Ch. 3 Other

In the Pinto case, Ford relied on which approaches to ethical reasoning to decide on a course of action with respect to the faulty gas tank placement:
A. Egoism and utilitarianism
B. Enlightened egoism and rights theory
C. Ethical legalism and utilitarian

C. Ethical legalism and utilitarianism

Each of the following is an ethical issue in business except for:
A. Honesty and fairness
B. Independence
C. Conflicts of interest
D. Fraud

B. Independence

The seven signs of a pending ethical collapse include all but:
A. Pressure to make numbers
B. Whistleblowing hotline
C. Bigger than life CEO
D. Doing good in the community

B. Whistleblowing hotline

Fraud can be defined as:
A. A deliberate misrepresentation to gain an advantage over another party
B. A cover-up of a mistake made in the financial statements
C. An error in preparing financial statements
D. All of these

A. A deliberate misrepresentation to gain an advantage over another party

The motivating factor for Sears to charge customers for repairs that were not needed was:
A. Cover a loss from its business operations
B. Greed
C. Build up certain segments of its business
D. All of these

B. Greed

In the Ethical Dissonance Model, a high person-organization fit requires:
A. High organizational ethics, low individual ethics
B. High organizational ethics, high individual ethics
C. Low organizational ethics, high individual ethics
D. Low organizational

B. High organizational ethics, high individual ethics

Assume you are an ethical person and feel uncomfortable about the way your company is reporting earnings. You believe it is deliberately overstated. If you want to bring your concerns to upper management, in which person-organization fit is it most likely

D. High organizational ethics, high individual ethics

A unique aspect of occupational fraud is:
A. The misuse of company assets
B. The falsification of financial statements
C. The failure to disclose full and complete information
D. All of these

A. The misuse of company assets

According to the 2012 Global Fraud Study of the ACFE, which fraud scheme posed the greatest risks to organizations throughout the world:
A. Corruption and billing schemes
B. Improper use of social media
C. Illegal facilitating payments
D. Economic extorti

A. Corruption and billing schemes

According to the 2012 Global fraud Study of the ACFE, the most common method of initial detection of occupational fraud is:
A. Internal audit
B. Management review
C. External audit
D. Tip

D. Tip

Internal control over financial reporting includes each of the following elements except for:
A. Maintaining accurate financial records
B. Providing reasonable assurance that receipts and expenditures are recorded based on proper authorization by manageme

C. External audit conducted in accordance with generally accepted auditing standards

Each of the following is a pillar of corporate governance except for:
A. Responsibility
B. Accountability
C. Fairness
D. Independence

D. Independence

The corporate governance system includes each of the following elements except for:
A. Board of directors
B. Internal controls
C. Executive compensation policies
D. Monitoring by top management

D. Monitoring by top management

The Agency Theory can best be described as:
A. The relationship between top management and the board of directors
B. The relationship between the board of directors and shareholders
C. The relationship between top management and the board of directors, an

C. The relationship between top management and the board of directors, and shareholders

Agency costs refer to:
A. The costs incurred in monitoring managerial performance
B. The costs incurred because there is information asymmetry between the corporation and outsiders
C. The costs incurred because insiders know more about a company than do o

D. All of these

Backdating of stock options is unethical because:
A. It favors top executives over other company employees with respect to the number of options
B. It purposefully manipulates the option criteria that determine their value
C. It changes the exercise price

B. It purposefully manipulates the option criteria that determine their value

The term disgorgement means:
A. To give up one's meal after eating
B. To return profits earned illegally
C. To return ill-gotten gains
D. To give up one's board position after a fraud incident

C. To return ill-gotten gains

The stakeholder view emphasizes the obligations of management to:
A. The shareholders
B. The shareholders and creditors
C. All parties impacted by corporate decisions in a significant way
D. The board of directors

