Question 1

Passed by Congress in 1991, the _____ created incentives for organizations to develop and implement ethical compliance programs.

Accepted Answer

The Federal Sentencing Guidelines for Organizations were passed by Congress in 1991 and created incentives for organizations to develop and implement ethical compliance programs. The guidelines provide a framework for organizations to establish a culture of ethical behavior and to demonstrate commitment to compliance with the law. Organizations that demonstrate effective compliance programs can receive reduced fines and penalties in the event of a violation. The other choices listed, such as the Sarbanes-Oxley Act and the U.S. Sentencing Commission's Guidelines for Ethical Compliance, are also relevant to ethics and compliance but were not specifically passed in 1991 to create incentives for ethical compliance programs.

Question 2

The _____ of ethics involves embedding values, norms, and artifacts in organizations, industries, and society.

Accepted Answer

The process of embedding values, norms, and artifacts in organizations, industries, and society is known as institutionalization of ethics. This involves creating a culture of ethics and social responsibility where individuals and organizations are motivated to act in ways that are morally and socially responsible. The institutionalization of ethics helps to promote ethical behavior and prevent unethical conduct by establishing norms, rules, and standards that guide behavior in organizations and society as a whole.

Question 3

An ethical organizational culture creates an environment in which to structure behavior that is then evaluated by stakeholders. The key elements of an organizational culture include all of the following except

Accepted Answer

The key elements of an organizational culture include values (beliefs, principles, and philosophies), norms (unwritten rules for behavior), artifacts (tangible manifestations of culture), and behavior (observable actions of individuals within the organization). However, employee compensation, while important, is not considered a key element of organizational culture.

Question 4

Which of the following is not a reason why the institutionalization of business ethics has progressed in recent decades?

Accepted Answer

Institutionalization of ethics is not mandated for all organizations by governments around the world. While some countries have introduced legislation requiring ethical standards, it is not a universal mandate.

Question 5

Which of the following provide incentives for developing core practices within a firm that could help ensure ethical and legal compliance?

Accepted Answer

The Federal Sentencing Guidelines for Organizations, Sarbanes-Oxley Act, and Dodd-Frank Act all provide incentives for developing core practices within a firm that could help ensure ethical and legal compliance. The Federal Sentencing Guidelines provide a framework for organizations to implement effective compliance and ethics programs, while the Sarbanes-Oxley Act and Dodd-Frank Act have specific provisions that require companies to establish internal controls and whistleblower protection programs. Together, these measures encourage companies to prioritize compliance and act ethically to avoid legal and reputational harm.

Question 6

Some, especially those in business, complain that the Sarbanes-Oxley Act and similar legislation

Accepted Answer

Many in business complain that the Sarbanes-Oxley Act and similar legislation is excessively complex and financially burdensome.

Question 7

Laws and regulations change over time; however, in the United States the thrust of most business legislation can be summed up as

Accepted Answer

Many business regulations in the United States are aimed at protecting competition and preventing harm to consumers and society. While some practices may be permitted, those that substantially reduce competition and harm consumers may be prohibited.

Question 8

Which of the following is one of the seven steps that the U.S. Sentencing Commission requires for an effective compliance program?

Accepted Answer

The U.S. Sentencing Commission requires that an effective compliance program include oversight by high-ranking personnel, as this helps to ensure that the program is taken seriously and supported throughout the organization. The other options listed (A, C, D, E) are not part of the commission's requirements for an effective compliance program.

Question 9

____________ must be trusted to make business work properly and includes accountants.

Accepted Answer

Gatekeepers are individuals or entities responsible for ensuring the proper functioning and integrity of business operations. This includes accountants, who play a crucial role in managing financial records and ensuring compliance with relevant laws and regulations. Trust in gatekeepers is essential for maintaining the trust of investors, customers, and other stakeholders in a business.

Question 10

How do violations of the law usually start?

