Quiz

Business Law 22088

Page Count
15 pages
Word Count
3425 words
Book Title
Business Ethics: Case Studies and Selected Readings 8th Edition
Authors
Marianne M. Jennings
Which company had to issue financial restatements because of promotional fees
accounting?
a. Royal Ahold
b. U.S. Foodservice
c. K-Mart
d. All of the above
Who is responsible for the losses at Chase?
a. Joseph Jett
b. Jerome Kerviel
c. The "Rain man"
d. The "London Whale"
Which is the form employers must have for employees from other countries?
a. W-4
b. 1099
c. I-9
d. All of the above.
Which formula does Kelly propose for corporate finances?
a. Profit = revenues - cost
b. Profit = revenues - employee income
c. Profit = revenues - employee income + cost of materials
d. Profits = employee income
Yahoo did not experience a drop in share price as a result of the congressional hearings
on its business in China.
Randy White is the executive director of a non-profit preschool for special needs
children. Part of Randy's responsibilities include fundraising for the preschool. Because
of his experience and success in operating specialty pre-schools, Randy is sought after
as a consultant at locations around the country to assist in the start-up and operation of
such facilities. Randy does so quite frequently. Randy does not take vacation time for
this work, and his consultant fees (which range from $750 - $1500 per day) are kept by
him as personal income. Randy uses his secretary at the preschool to book his travel
arrangements and prepare his consultant reports and bills for these outside
engagements.
a. Randy's activities are ethical so long as disclosed.
b. Randy is using the time and resources of his employer in an unethical manner.
c. Randy's activities are ethical whether disclosed or undisclosed.
d. There is no conflict of interest in Randy's activities.
What was the impact of the behavior of the Jefferson County, Alabama supervisors on
the city of Birmingham?
a. The city of Birmingham got a new election process
b. None " it only affected the county
c. The city of Birmingham went bankrupt
d. None of the above
Which best describes the Categorical Imperative?
a. Act in one's self-interest
b. All rights exist by Divine Command
c. Circumstantial ethics
d. Behave in a manner that you are willing to have imposed on the whole
e. None of the above
When Ikea was poised to open a flagship store outside Moscow in 2001, its executives
were approached by employees of the public local utility. If Ikea wanted electricity for
its planned grand opening, the public utility officials needed individual cash payments.
a. Ikea could pay the money as a facilitation payment and not violate any anti-bribery
laws
b. Ikea and other companies from Sweden do not follow the OECD requirements on
bribery so Ikea could pay the officials and not violate any laws
c. The payment to the public officials would be a bribe and would violate Swedish law
d. The anti-bribery provisions apply only when a company offers to pay them, not when
public officials request payments
The UCLA Medical Center is facing sanctions from California's Department of Health
because several of its employees viewed records of famous patients, patients with
whom the employees had no contact or care responsibilities. The employees viewed the
records of, among others, Maria Shriver (wife of Governor Arnold Schwarzenegger),
the late Farrah Fawcett, and Britney Spears.
The unauthorized access to the records was uncovered when the story of the late Ms.
Fawcett's recurrence of cancer was published in The National Enquirer before Ms.
Fawcett had disclosed her health condition to family or friends. Ms. Fawcett's lawyers
then notified the hospital of the only possible source of the information.
Which category of an ethical breach applies to the conduct of the hospital employees?
a. Committing acts of personal decadence
b. Conflict of interest
c. Divulging information
d. Balancing ethical dilemmas
The Fair Labor Association:
a. Is a group of companies with international labor pools.
b. Is a group of colleges and universities dedicated to human rights issues in
employment.
c. Is a federal agency in the United States.
d. Does not count Nike as a member.
e. None of the above
An employee who falsified sales figures at his company explained, "I felt I had no
choice." The employee's conduct is best explained by:
a. A lack of ethics training.
b. The company culture.
c. The failure to screen him out.
d. None of the above
The music industry's warning labels on CDs:
a. Represent a new regulation of rock music.
b. Are an unconstitutional infringement of free speech.
c. Are a means of halting the regulatory cycle.
d. Were voluntary and initiated originally because of industry self-examination.
e. None of the above
Leslie Fay Companies was a clothing conglomerate that produced lines of women's
clothing and lingerie under the brand names Leslie Fay, Joan Leslie, Albert Nipon, Theo
Miles, Kasper, Le Suit, Nolan Miller, Castleberry, and Castlebrook. In early 1993, it
was discovered that senior Leslie Fay executives, in an effort to inflate profits and to
mask an actual loss of $13.7 million, had perpetrated an accounting fraud. Paul
Polishan, Leslie Fay's chief operating officer, was placed on leave without pay in
January 1993, along with Donald F. Kenia, the corporate controller. Mr. Kenia had first
alerted the company to the accounting manipulations and worked with auditors to
untangle the books.