C. All parties impacted by corporate decisions in a significant way

The fiduciary duty of the board of directors includes all of the following except for:
A. Safeguarding corporate assets
B. Promoting shareholder interests
C. Exercising care in carrying out their responsibilities
D. Representing the interests of all stake

D. Representing the interests of all stakeholders

The level of care expected of a reasonable person under similar circumstances in meeting one's fiduciary duty is called:
A. Duty of loyalty
B. Duty of care
C. Transparency
D. All of these

B. Duty of care

Under the Sarbanes-Oxley Act, which of the following bodies must contain members that are 100% independent of management?
A. Board of directors
B. Audit committee
C. Internal auditors
D. All of these

B. Audit committee

To ensure audit committee independence, the committee should meet separately with each of the following groups except for:
A. Senior executives
B. Internal auditors
C. External auditors
D. The audit committee should meet separately with all of these

D. The audit committee should meet separately with all of these

One failure with respect to the internal controls at Tyco and Adelphia was:
A. Falsification of bank statement balances
B. Top executives manipulated financial statement amounts
C. Top executives used hundreds of millions of dollars from interest-free loa

C. Top executives used hundreds of millions of dollars from interest-free loans for personal purposes

An ethical corporate culture can best be established by:
A. Setting a proper tone at the top
B. Establishing strong internal controls
C. Having an effective internal audit function
D. All of these

D. All of these

Strong corporate governance relies on a strong board of directors. Which of the following would be a strong candidate to be a board director for XYZ, Inc.?
A. Community member who has already served on the board 15 years.
B. Investor who has a multi-milli

C. Retired controller of a Fortune 1000 company.

The ethical dissonance model looks at the ethical fit of the organizational and individual values. The optimal fit for an individual with high individual ethics would be:
A. High-High
B. High-Low
C. Low-High
D. Low-Low

A. High-High

A strong and effective internal control environment can be enhanced by:
A. Financial statements that present fairly financial position and results of operations
B. Giving the internal auditors direct and unrestricted access to the audit committee
C. Havin

B. Giving the internal auditors direct and unrestricted access to the audit committee

The Institute of Internal Auditors Code of Ethics includes each of the following principles except for:
A. Integrity
B. Objectivity
C. Independence
D. Confidentiality

C. Independence

Section 302 of the Sarbanes-Oxley Act requires that management:
A. Assess the company's internal controls
B. Certify the financial statements
C. Disclose all executive compensation
D. All of these

B. Certify the financial statements

Each of the following is part of the New York Stock Exchange listing requirements except for:
A. All directors must be independent of management
B. Audit committees must consist of at least three members all of whom are independent of management and the e

A. All directors must be independent of management

A troubling result of the 2011 National Business Ethics Survey is:
A. Increased witnessing of misconduct in the workplace.
B. Decline in pressure to compromise ethics.
C. Increased rate of retaliation against whistleblowers.
D. Decline in negative view of

C. Increased rate of retaliation against whistleblowers.

A seemingly positive result of the 2011 National Business Ethics Survey is:
A. The percentage of employees who had reported misconduct at work is increasing
B. Pressure to compromise ethical standards has been decreasing
C. The rate of retaliation against

A. The percentage of employees who had reported misconduct at work is increasing

A unique aspect of Johnson & Johnson's Credo is that it:
A. It is an aspirational statement rather than the typical "thou shalt not" form of a code of ethics
B. It encourages employees to internalize the values of the company
C. It follows a stakeholder a

D. All of these

The 2011 National Business Ethics Survey indicates each of the following with respect to how employees view the ethics and ethical practices of organizations they work for except for:
A. Misconduct at work has declined over the years
B. Whistleblowing is

C. Ethical cultures are weaker

With respect to whistleblowing, the Sarbanes-Oxley Act:
A. Protects employees of publicly traded companies who provide evidence in fraud cases
B. Confers legal protection on managers who reported wrongdoing by top executives
C. Confers legal protection on

