeguards into a company's everyday routines is called:

A) Change management.
B) Justifying ethics.
C) Institutionalizing ethics.
D) Ethical awareness.

Question 32

All of the following are commitments of the Principles of the Code of Professional Conduct of the American Institute of Certified Public Accountants except:

A) The Public Interest.
B) Objectivity and Independence.
C) Due Process.
D) Due Care.

Question 33

Which of the following is a typical practice in an ethics audit procedure?

A) The auditor notes any deviations from the company's ethics standards that become evident during the ethics audit.
B) The auditor brings deviations to the attention of the audit supervisor.
C) Department managers are required to file a report with the auditor on the corrective action they took to deal with the deviation.
D) All of the above.

Question 34

Ethisphere Magazine recognizes and rewards ethical leadership and business practices worldwide according to their:

A) Regulatory Percentage Track (RPT).
B) Ethics and Leadership Radar (ELR).
C) Quality Measurement (QM).
D) Ethical Quotient (EQ).

Question 35

Most ethics or compliance officers are generally entrusted to:

A) Act as a liaison between the company and the Securities and Exchange Commission.
B) Reduce the risks to the company of employee misconduct.
C) Annually distribute copies of the company's code of ethics to all interested stakeholders.
D) Arrange for ethics training for employees at a nearby university.

Question 36

A member of the Chartered Financial Analyst Institute (CFA)must:

A) Promote the integrity of and uphold the rules governing global capital markets.
B) Act with integrity, competence, diligence, respect, and in an ethical manner with the public.
C) Maintain and improve their professional competence.
D) All of the above.

Question 37

Ethics policies typically cover all of the following issues except:

A) Developing guidelines for accepting or refusing gifts from suppliers.
B) Encouraging discriminatory personnel practices.
C) Avoiding conflict of interest.
D) Maintaining the security of proprietary information.

Question 38

Ethics reporting mechanisms have been:

A) Established to create an avenue for the company to obtain allegations of unethical conduct.
B) Increasing in employee use and effectiveness.
C) Wholly rejected by skeptical and weary employees.
D) Both A and B, but not

Question 39

The critical component in installing an effective ethics program is:

A) To allow all employees the freedom to act as they wish.
B) In hiring an expensive ethics consultant.
C) The integration of various ethics safeguards into a comprehensive program.
D) Maintaining the position as the industry sales leader.

Question 40

Typically,ethics training is offered to:

A) Managers.
B) To the rank-and-file.
C) Both managers and the rank-and-file.
D) The Board of Directors only.

Question 41

Construct a comprehensive ethics program using four of the six ethical safeguards identified in the textbook.

Question 42

The Interactive Digital Software Association case exemplifies:

A) The idea that laws cannot always define proper action.
B) The idea that ethical principles are broader than laws.
C) Industries preempting legislation and voluntarily adopting ethically based practices.
D) All of the above.

Question 43

Define law.Discuss the differences between law and ethics.

Question 44

Which U.S.Act prohibits executives representing U.S.-based companies from paying bribes to foreign government officials,political parties,or political candidates:

A) The USA Patriot Act.
B) The UK Bribery Act.
C) The Corruption of Foreign Officials Act.
D) The U.S. Foreign ­Corrupt Practices Act.

Question 45

How are firms honored for their efforts to create an ethical climate? Provide examples of role model companies and what efforts they took to develop effective ethics programs.

Question 46

Define white-collar crime.Provide three examples of such criminal acts.

Question 47

Define bribery.Explain why certain countries are less likely to participate in such acts.

Question 48

Which of the following is not an example of a white-collar crime?

A) Embezzlement.
B) Check fraud.
C) Theft.
D) Money laundering.

Question 49

One of the most widespread and potentially powerful efforts to combat bribery was initiated by:

A) The Global Forum on Fighting Corruption.
B) The Organization for Economic Cooperation and Development.
C) International Labour Organization.
D) The U.S. Foreign Corrupt Policy Act.

Question 50

Not all ethics issues in business are the same.Discuss the distinct ethical issues across three different organizational functions.Highlight details of the professional codes of conduct for each.

Question 51

Recipients of the corporate ethics awards show that:

A) Awards are based on economic power, not ethical performance.
B) Firms can be financially successful and ethically focused.
C) Being legally compliant results in receiving an ethics award.
D) Improving ethical performance is very costly, but bolsters a firm's reputation.

Question 52

Define ethical climate.Discuss the differences and similarities among the ethical climates outlined in the textbook.