Question 1

A value that is almost universally respected by stakeholder groups is a
A) super norm.
B) alfa norm.
C) value norm.
D) hypernorm.
E) general norm.

Accepted Answer

A hypernorm is a value that is universally respected by all stakeholder groups across cultures and countries. This type of norm is seen as foundational to any ethical framework and is considered the highest level of ethical consideration. Therefore, a hypernorm is the best choice for a value that is almost universally respected by stakeholder groups.

Question 2

Not reporting environmental issues is an example of
A) lack of transparency.
B) lack of integrity.
C) lack of accuracy.
D) All of these are correct.
E) None of these are correct.

Accepted Answer

B

Question 3

Most large corporations do not consider which these risks in a broad and comprehensive way?
A) operational risks
B) reputational risks
C) credit risks
D) market risks
E) ethics risks

Accepted Answer

Ethics risks refer to the potential harm to a company's reputation and bottom line resulting from unethical behavior or practices, such as fraud, corruption, or environmental damage. Many corporations may overlook or downplay these risks, leading to negative consequences in the long term.

Question 4

Which of the following would be a key control function of the Board of Directors?
A) to set guidance and boundaries
B) to appoint the CEO
C) to approve the sale of company's assets
D) to decide on the company's auditor
E) All of these are correct.

Accepted Answer

All of the options listed are key control functions of the Board of Directors. 
- Setting guidance and boundaries provides strategic direction for the company.
- Appointing the CEO ensures the company has a capable leader.
- Approving the sale of company assets ensures that there are proper checks and balances for major business decisions.
- Deciding on the company's auditor ensures that there is independent oversight of the company's financial reporting.

Question 5

Since the mid-1990s, both management and auditors have become increasingly
A) profit management oriented.
B) ethics oriented.
C) value management oriented.
D) risk management oriented.
E) ethics oriented and risk management oriented.

Accepted Answer

Since the mid-1990s, there has been a growing emphasis on ethics and risk management in both management practices and auditing. This shift reflects a broader concern for corporate governance, transparency, and the management of potential risks to ensure sustainable business operations.

Question 6

Ethical corporate behavior is expected to lead to
A) higher profitability in the short-term.
B) higher profitability both in the short-term and long-term.
C) lower profitability in the long-term.
D) higher profitability in the long-term.
E) lower profitability both in the short-term and long-term.

Accepted Answer

Ethical corporate behavior is expected to lead to higher profitability in the long-term. This is because ethical behavior builds trust with stakeholders, which can lead to increased customer loyalty, a better reputation, and a more motivated workforce. All of these factors can ultimately lead to increased profitability in the long-term. While there may be some short-term costs associated with implementing ethical policies or making necessary changes to behave ethically, the benefits can outweigh these costs in the long-term.

Question 7

Which of the following is a fundamental factor in having an effective ethical corporate culture?
A) tone at the top (i.e., ethical leadership)
B) efficient oversight by the company's Board of Directors
C) workplace ethics
D) code of conduct
E) tone at the top and workplace ethics

Accepted Answer

Both tone at the top (i.e., ethical leadership) and workplace ethics are fundamental factors in having an effective ethical corporate culture. Tone at the top refers to the behavior, actions, and communication of senior leaders and executives that set the tone for ethical behavior throughout the organization. Workplace ethics refer to the values, principles, and standards of conduct that guide employee behavior and decision-making in the workplace. A strong ethical culture requires both leadership commitment and employee engagement. A code of conduct and oversight by the company's Board of Directors are also important elements, but they are not as fundamental as tone at the top and workplace ethics.

Question 8

Professional accountants, in their fiduciary role, owe their primary loyalty to
A) the accounting profession.
B) the client.
C) the general public.
D) government regulations.
E) All of these are correct.

Accepted Answer

Professional accountants owe their primary loyalty to the general public, reflecting their role in ensuring the integrity and transparency of financial information.

Question 9

Which organization is developing an international code of conduct for professional accountant?
A) International Accounting Standards Board
B) European Federation of Accountants
C) Financial Accounting Standards Board
D) Public Accounting Oversight Board
E) International Federation of Accountants

Accepted Answer

The International Federation of Accountants (IFAC) is the organization that is developing an international code of conduct for professional accountants. IFAC is a global association that represents the accounting profession and aims to promote high-quality practices among accountants worldwide.

Question 10

Incomplete disclosure of the company's revenue recognition policy is an example of
A) lack of transparency.
B) lack of integrity.
C) lack of accuracy.
D) All of these are correct.
E) None of these are correct.

Accepted Answer

Incomplete disclosure of revenue recognition policy indicates a lack of transparency in financial reporting, as stakeholders may not have access to critical information that could impact their decision-making. It does not necessarily suggest a lack of accuracy or integrity, as revenue recognition policies can be complex and subject to interpretation.

Question 11

Which of the following are examples of ethics risks faced by employees?
A) honesty and integrity
B) fairness and compassion
C) integrity and responsibility
D) fairness and integrity
E) responsibility and honesty

Accepted Answer

The answer of Which of the following are examples of...