A. Protects employees of publicly traded companies who provide evidence in fraud cases

A reason that Bernie Madoff was able to pull off the Ponzi scheme for so long was:
A. He was trusted by those who invested with him
B. The SEC failed to act on tips about Madoff's questionable practices
C. The auditors either looked the other way or didn'

D. All of these.

As a manager in her firm, Lucy concerns herself with the effectiveness of internal controls. Her main focus is how efficient and effective the company's internal controls are over time. Which component of internal control is Lucy engaging in?
A. Risk asse

D. Monitoring

The COSO report states that management should enact five components related to internal control objectives including each of the following except for:
A. Control environment
B. Risk assessment
C. Risk activities
D. Monitoring

C. Risk activities

What are the fiduciary obligations of the board of directors?
A. Maximize profits for the company and its shareholders
B. Give excessive executive compensation
C. Safeguard the organization's resources and interests of the company's stakeholders
D. Allow

C. Safeguard the organization's resources and interests of the company's stakeholders

Which of the following is not an ethical issue in business?
A. Conflicts of interest
B. Maximization of profits
C. Discrimination
D. Information technology

B. Maximization of profits

Financial statement fraud includes all but:
A. Overstating revenues.
B. Understating expenses.
C. Overstating warranties on new product.
D. Improper asset valuations.

C. Overstating warranties on new product.

Which is a questionable ethical work behavior of an employee?
A. Handing in all assignments on time.
B. Taking time off without pay to attend to a family crisis.
C. Using social media during the work day to update your Facebook page.
D. Giving your best e

C. Using social media during the work day to update your Facebook page.

What are the four pillars of corporate governance?
A. Respect, accountability, fairness and transparency.
B. Responsibility, accountability, firmness and transparency.
C. Responsibility, accountability, fairness and transparency.
D. Respect, accountabilit

C. Responsibility, accountability, fairness and transparency.

What is the agency problem?
A. Managers place corporate goals ahead of personal goals.
B. Managers place personal goals ahead of corporate goals.
C. Managers place social goals ahead of personal goals.
D. Managers place corporate goals ahead of social goa

B. Managers place personal goals ahead of corporate goals.

What is a cause of agency problems?
A. Information asymmetry
B. Information symmetry
C. Information technology
D. Information privacy

A. Information asymmetry

Which of the following is not used to overcome the agency problem?
A. Executive compensation
B. Audited financial statements
C. Related party transactions
D. Internal controls

C. Related party transactions

Compensation of executives has soared over the last forty plus years to more than 400 times the pay for average workers. Suggested remedies to rein in executive compensation especially during time of corporate wrongdoing include each of the following exce

C. Limits on executive compensation

The 2010 Dodd-Frank Act includes additional incentives for whistleblowers. What is the act's effect on whistleblowing by accountants?
A. No accountant, internal or external, whether by job title or certification may receive a reward.
B. All accountants wh

D. A CPA may report a violation of a public accounting firm's performance in an audit.

One of the duties of a board of directors is to protect the interests of stakeholders. Which of the following is an example of protecting such interests?
A. Back dating options for executives
B. Deceptive business practices
C. Off balance sheet financing

D. Transparent financial reporting

The relationship between the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy and rule of law is known as
A. Code of ethics
B. Corporate sustainability
C. Corporate responsibility
D. Corporat

D. Corporate governance

The aim of executive compensations is to:
A. Enrich the executive
B. Align the goals of the executive with the workers
C. Align the goals of the executive with the shareholders
D. Enrich the company

C. Align the goals of the executive with the shareholders

The most important values included in corporate values statements include:
A. Pursuit of self-interests
B. Commitment to beating the competition
C. Diversity
D. Integrity and ethical behavior

D. Integrity and ethical behavior

What is a university's equivalent of a code of ethics?
A. Honor code
B. Student Handbook
C. Faculty Handbook
D. Statement of Values

A. Honor code

To whom does the management owe its ultimate allegiance?
A. Employees
B. Creditors
C. Shareholders
D. Government