By April 1993, Leslie Fay, under intense pressure from creditors, filed for Chapter 11
bankruptcy (reorganization) in Manhattan. Both Mr. Polishan and Mr. Kenia were fired.
Mr. Kenia, charged with two counts of filing false statements with the SEC, has entered
into a plea bargain with the U.S. Attorney in exchange for his cooperation in the
continuing investigation of the Leslie Fay accounting improprieties.
Also in April 1993, two new outside directors were named to the Leslie Fay board. The
audit committee of the board discovered, through continuing investigation, that
accounting irregularities had inflated the company's profits for at least five quarters
beginning in the fall of 1990.
As Leslie Fay continued its climb from bankruptcy, it was discovered that its law firm,
Weil Gotshall & Manges, had failed to disclose its close ties to two board audit
committee members. A federal bankruptcy judge ordered the law firm to pay fines
totaling $800,000, which was the cost of having an independent review of the law firm's
representation and conduct in the case.
In March 1995, Leslie Fay placed its flagship dress and retail business up for sale and
offered its CEO a success fee of $1.5 million if those businesses were sold.
Also in March 1995, a report detailing accounting improprieties was released by the
audit committee of the Leslie Fay board. The board found that when executives realized
they would not meet pre-established goals, they would ship goods out to a
Wilkes-Barre, Pennsylvania, facility to inflate sales. The executives also forged
inventory tags, multiplied the value of inventory, developed phantom inventory and
altered records to meet sales target. Some goods were invoiced to be shipped in the final
day of a quarter even though they were not actually shipped until the next quarter.
Numerous shareholders have filed suit against the Leslie Fay board and BDO Seidman,
the company's auditor during this period.
John Pomerantz continued as CEO from 1993 onward. The company has tried to find a
buyer but has remained unsuccessful in doing so.
a. What signals about the importance of earnings at Leslie Fay were sent to the officers
who committed the accounting improprieties?
b. Wouldn"t employees have been aware of the financial fraud? Why didn"t they speak
up? Why didn"t they tell someone?
c. How might Leslie Fay have prevented what happened?
d. If you were the new chief financial officer, what message would you most want to
impress upon all Leslie Fay employees?
e. Of what significance are the law firm's ties to the board's audit committee members?
Did these ties set a poor tone at the top?
Which of the following are not stakeholders under Freeman's theory?
a. Customers
b. Employees
c. Community
d. Both a and c
e. All of the above are stakeholders
How much was Ford required to pay to Kearns?
a. $0.30 per car
b. $0.40 per car
c. $0.90 per car
d. None of the above
What ethical issue existed with the Harvard Business Review editor and Jack Welch?
a. Conflict of interest
b. Taking unfair advantage
c. Disclosure of private information
d. None of the above
Which of the following categories does hazing fit into?
a. Interpersonal abuse
b. Organizational abuse
c. Conflict of interest
d. None of the above
How did Andersen's lead defense lawyer describe David Duncan?
a. "A client pleaser"
b. "Someone who is free from corruption"
c. "A straight shooter"
d. Both b and c
James Dodgsen is a student in a graduate course in business. The professor in the course
has given Dodgsen and his classmates a surprise quiz in class. Dodgsen did not do the
reading for class that day because he had been grading papers as part of his TA position.
He has been prepared for every other class that semester. As he glances as the quiz
questions, he realizes that he does not know any of the answers. However, he sees that
Jane Frampton, the student who sits next to him, is well prepared and answering the
questions with great ease. He can see her answers because of her large, block-style
printing. Dodgsen copies her answers.
a. Dodgsen is justified in using the answers because the pop quiz was unfair.
b. Dodgsen is justified in using the answers because he was fulfilling his TA
responsibilities instead of preparing for class.
c. Dodgsen is justified in using the answers if he intends to read the material eventually.
d. Dodgsen has been dishonest.
e. None of the above
In the Beech-Nut case, the executives at the time of the sales of adulterated apple juice:
a. Did not know that there was a problem with the apple juice.
b. Took no steps to cover up the juice problem.
c. Were charged with violations of criminal statutes.
