Question 1

The following performance component recommended by the Global Reporting Initiative relates to customer health and safety, marketing communications, and customer privacy.

Accepted Answer

Product responsibility encompasses customer health and safety, marketing communications, and customer privacy, as it focuses on the impact of products and services on customers.

Question 2

The following need is at the top of Maslow's Hierarchy of Needs.

Accepted Answer

Fulfillment is at the top of Maslow's Hierarchy of Needs, representing self-actualization, where individuals realize their potential and seek personal growth and fulfillment.

Question 3

Auditors are mandated to assess the client's risk of financial reporting fraud. Auditing standard     SAS 99 considers the following a mandatory tool in fraud assessment.

Accepted Answer

SAS 99 mandates that auditors should engage in discussion and brainstorming sessions among the audit team to consider the risks of material misstatement due to fraud.

Question 4

An employee in charge of the cash register at a busy restaurant steals small sums of money at the end of the day whenever the cash in the register exceeds the sum of the day's bills. He thinks it is fine to do so because every day there are two or three customers that pay more than they should. This type of rationalization is categorized as:

Accepted Answer

The employee justifies the theft by suggesting that the customers are not harmed because they overpaid, which aligns with the concept of "denial of the victim."

Question 5

Which of the following is a source of risk identified by both the AICPA/CICA/CPA Canada and the Institute of Internal Auditors?

Accepted Answer

The answer of Which of the following is a source...

Question 6

An employee in charge of collecting tickets at the entrance of a movie theater lets her friends enter the theater without paying for tickets. She thinks it is fine to do so because the employees at the popcorn bar give free popcorn to their friends. This type of rationalization is categorized as:

Accepted Answer

This behavior is rationalized through the "everyone else is doing it" justification, where the employee sees others (like those at the popcorn bar) bending rules for friends and feels justified to do the same, suggesting a normalization of such actions among peers.

Question 7

What is the most important reason sexual harassment has recently become much more important for businesspeople?

Accepted Answer

High-profile cases have brought significant attention to the issue, changing public opinion and reducing tolerance for sexual harassment, making it a critical concern for businesses.

Question 8

What are the two most difficult practical aspects of sustainability reporting?

Accepted Answer

The answer of What are the two most difficult practical...

Question 9

An employee in charge of writing checks to suppliers in a manufacturing firm steals small sums of money every month by writing himself a check for the total of the discounts he negotiates with the company's suppliers. This type of rationalization is categorized as:

Accepted Answer

The answer of An employee in charge of writing checks...

Question 10

What is the recommended strategy when stakeholders' potential for threat is high and the stakeholders' potential for cooperation is high?

Accepted Answer

The answer of What is the recommended strategy when stakeholders'...

Question 11

The new enterprise risk management (ERM)focuses on how risks and opportunities might impact the achievement of strategic goals as well as the creation, preservation, realization, or erosion of value.  ERM involves the assessment of an organization's:

Accepted Answer

The answer of The new enterprise risk management (ERM)focuses on...

Question 12

Which of the following best describes harassment?

Accepted Answer

Harassment is characterized by improper behavior that is considered offensive by the victim. Whether the perpetrator knows it is offensive (A) or does not know it is offensive (D), it can still constitute harassment if it affects the victim negatively.

Question 13

An employee in charge of the customer service helpline urgently needs some extra cash for paying his son's hospital bills. According to the fraud triangle, this situation likely constitutes:

Accepted Answer

The need for extra cash to pay for a son's hospital bills provides a financial pressure or motive, which is one of the components of the fraud triangle. This component explains why an individual might commit fraud.

Question 14

Ethics and ethical corporate culture should play a vital role in setting:

Accepted Answer

The answer of Ethics and ethical corporate culture should play...

Question 15

The disclosure of the following three performance categories is recommended by the Global Reporting Initiative.

Accepted Answer

The Global Reporting Initiative (GRI) recommends the disclosure of performance in three key areas: economic, environmental, and social. These categories encompass a broad range of sustainability issues that organizations face, encouraging transparency and accountability in their operations.

Question 16

Which of the following would be the least useful report of ethics risks and opportunities?

Accepted Answer

Reporting ethics risks and opportunities by shareholder group would be the least useful because it focuses on the interests of a specific group rather than on the broader ethical considerations that affect the entire organization, its stakeholders, and society at large.

Question 17

An employee in charge of counting and depositing cash holdings at the end of the day urgently needs some extra cash to pay her son's medical bills. According to the fraud triangle, this situation likely constitutes:

Accepted Answer

The situation described provides a motive/need (the urgent need for cash for medical bills) and opportunity (being in charge of counting and depositing cash holdings) for committing fraud, according to the fraud triangle theory. Rationalization is not mentioned in the scenario.

Question 18

It important that enterprise risk management (ERM)and strategy setting are integrated because:

Accepted Answer

Integrating ERM and strategy setting ensures that strategies are developed in alignment with the organization's mission, vision, and risk profiles, including considering the inherent, ethics, and mindset risks. This holistic approach helps in making informed decisions and in achieving strategic objectives effectively.

Question 19

An employee who thinks he is being treated unfairly because he is regularly working unpaid overtime urgently needs some extra cash. According to the fraud triangle, this situation likely constitutes:

Accepted Answer

The fraud triangle consists of three elements that contribute to fraudulent behavior: motive (the need for committing fraud), opportunity (the situation that makes it possible to commit fraud), and rationalization (the justification of the fraudulent behavior). In this scenario, the employee's belief of being treated unfairly and the urgent need for extra cash serve as the motive, and the justification for potentially fraudulent behavior (e.g., stealing or falsifying time records for extra pay) serves as the rationalization. Opportunity is not explicitly mentioned in the scenario.

Question 20

What is the recommended strategy when stakeholders' potential for threat is low and the stakeholders' potential for cooperation is high?

Accepted Answer

When stakeholders have a low potential for threat and a high potential for cooperation, involving them in the project or decision-making process is recommended. This approach leverages their willingness to cooperate and can lead to more successful outcomes by incorporating their insights and support.

Quiz 7: Managing Ethics Risks Opportunities