C. Shareholders

A code of ethics for financial professionals is important under Sarbanes-Oxley because:
A. It strengthens the relationship between financial professionals and shareholders
B. It supports the certification of financial statement requirement
C. It decreases

B. It supports the certification of financial statement requirement

A similarity between the Bernie Madoff situation and that of R. Allen Stanford is they both were:
A. The head of a major U.S. stock exchange
B. The CEO of a company that went out of business after a major financial statement fraud
C. Involved in Ponzi sch

C. Involved in Ponzi schemes

Henry is the chief accounting office of XYZ Co. He believes the financial statements are accurate but he has been asked by the CFO to accelerate the recording of revenue at the end of the year to push a material amount that should be reported next year in

C. Discuss the matter with the CEO

An ethical organization incorporates what into their decision-making process:
A. Core values
B. Strategic policies
C. Reporting responsibilities
D. All of these

D. All of these

The Act that enables a whistleblower to receive compensation for blowing the whistle if the claims are deemed to be valid and the individual is not precluded from receiving such an award is:
A. The Sarbanes-Oxley Act
B. The Foreign Corrupt Practices Act
C

D. The Dodd-Frank Financial Reform Act

The primary ethical concern when contemplating whistleblowing as an accountant is:
A. It may violate my ethical obligations
B. It may fail to correct the matter
C. It may not be considered ethical by my employer
D. All of these

A. It may violate my ethical obligations

In the Parable of Sadhu case, Bowen T. MCoy's friend Steve summed up the dilemma by saying:
A. I feel that what happened with the sadhu is a good example of the breakdown between ethics in different cultures
B. I feel that what happened with the sadhu is

B. I feel that what happened with the sadhu is a good example of the breakdown between the individual and corporate ethics

In the Amgen case, former employees, Shawn O'Brien and Kassie Westmoreland, sued the company for:
A. Wrongful termination
B. Fraudulent actions
C. Discrimination
D. Retaliation

D. Retaliation

The primary ethical issue in United Thermostatic Controls is:
A. Misappropriation of corporate assets
B. Accelerating the recording of revenue into an earlier period
C. Delaying the recording of expenses into a later period
D. Failure to fully disclose al

B. Accelerating the recording of revenue into an earlier period

An important issue in the Hewlett Packard pretexting case was:
A. Using false pretenses to obtain confidential information about members of the board of directors
B. Disclosing confidential client information without the approval of the client
C. Producin

A. Using false pretenses to obtain confidential information about members of the board of directors

The IRS whistleblowing Case deals with
A. Ethics of retaliation
B. Professional whistleblowing for gain
C. Revenge whistleblowing
D. Ethics of whistleblowing

B. Professional whistleblowing for gain

The Bennie and the Jets case deals with:
A. Proper income classification of rebates received from insurers
B. Accelerating revenues
C. Delaying expenses
D. Failing to record rebates from insurers

B. Accelerating revenues

A major allegation in the XTO Energy case was the:
A. Insider trading
B. Violation of FCPA
C. Breach of fiduciary duties by board of directors
D. Retaliation of whistleblower

C. Breach of fiduciary duties by board of directors

In the Bhopal case, in evaluating its exposure to possible future liability due to technology failures, Union Carbide used which of the following concepts:
A. Professional skepticism
B. Business risk
C. Cost-benefit analysis
D. Rights Theory

B. Business risk

The case of Steve Jobs's Health deals with:
A. Disclosure issues beyond financial information
B. Disclosures required of members of board of directors
C. Fiduciary obligations of a CEO
D. Fiduciary obligations of a board of directors

A. Disclosure issues beyond financial information

An important issue in the HP case with "event hostess" Jodie Fisher is:
A. Conflict of interest of Mark Hurd
B. Alleged sexual harassment of Jodi Fisher
C. Disclosure of confidential client information by Hurd to Fisher
D. All of these