Accepted Answer

Violations of the law often start when businesspeople stretch the limits of ethical standards. They may engage in behavior that is not technically illegal but is morally questionable, and this can eventually lead to outright violations of the law. It is important for organizations to have strong ethical codes and encourage employees to adhere to them to prevent such violations.

Question 11

Companies that _____ will most likely be found in violation of procompetitive legislation.

Accepted Answer

Procompetitive legislation refers to laws and regulations that promote fair competition in the market and prevent anti-competitive practices. Establishing a monopoly, where a single company controls a large share of the market, can lead to limited competition and harm consumers, as well as smaller businesses. Therefore, companies that establish monopolies are more likely to be in violation of procompetitive legislation.

Question 12

Which of the following laws instituted a whistle-blower bounty program in which whistle-blowers are eligible to receive 10 to 30 percent of fines if their reports result in convictions of more than $1 million in penalties?

Accepted Answer

The Dodd-Frank Act, enacted in 2010, instituted a whistle-blower bounty program that offers financial incentives to individuals who report violations of securities laws to the Securities and Exchange Commission (SEC). Whistle-blowers can receive 10-30% of the fines collected from the wrongdoer if their reports result in sanctions of over $1 million.

Question 13

_____ tie(s) an organization's product(s) directly to a social concern through a marketing program.

Accepted Answer

Cause-related marketing is a strategy in which an organization's product(s) are directly linked to a social concern through a marketing program. The organization donates a portion of product sales or revenue to a designated social cause, thereby associating its brand with the cause and generating goodwill among consumers who care about the issue.

Question 14

Title VII of the Civil Rights Act of 1964

Accepted Answer

Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, sex, religion, or national origin. This law is a landmark civil rights legislation that has played a significant role in eliminating discriminatory practices in the workplace and promoting equal opportunity. B, C, and D are incorrect because they are not related to Title VII of the Civil Rights Act of 1964. E is partially correct, as Title VII also prohibits gender-based discrimination, including pay discrimination based on gender. However, this option is not the best answer because it is too specific and does not cover all the protected characteristics under Title VII.

Question 15

Cause-related marketing can affect consumer _____, if consumers are sympathetic to the cause and the brand and cause are seen as a good fit.

Accepted Answer

Cause-related marketing can affect consumer buying patterns if consumers are sympathetic to the cause and the brand and cause are seen as a good fit.

Question 16

_____ responsibilities relate to a business's contributions to stakeholders.

Accepted Answer

The answer of _____ responsibilities relate to a business's contributions...

Question 17

The Sarbanes-Oxley Act created the _____ to oversee the accounting firms that audit public corporations and to establish rules and standards for auditing.

Accepted Answer

The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) to oversee the accounting firms that audit public corporations and to establish rules and standards for auditing. The other options listed do not pertain to the oversight of public company accounting and auditing.

Question 18

A major purpose of the Federal Sentencing Guidelines for Organizations, the Sarbanes-Oxley Act, and the Dodd-Frank Act is to

Accepted Answer

The Federal Sentencing Guidelines for Organizations, the Sarbanes-Oxley Act, and the Dodd-Frank Act all aim to encourage employees to report misconduct by providing incentives and protections for whistleblowers. This is intended to prevent unethical and illegal behavior within organizations and increase accountability.

Question 19

By prohibiting accounting firms from providing both auditing and consulting services to the same corporate clients without permission, the Sarbanes-Oxley Act is attempting to eliminate

Accepted Answer

The prohibition of accounting firms from providing both auditing and consulting services to the same corporate clients without permission aims to eliminate conflicts of interest. This is because if the same firm provides both services, they may prioritize consulting over auditing to maintain their relationship with the client, potentially compromising the independence and objectivity needed for auditing. The act aims to ensure that firms are not influenced by potential consulting revenue when providing audit services.

Question 20

Donation of computer equipment to schools by Toshiba would be associated with _____ responsibilities.

Accepted Answer

Voluntary responsibilities refer to actions taken by a company that go beyond legal and economic obligations, often to benefit society or the community, such as donating equipment to schools.

Quiz 4: The Institutionalization of Business Ethics