23. responsibilities relate to a business’s contributions to stakeholders.
a. Economic
b. Legal
c. Ethical
d. Voluntary
e. Social responsiveness
24. Passed by Congress in 1991, the
compliance programs.
a. Sarbanes-Oxley Act
created incentives for organizations to develop and implement ethical
b. U.S. Sentencing Commission’s Guidelines for Ethical Compliance
c. Ethical Compliance Act
d. Social Responsiveness Compliance Act
e. Federal Sentencing Guidelines for Organizations
25. Donation of computer equipment to schools by Toshiba would be associated with responsibilities.
a. economic
b. voluntary
c. legal
d. ethical
e. minimum
26. 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
a. conflicts of interest.
b. cronyism.
c. reporting transparency.
d. corporate espionage.
e. dual reporting.
27. Which of the following is not a benefit to businesses of engaging in voluntary responsibilities?
a. Help create an ethical culture and values that can act as a buffer to organizational misconduct
b. Reduce government involvement by providing assistance to stakeholders
c. Develop employee leadership skills
d. Improve employee compensation and retention
e. Improve the quality of life in communities
28. Companies that will most likely be found in violation of procompetitive legislation.
a. pollute waterways
b. knowingly harm consumers
c. contract with sweatshops
d. establish monopolies
e. help consumers
29. tie(s) an organization’s product(s) directly to a social concern through a marketing program.
a. Voluntary contributions
b. Cause-related marketing
c. Strategic philanthropy
d. Corporate giving
e. Employee benefits
30. Title VII of the Civil Rights Act of 1964
a. prohibits discrimination on the basis of race, color, sex, religion, or national origin.
b. penalizes the top executives in an organization for misconduct.
c. is basically the same as the Sarbanes-Oxley Act.
d. discourages whistle-blowers from reporting misconduct.
e. prohibits pay discrimination on the basis of gender.
31. Cause related marketing can affect consumer
cause are seen as a good fit.
a. individual ethics
b. tastes
c. perceptions
d. budgets
e. buying patterns
, if consumers are sympathetic to the cause and the brand and
32. Who provides information to managers, investors, tax authorities, and other stakeholders who make resource
allocation decisions for corporations?
a. Accountants
b. Federal regulators
c. The Securities and Exchange Commission
d. The Department of Justice
e. Human Resources departments
33. The of ethics involves embedding values, norms, and artifacts in organizations, industries, and society.
a. institutionalization
b. rationalization
c. commercialization
d. mobilization
e. enforcement
34. Which of the following is not a reason why the institutionalization of business ethics has progressed in recent
decades?
a. Institutionalization of ethics is now mandated for all organizations by governments around the world
b. Stakeholders have recognized the need for improving business ethics
c. The government has stepped in when scandals and misconduct have damaged key constituents of businesses
d. Gatekeepers have been questioned as to their contributions to major scandals
e. Highly ethical companies tend to be more profitable than those suffering from misconduct issues
35. Part of the reason why credit ratings firms did not catch major problems prior to the global financial meltdown of
2008 was because they were paid by the firms that they rank, which creates
a. economies of scale.
b. synergy.
c. a conflict of interest.
d. cooperation.
e. efficiency.
36. Investigations into the financial rating industry after the financial meltdown of 2008 found all of the following except
a. analysts cut corners when faced with less time to perform due diligence.
b. analysts’ ratings were inaccurate.
c. many high ratings were based on inadequate historical data.
d. analysts were overwhelmed with the volume and complexity of trades.
e. most analysts were completely untrained and unprepared to do their jobs.
37. Some, especially those in business, complain that the Sarbanes-Oxley Act and similar legislation
a. is excessively complex and financially burdensome.
b. is not necessary.
c. is fair to all firms.
d. has reduced restatements of financial reports.
e. is too simplistic.
38. 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
a. values.
b. norms.
c. artifacts.
d. legal compliance.
e. employee compensation
39. Which of the following provide incentives for developing core practices within a firm that could help ensure ethical
and legal compliance?
a. Department of Justice and Open Compliance Ethics Group
b. Department of Justice and the Sarbanes-Oxley Act
c. Federal Sentencing Guidelines for Organizations and the Sarbanes-Oxley Act
d. Food and Drug Administration and the Sarbanes-Oxley Act
e. Securities and Exchange Commission and the Sarbanes-Oxley Act
40. Laws and regulations change over time; however, in the United States the thrust of most business legislation can be
summed up as
a. any practice is permitted.
b. any practice is permitted that does not substantially reduce competition and harm consumers or society.
c. any practice is permitted that does not substantially harm consumers or society, but this applies only within the
United States.
d. any practice is permitted that does not harm the environment.
e. any practice is permitted that does not break the law.
41. Why do you think the costs of compliance with Sarbanes Oxley go down over time?
42. According to the text, the opinions of society, as expressed through legislation, can change over time and different
courts and government legislatures may take different views about the acceptability of specific business activities.
Why is this so?
43. What ethical issues affecting consumers and society as a whole are created by unfair competition?
44. Society often expects a lot from business. Do you think that it is possible to balance profit and other business
objectives with the goals and desires of society? Why or why not?