D. All of these

In the Pinto case, Ford relied on which approaches to ethical reasoning to decide on a course of action with respect to the faulty gas tank placement:
A. Egoism and utilitarianism
B. Enlightened egoism and rights theory
C. Ethical legalism and utilitarian

C. Ethical legalism and utilitarianism

Each of the following is an ethical issue in business except for:
A. Honesty and fairness
B. Independence
C. Conflicts of interest
D. Fraud

B. Independence

The seven signs of a pending ethical collapse include all but:
A. Pressure to make numbers
B. Whistleblowing hotline
C. Bigger than life CEO
D. Doing good in the community

B. Whistleblowing hotline

Fraud can be defined as:
A. A deliberate misrepresentation to gain an advantage over another party
B. A cover-up of a mistake made in the financial statements
C. An error in preparing financial statements
D. All of these

A. A deliberate misrepresentation to gain an advantage over another party

The motivating factor for Sears to charge customers for repairs that were not needed was:
A. Cover a loss from its business operations
B. Greed
C. Build up certain segments of its business
D. All of these

B. Greed

In the Ethical Dissonance Model, a high person-organization fit requires:
A. High organizational ethics, low individual ethics
B. High organizational ethics, high individual ethics
C. Low organizational ethics, high individual ethics
D. Low organizational

B. High organizational ethics, high individual ethics

Assume you are an ethical person and feel uncomfortable about the way your company is reporting earnings. You believe it is deliberately overstated. If you want to bring your concerns to upper management, in which person-organization fit is it most likely

D. High organizational ethics, high individual ethics

A unique aspect of occupational fraud is:
A. The misuse of company assets
B. The falsification of financial statements
C. The failure to disclose full and complete information
D. All of these

A. The misuse of company assets

According to the 2012 Global Fraud Study of the ACFE, which fraud scheme posed the greatest risks to organizations throughout the world:
A. Corruption and billing schemes
B. Improper use of social media
C. Illegal facilitating payments
D. Economic extorti

A. Corruption and billing schemes

According to the 2012 Global fraud Study of the ACFE, the most common method of initial detection of occupational fraud is:
A. Internal audit
B. Management review
C. External audit
D. Tip

D. Tip

Internal control over financial reporting includes each of the following elements except for:
A. Maintaining accurate financial records
B. Providing reasonable assurance that receipts and expenditures are recorded based on proper authorization by manageme

C. External audit conducted in accordance with generally accepted auditing standards

Each of the following is a pillar of corporate governance except for:
A. Responsibility
B. Accountability
C. Fairness
D. Independence

D. Independence

The corporate governance system includes each of the following elements except for:
A. Board of directors
B. Internal controls
C. Executive compensation policies
D. Monitoring by top management

D. Monitoring by top management

The Agency Theory can best be described as:
A. The relationship between top management and the board of directors
B. The relationship between the board of directors and shareholders
C. The relationship between top management and the board of directors, an

C. The relationship between top management and the board of directors, and shareholders

Agency costs refer to:
A. The costs incurred in monitoring managerial performance
B. The costs incurred because there is information asymmetry between the corporation and outsiders
C. The costs incurred because insiders know more about a company than do o

D. All of these

Backdating of stock options is unethical because:
A. It favors top executives over other company employees with respect to the number of options
B. It purposefully manipulates the option criteria that determine their value
C. It changes the exercise price

B. It purposefully manipulates the option criteria that determine their value

The term disgorgement means:
A. To give up one's meal after eating
B. To return profits earned illegally
C. To return ill-gotten gains
D. To give up one's board position after a fraud incident

C. To return ill-gotten gains

The stakeholder view emphasizes the obligations of management to:
A. The shareholders
B. The shareholders and creditors
C. All parties impacted by corporate decisions in a significant way
D. The board of directors

