Do to others as you would have everyone do
The best restatement of Kant's categorical imperative is:
Ethical Egoism
According to this theory, each person is so constituted that they will look out only for their own interests:
Is impossible to foresee and measure all consequences
Many critics say the biggest fault with utilitarianism is that it:
Utilitarianism
Cheating might be rationalized using which ethical theory
Deontology
The motive of "duty" is most associated with:
Utilitarianism
Your manager asks you to "cook the books" to make the company look better for a bank that your company is trying to get a loan through. The manager stresses that nothing and no one will be harmed because the company will come out on top, the shareholders
Individuals are entitled to certain rights such as freedom of speech, conscience, consent, privacy, and due process
The rights theory emphasizes:
The principle of utility
Choosing the action with the best overall consequences for everyone concerned is an example of:
Rule utilitarian
Utilitarian philosophers are divided into two types: act utilitarian and:
Consequences
When applying Utilitarianism to judge actions, what is the only thing that matters?
Deontology or Virtue Ethics
Which theory is based on doing what is right despite the consequences?
Fair, but honest evaluations
When an employee is given a job evaluation, he has a right to expect:
Virtue
Aristotle defined ________ as a trait of character manifested in habitual action.
Fairness to others
Role expectation or approval from others is a motive for doing right in which state of Kohlberg's moral reasoning?
Moral expectations
Rest's component of moral model includes all but:
Being able to identify an ethical situation
Moral sensitivity can be summarized as:
Stages 3 & 4
A research study in the 1990s indicates that CPAs reason at which of Kohlberg's stages?
Most cultures, religions, and societies have a form of the golden rule
What is an argument against the theory of ethical relativism?
There are no universal moral standards
What is a true statement if theory of relativism is accepted?
Pre-Conventional
Richard does his homework as soon as he gets home from school because of fear that his mother will not allow him to go outside. Which stage of Kohlberg's moral development is Richard?
Principles of right and wrong
To what does moral philosophy refer?
Internal Rewards
Virtue ethics emphasize development of good habits of character. What should be the greatest reward of practicing good habits of character, according to MacIntyre?
Increase profits
Milton Friedman suggests that the only responsibility of a company is to:
Stage 3
At which stage of Kohlberg's view on ethical development is an individual's actions influenced by group norms?
Get the facts surrounding the problem
What should the first step in decision making when faced with an ethical dilemma?
Reflect on your decision
In an ethical decision making model, the final step is:
External Governance, Internal Governance, Mandated Governance
What are the three points on the corporate governance triangle?
Lenders
Of the following monitors of management behavior, which one has the strongest direct influence on the choices firm managers make?
Tip
By which means were most frauds reported or discovered, according to the survey conducted by the ACFE?
Information asymmetry
What is a cause of agency problems?
It saves the organization assets
Which of the following is not a key element of occupational fraud scheme?
Responsibility, accountability, fairness and transparency
What are the four pillars of corporate governance (according to our textbook)?
Credo
What is an inspirational short statement on key values?
Safeguard the interests of the company's stakeholders
What are the fiduciary obligations of the board of directors?
Employee involvement in local politics
Which of the following is not an approach for governing corporations in the interests of employees?
Producing relevant and reliable financial statements
What is the goal of financial accounting in association with business?
A corporate code of ethics for senior managers
An example of internal corporate governance for a public firm is:
Principals hire agents because they are experts at something
Which of the following is true about Agency Theory?
CPA's distant cousin
Which of the following relationships would not impair the independence of a CPA doing attest service, according to Interpretation 101-1?
Public, Profession, Employer, Client, Individual
Which is the correct order of responsibility to stakeholders an accountant should consider when facing a difficult decision?
State Board of Accountancy
Who gives the right to practice as a CPA?
PCAOB
Who gives the right to audit public corporations?
Those CPAs in public accounting, industry, government, and education
To whom do the codes of professional conduct apply?