d. Cannot be held responsible unless they actually bought the adulterated product.
e. None of the above
How many off-the-book entities had Enron created?
a. 125
b. 452
c. 1200
d. 3000
What was the impact of the E-Coli poisonings on Jack-in-the-Box sales?
a. Sales remained the same, unaffected
b. Sales dropped 10%
c. Sales dropped 20%
d. Jack-in-the-Box was closed so there were no sales
A radar detector:
a. If purchased legally, is not an unethical device.
b. If used only in those states in which they are permitted is an ethical device.
c. Is a legal and ethical tool for circumventing speed limits.
d. None of the above
There are no laws that cover cutting in line. However, those who do take cuts in line are
viewed with disdain by others because:
a. Case precedent prohibits it.
b. Normative standards govern this behavior.
c. There are still criminal penalties for cutting in line.
d. The theory of rights covers the issue.
Mary Pickford is an analyst for Munford Stanley, an investment banker. She has touted
the stock, an initial primary offering (IPO), of an obscure biotech firm as a "must buy."
Munford Stanley is the underwriter for the IPO. Pickford:
a. Does not have a conflict of interest.
b. Has a conflict of interest, but it is acceptable in IPOs.
c. Has a conflict of interest that must be disclosed to all purchasers.
d. Does not have a conflict of interest, but Munford Stanley does.
e. None of the above
The total restatement of revenues at HealthSouth was:
a. $1 billion.
b. $1.5 billion.
c. $2.0 billion.
d. $2.5 billion.
What did the FDA mean by saying that Beech-Nut played a "cat and mouse game" with
the government?
a. That Beech-Nut helped the FDA nab the supplier
b. That Beech-Nut tried to hide the concentrate
c. That Beech-Nut turned over the product but not its paper work
d. None of the above
What happened at Gadams's first place of employment?
a. Nothing, he was an exemplary employee
b. He was accused of improper conduct with female students
c. He molested female students
d. None of the above
Who would take issue with the philosophy, "Treat employees well because then
stockholders will prosper"?
a. Immanuel Kant
b. Marjorie Kelly
c. Michael Novak
d. Both a and b
e. All of the above
With reference to #32 above, how many times had the author successfully climbed Mt.
Everest?
a. Once
b. Twice
c. Never
d. Five
In the Goldman Abacus deal, who determined what mortgages went into the investment
pool?
a. Fabrice Tourre
b. ACA
c. John Paulson
d. Lloyd Blankfein
You need not disclose in your employment application those positions you held which
will not result in good feedback about you if your supervisors there are contacted.
Adam Smith is part of the Divine Command School.
Craigslist is not required by law to screen ads placed on its online service for illegal
conduct.
The element of balance in the Blanchard/Peale ethical model requires an examination of
the issue from the perspective of the affected party.
Jennings and Entine propose a model of social responsibility that includes truthfulness.
One benefit of diversity is a better ability to understand customers.
What category of ethical dilemma applies to the use of cell phone alibis?
a. Balancing ethical dilemmas
b. Giving or allowing false impressions
c. Conflicts of interest
d. Organizational abuse
A physician conducting a study on a new prescription drug manufactured by a firm in
which he is a 10% shareholder does not have a conflict of interest so long as his stock
ownership is disclosed in his report on the drug.
A real estate agent who recommends a management firm to an apartment complex
buyer without disclosing that the agent owns 50% of the firm has committed an ethical
violation.
Why do companies have moral clauses in their contracts with stars who are appearing
in their ads?
Joseph Jett did not serve time in prison for his activities at Kidder Peabody.
Removing records from the workplace to prevent access by regulators on a
pre-announced inspection is both illegal and unethical.
Employers are permitted to monitor employee e-mails and use of the Internet.
List the types of ethical violations the Department of Interior uncovered in its MMS
division?
Destruction of documents related to the financial reports of a company carries a 20-year
penalty.
In May 2010, Martha Stewart gave an interview to the New York Times magazine in
which she was asked, "Do you find it odd that the SEC investigated you for insider
trading, which resulted in your conviction in 2004, while letting a sociopath like Bernie
Madoff run unchecked?" (Mr. Madoff ran a $50 billion Ponzi scheme). Ms. Stewart
responded, "Let me just say one thing. They should have been paying closer attention to
other things." She then added that she never stole anyone's money like Madoff did.
Evaluate Ms. Stewart's comments in the context of ethical analysis, a credo, and her
attitude about ethics in business.

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