C. All parties impacted by corporate decisions in a significant way

The fiduciary duty of the board of directors includes all of the following except for:
A. Safeguarding corporate assets
B. Promoting shareholder interests
C. Exercising care in carrying out their responsibilities
D. Representing the interests of all stake

D. Representing the interests of all stakeholders

The level of care expected of a reasonable person under similar circumstances in meeting one's fiduciary duty is called:
A. Duty of loyalty
B. Duty of care
C. Transparency
D. All of these

B. Duty of care

Under the Sarbanes-Oxley Act, which of the following bodies must contain members that are 100% independent of management?
A. Board of directors
B. Audit committee
C. Internal auditors
D. All of these

B. Audit committee

To ensure audit committee independence, the committee should meet separately with each of the following groups except for:
A. Senior executives
B. Internal auditors
C. External auditors
D. The audit committee should meet separately with all of these

D. The audit committee should meet separately with all of these

One failure with respect to the internal controls at Tyco and Adelphia was:
A. Falsification of bank statement balances
B. Top executives manipulated financial statement amounts
C. Top executives used hundreds of millions of dollars from interest-free loa

C. Top executives used hundreds of millions of dollars from interest-free loans for personal purposes

An ethical corporate culture can best be established by:
A. Setting a proper tone at the top
B. Establishing strong internal controls
C. Having an effective internal audit function
D. All of these

D. All of these

Strong corporate governance relies on a strong board of directors. Which of the following would be a strong candidate to be a board director for XYZ, Inc.?
A. Community member who has already served on the board 15 years.
B. Investor who has a multi-milli

C. Retired controller of a Fortune 1000 company.

The ethical dissonance model looks at the ethical fit of the organizational and individual values. The optimal fit for an individual with high individual ethics would be:
A. High-High
B. High-Low
C. Low-High
D. Low-Low

A. High-High

A strong and effective internal control environment can be enhanced by:
A. Financial statements that present fairly financial position and results of operations
B. Giving the internal auditors direct and unrestricted access to the audit committee
C. Havin

B. Giving the internal auditors direct and unrestricted access to the audit committee

The Institute of Internal Auditors Code of Ethics includes each of the following principles except for:
A. Integrity
B. Objectivity
C. Independence
D. Confidentiality

C. Independence

Section 302 of the Sarbanes-Oxley Act requires that management:
A. Assess the company's internal controls
B. Certify the financial statements
C. Disclose all executive compensation
D. All of these

B. Certify the financial statements

Each of the following is part of the New York Stock Exchange listing requirements except for:
A. All directors must be independent of management
B. Audit committees must consist of at least three members all of whom are independent of management and the e

A. All directors must be independent of management

A troubling result of the 2011 National Business Ethics Survey is:
A. Increased witnessing of misconduct in the workplace.
B. Decline in pressure to compromise ethics.
C. Increased rate of retaliation against whistleblowers.
D. Decline in negative view of

C. Increased rate of retaliation against whistleblowers.

A seemingly positive result of the 2011 National Business Ethics Survey is:
A. The percentage of employees who had reported misconduct at work is increasing
B. Pressure to compromise ethical standards has been decreasing
C. The rate of retaliation against

A. The percentage of employees who had reported misconduct at work is increasing

A unique aspect of Johnson & Johnson's Credo is that it:
A. It is an aspirational statement rather than the typical "thou shalt not" form of a code of ethics
B. It encourages employees to internalize the values of the company
C. It follows a stakeholder a

D. All of these

The 2011 National Business Ethics Survey indicates each of the following with respect to how employees view the ethics and ethical practices of organizations they work for except for:
A. Misconduct at work has declined over the years
B. Whistleblowing is

C. Ethical cultures are weaker

With respect to whistleblowing, the Sarbanes-Oxley Act:
A. Protects employees of publicly traded companies who provide evidence in fraud cases
B. Confers legal protection on managers who reported wrongdoing by top executives
C. Confers legal protection on