Have I retained my integrity?
Integrity is a measure in terms of what is right and just. What is a question that a CPA can ask to test decisions?
Not misleading or deceptive
Advertising is permitted by CPAs as long as it is:
Tone at the top
What is the most important system to prevent fraudulent financial reporting?
Accept responsibility for results of the services
Which of the following must a client agree to perform in connection with nonattest engagements so as not to impair the independence of the attest engagement?
Car loan collateralized by the car
Which of the following is a permitted loan to a CPA from an audit client financial institution?
Opinion shopping
Which of the following is a threat that a client can use to impair independence?
To stop a crime from happening
AICPA rule 301 specifically relates to a CPA's responsibility with regard to client confidentiality. Which of the following is not one of the allowed reasons a CPA can break client confidentiality
Auditor's consideration of materiality is influenced by the auditor's perception of the need of the readers of the financial statements
Which of the following is not correct about materiality?
Follow the chain of command of XYZ to see that her concerns are dealt with
Susie is an auditor with XYZ Audit firm. The Senior Audit member has told her that all fieldwork must be completed by the end of the week. Susie knows that corners have been cut and certain tests not completed due to the time constraints. The integrity of
Consulting improves profitability
Why did audit firms attempt to do so much consulting business for their clients?
Absolute assurance that financial statements are free of material misstatement
What does the investing public expect of auditors?
Incorporates enhanced corporate governance into internal control principles
The framework of COSO Enterprise Risk Management is to:
Expectations
The ____________ gap describes the difference between what the public and an auditor perceive as the responsibilities of auditors
Identifies the management's responsibilities for the statements
Which of the following is an element of the introductory paragraph of an auditor's report?
Loyalty to company versus adherence to ethical standards
What are dual obligations of the controller which may create ethical dilemmas?
The company's fraud tip hotline
Which is not a link of the chain of command that the controller should inform of a material misstatement in the financial statements?
Difference of opinion with management on a material application of accounting standards
Which of the following is a reason for an auditor to issue a qualified opinion?
The required standards apply to all public companies
Which of the following is true about PCAOB audit standards?
Risks of errors
Which of the following is not a component of internal control?
Common law
The legal precedent that evolves from legal opinions issued by judges in deciding a case and guides judges in deciding similar cases in the future is referred to as:
A party has a contractual obligation
A privity relationship means that:
Expands an accountant's legal liability to third parties identified by the client as intended recipients of work
The Restatement (Second) of Torts Approach:
Constructive Fraud
When an auditor acts so carelessly in the application of professional standards that it implies a reckless disregard for the standards of due care is referred to as:
Formalizes the relationship between the auditor and the client for a specific engagement
An audit engagement letter:
Physical inspection of inventory was not performed by the auditors
The executives of McKesson and Robbins Pharmaceuticals were able to steal around $2.9 million in 1939 because:
The auditor cites adherence to generally accepted auditing standards (GAAS)
Which of the following would normally be considered sufficient to demonstrate due care on the part of the auditor?
All possible third party users of financial statements must be anticipated
The Rosenblum case worried members of the accounting profession because it implied that:
The identity of the third party must be directly known to the auditor
The Credit Alliance v Arthur Andersen & Co. case established three tests that must be satisfied for holding auditors liable for negligence to third parties. All of the following are tests described EXCEPT:
Accountants may be liable for fraud even when they had no knowledge of deceit
When courts find accountants liable for constructive fraud, the implication is that:
Failing to secure the audit plan
Auditors deserve the most blame in failing to uncover fraud in the Equity Funding case for:
The company's board of directors
Under the Private Securities Litigation reform Act, if an auditor concludes that an illegal act with a material effect on the financial statement has been reported to, but not dealt with by senior management, the auditor should then report its conclusions
Auditors may restrict the dissemination of financial information
According to Robert Mednick, if an auditor's legal liability remains unchecked,