Question 12

Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts?
A) corporate annual report
B) corporate social responsibility report
C) corporate quarterly report
D) corporate stakeholder report
E) corporate ethics committee report

Accepted Answer

A corporate social responsibility report is specifically focused on discussing the company's environmental, health and safety, philanthropic, and other social impacts. The annual report and quarterly report may touch on these topics, but their primary focus is on financial performance. The stakeholder report may also discuss these issues, but it is not as commonly used as a CSR report. The ethics committee report may address ethical issues, but not necessarily CSR topics.

Question 13

Companies attempt to manage the risk of something happening that will have a negative or positive impact on the company's objectives, such as
A) credit risks.
B) litigation risk.
C) reputation risk.
D) ethics risks.
E) All of these are correct.

Accepted Answer

All of these risks can have an impact on a company's objectives. Credit risks can affect the company's financial health, litigation risks can result in monetary damages or harm to the company's reputation, reputation risks can impact consumer and stakeholder trust, and ethics risks can lead to legal and reputational repercussions. Companies need to manage and mitigate all of these risks to protect their bottom line and maintain stakeholder confidence.

Question 14

Which philosophical approach requires that an ethical decision depend upon the duty, rights, and justice involved?
A) consequentialism
B) virtue ethics
C) duty ethics
D) righteousness
E) deontology

Accepted Answer

Deontology is the philosophical approach that focuses on the duty, rights, and justice involved in ethical decision-making.

Question 15

Which of the following are determinants of reputation?
A) trustworthiness and responsibility
B) credibility, responsibility and relevance
C) responsibility and impartiality
D) relevance and impartiality
E) relevance, credibility and responsibility

Accepted Answer

The answer of Which of the following are determinants of...

Question 16

Effective crisis management could represent
A) an opportunity to avoid costs.
B) an opportunity to change employees' perspectives on risk.
C) an opportunity to enhance the company's reputation.
D) All of these are correct.
E) None of these are correct.

Accepted Answer

The answer of Effective crisis management could represent
A) an opportunity...

Question 17

Which of the following is NOT a trend described in Chapter 1 as having an impact on the ethics of business?
A) directors' legal liability
B) management's stated intention to protect reputation
C) auditors' legal liability
D) management's assertions to shareholders on the adequacy of internal controls
E) management's stated intention to manage risk

Accepted Answer

The answer of Which of the following is NOT a...

Question 18

Examining the interests of stakeholders is probably required for
A) high short-term profits.
B) optimal medium and longer-term profits.
C) continuing support from stakeholder groups.
D) effective risk management.
E) All of these are correct.

Accepted Answer

The answer of Examining the interests of stakeholders is probably...

Question 19

The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as the
A) credibility gap.
B) expectations gap.
C) audit gap.
D) stewardship gap.
E) None of these are correct.

Accepted Answer

The expectations gap is the difference between what the public expects from audited financial statements and what they actually receive. This can include the perceived level of assurance and the scope of the audit. The credibility gap refers specifically to a lack of trust or confidence in the audited financial statements. Audit gap and stewardship gap are not commonly used terms related to financial statements.

Question 20

The Modified Moral Standards Approach focuses on which of the following dimensions of the impact of a proposed action?
A) net benefit to society, fair to all stakeholders, whether it is right, and virtues expected
B) net benefit to society and whether it is legal
C) net benefit to society, fair to all stakeholders, and whether it is legal
D) fair to most stakeholders and whether it is right
E) net benefit to society, fair to most stakeholders, and whether it is right

Accepted Answer

The Modified Moral Standards Approach emphasizes a comprehensive evaluation of the impact of a proposed action, including its net benefit to society, fairness to all stakeholders, the moral rightness of the action, and the virtues expected to be upheld. This approach integrates various ethical considerations to ensure a well-rounded analysis.

Quiz 1: Ethics Expectations.

A value that is almost universally respected by stakeholder groups is a

Not reporting environmental issues is an example of

Most large corporations do not consider which these risks in a broad and comprehensive way?

Which of the following would be a key control function of the Board of Directors?

Since the mid-1990s, both management and auditors have become increasingly

Ethical corporate behavior is expected to lead to

Which of the following is a fundamental factor in having an effective ethical corporate culture?

Professional accountants, in their fiduciary role, owe their primary loyalty to

Which organization is developing an international code of conduct for professional accountant?

Incomplete disclosure of the company's revenue recognition policy is an example of

Which of the following are examples of ethics risks faced by employees?

Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts?

Companies attempt to manage the risk of something happening that will have a negative or positive impact on the company's objectives, such as

Which philosophical approach requires that an ethical decision depend upon the duty, rights, and justice involved?

Which of the following are determinants of reputation?

Effective crisis management could represent

Which of the following is NOT a trend described in Chapter 1 as having an impact on the ethics of business?

Examining the interests of stakeholders is probably required for

The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as the

The Modified Moral Standards Approach focuses on which of the following dimensions of the impact of a proposed action?