A. Protects employees of publicly traded companies who provide evidence in fraud cases

A reason that Bernie Madoff was able to pull off the Ponzi scheme for so long was:
A. He was trusted by those who invested with him
B. The SEC failed to act on tips about Madoff's questionable practices
C. The auditors either looked the other way or didn'

D. All of these.

As a manager in her firm, Lucy concerns herself with the effectiveness of internal controls. Her main focus is how efficient and effective the company's internal controls are over time. Which component of internal control is Lucy engaging in?
A. Risk asse

D. Monitoring

The COSO report states that management should enact five components related to internal control objectives including each of the following except for:
A. Control environment
B. Risk assessment
C. Risk activities
D. Monitoring

C. Risk activities

What are the fiduciary obligations of the board of directors?
A. Maximize profits for the company and its shareholders
B. Give excessive executive compensation
C. Safeguard the organization's resources and interests of the company's stakeholders
D. Allow

C. Safeguard the organization's resources and interests of the company's stakeholders

Which of the following is not an ethical issue in business?
A. Conflicts of interest
B. Maximization of profits
C. Discrimination
D. Information technology

B. Maximization of profits

Financial statement fraud includes all but:
A. Overstating revenues.
B. Understating expenses.
C. Overstating warranties on new product.
D. Improper asset valuations.

C. Overstating warranties on new product.

Which is a questionable ethical work behavior of an employee?
A. Handing in all assignments on time.
B. Taking time off without pay to attend to a family crisis.
C. Using social media during the work day to update your Facebook page.
D. Giving your best e

C. Using social media during the work day to update your Facebook page.

What are the four pillars of corporate governance?
A. Respect, accountability, fairness and transparency.
B. Responsibility, accountability, firmness and transparency.
C. Responsibility, accountability, fairness and transparency.
D. Respect, accountabilit

C. Responsibility, accountability, fairness and transparency.

What is the agency problem?
A. Managers place corporate goals ahead of personal goals.
B. Managers place personal goals ahead of corporate goals.
C. Managers place social goals ahead of personal goals.
D. Managers place corporate goals ahead of social goa

B. Managers place personal goals ahead of corporate goals.

What is a cause of agency problems?
A. Information asymmetry
B. Information symmetry
C. Information technology
D. Information privacy

A. Information asymmetry

Which of the following is not used to overcome the agency problem?
A. Executive compensation
B. Audited financial statements
C. Related party transactions
D. Internal controls

C. Related party transactions

Compensation of executives has soared over the last forty plus years to more than 400 times the pay for average workers. Suggested remedies to rein in executive compensation especially during time of corporate wrongdoing include each of the following exce

C. Limits on executive compensation

The 2010 Dodd-Frank Act includes additional incentives for whistleblowers. What is the act's effect on whistleblowing by accountants?
A. No accountant, internal or external, whether by job title or certification may receive a reward.
B. All accountants wh

D. A CPA may report a violation of a public accounting firm's performance in an audit.

One of the duties of a board of directors is to protect the interests of stakeholders. Which of the following is an example of protecting such interests?
A. Back dating options for executives
B. Deceptive business practices
C. Off balance sheet financing

D. Transparent financial reporting

The relationship between the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy and rule of law is known as
A. Code of ethics
B. Corporate sustainability
C. Corporate responsibility
D. Corporat

D. Corporate governance

The aim of executive compensations is to:
A. Enrich the executive
B. Align the goals of the executive with the workers
C. Align the goals of the executive with the shareholders
D. Enrich the company

C. Align the goals of the executive with the shareholders

The most important values included in corporate values statements include:
A. Pursuit of self-interests
B. Commitment to beating the competition
C. Diversity
D. Integrity and ethical behavior

D. Integrity and ethical behavior

What is a university's equivalent of a code of ethics?
A. Honor code
B. Student Handbook
C. Faculty Handbook
D. Statement of Values

A. Honor code

To whom does the management owe its ultimate allegiance?
A. Employees
B. Creditors
C. Shareholders
D. Government

C. Shareholders

A code of ethics for financial professionals is important under Sarbanes-Oxley because:
A. It strengthens the relationship between financial professionals and shareholders
B. It supports the certification of financial statement requirement
C. It decreases

B. It supports the certification of financial statement requirement

A similarity between the Bernie Madoff situation and that of R. Allen Stanford is they both were:
A. The head of a major U.S. stock exchange
B. The CEO of a company that went out of business after a major financial statement fraud
C. Involved in Ponzi sch

C. Involved in Ponzi schemes

Henry is the chief accounting office of XYZ Co. He believes the financial statements are accurate but he has been asked by the CFO to accelerate the recording of revenue at the end of the year to push a material amount that should be reported next year in

C. Discuss the matter with the CEO

An ethical organization incorporates what into their decision-making process:
A. Core values
B. Strategic policies
C. Reporting responsibilities
D. All of these

D. All of these

The Act that enables a whistleblower to receive compensation for blowing the whistle if the claims are deemed to be valid and the individual is not precluded from receiving such an award is:
A. The Sarbanes-Oxley Act
B. The Foreign Corrupt Practices Act
C

D. The Dodd-Frank Financial Reform Act

The primary ethical concern when contemplating whistleblowing as an accountant is:
A. It may violate my ethical obligations
B. It may fail to correct the matter
C. It may not be considered ethical by my employer
D. All of these

A. It may violate my ethical obligations

In the Parable of Sadhu case, Bowen T. MCoy's friend Steve summed up the dilemma by saying:
A. I feel that what happened with the sadhu is a good example of the breakdown between ethics in different cultures
B. I feel that what happened with the sadhu is

B. I feel that what happened with the sadhu is a good example of the breakdown between the individual and corporate ethics

In the Amgen case, former employees, Shawn O'Brien and Kassie Westmoreland, sued the company for:
A. Wrongful termination
B. Fraudulent actions
C. Discrimination
D. Retaliation

D. Retaliation

The primary ethical issue in United Thermostatic Controls is:
A. Misappropriation of corporate assets
B. Accelerating the recording of revenue into an earlier period
C. Delaying the recording of expenses into a later period
D. Failure to fully disclose al

B. Accelerating the recording of revenue into an earlier period

An important issue in the Hewlett Packard pretexting case was:
A. Using false pretenses to obtain confidential information about members of the board of directors
B. Disclosing confidential client information without the approval of the client
C. Producin

A. Using false pretenses to obtain confidential information about members of the board of directors

The IRS whistleblowing Case deals with
A. Ethics of retaliation
B. Professional whistleblowing for gain
C. Revenge whistleblowing
D. Ethics of whistleblowing

B. Professional whistleblowing for gain

The Bennie and the Jets case deals with:
A. Proper income classification of rebates received from insurers
B. Accelerating revenues
C. Delaying expenses
D. Failing to record rebates from insurers

B. Accelerating revenues

A major allegation in the XTO Energy case was the:
A. Insider trading
B. Violation of FCPA
C. Breach of fiduciary duties by board of directors
D. Retaliation of whistleblower

C. Breach of fiduciary duties by board of directors

In the Bhopal case, in evaluating its exposure to possible future liability due to technology failures, Union Carbide used which of the following concepts:
A. Professional skepticism
B. Business risk
C. Cost-benefit analysis
D. Rights Theory

B. Business risk

The case of Steve Jobs's Health deals with:
A. Disclosure issues beyond financial information
B. Disclosures required of members of board of directors
C. Fiduciary obligations of a CEO
D. Fiduciary obligations of a board of directors

A. Disclosure issues beyond financial information

An important issue in the HP case with "event hostess" Jodie Fisher is:
A. Conflict of interest of Mark Hurd
B. Alleged sexual harassment of Jodi Fisher
C. Disclosure of confidential client information by Hurd to Fisher
D. All of these

D. All of these