Not reporting environmental issues is an example of:
a. Lack of transparency
b. Lack of integrity
c. Lack of accuracy
d. All of the above
e. None of the above
These values are the combinations of a value and the probability of its occurrence:
a. Probable values
b. Common values
c. Present values
d. Expected values
e. Risk-adjusted values
From a stakeholder point of view, which of the following must be satisfied for a
decision to be considered ethical?
a. The decision should demonstrate virtues reasonabley expected
b. The decision should result in more benefits than costs
c. The decision should not offend the rights of any other stakeholders
d. The distribution of benefits and burdens should be fair
e. All of the above must be satisfied for a decision to be considered ethical
Failure to identify all relevant stakeholder groups for a proper stakeholder impact
analysis may be the result of:
a. Bias
b. Conforming to an unethical corporate culture
c. Conflicts of interests
d. Failure to consider the motivation for the decision
e. All of the above
Mark-to-market accounting is incorrectly characterized as:
a. Relevant for management compensation purposes
b. Relevant for valuation purposes
c. Relevant to investors
d. Sometimes misleading
e. Responsible for the subprime lending fiasco
Which of the following is not a fundamental principle in codes of conduct for
professional accountants?
a. Act in the client’s best interest
b. Objectivity and independence
c. Maintain the good reputation of the profession
d. Maintain confidentiality
e. Not to be associated with misleading information
A new audit client was taken on by a professional accountant’s firm. The fee for this
client’s audit engagement is significantly lower than that charged by the prior
accountants. This situation could result in the following threat to professional
independence:
a. Self-review
b. Intimidation
c. Advocacy
d. Familiarity
e. None of the above
If a decision is expected to be unfair to a particular stakeholder group, the decision may
be improved by:
a. Using stakeholder analysis
b. Using a decision making approach
c. Increasing the compensation to that stakeholder group
d. Increasing the compensation to all stakeholder groups
e. All of the above
The AACSB Ethics Education taskforce has called for business students to be familiar
with the following approaches to ethical decision making:
a. Consequentialism, deontology, and virtue ethics
b. Consequentialism, deontology, and moral imagination
c. Distributive justice, deontology, and virtue ethics
d. Distributive justice, deontology, and moral imagination
e. Consequentialism, deontology, and distributive justice
Which of the following was not a flaw found in LJM1 arrangements?
a. Profits were improperly recorded on treasury shares used or sheltered by non-existing
hedges
b. Enron was hiding employee stock option expense
c. Enron was hedging itself
d. Enron had to advance treasury shares to buy them back at preferential rates
e. Enron officers and their helpers benefited
The following are determinants of reputation:
a. Trustworthiness and Responsibility
b. Credibility, Responsibility and Relevance
c. Responsibility and Impartiality
d. Relevance and Impartiality
e. Relevance, Credibility and Responsibility
This philosopher argued that self-interest leads to economic cooperation:
a. Adam Smith
b. John Locke
c. Thomas Hobbes
d. Jeremy Bentham
e. John Rawls
The 1999 Gramm-Leach-Billey Act allowed banks to:
a. Engage in subprime lending
b. Sell insurance
c. Become more involved in investment bank activities
d. Underwrite government bonds
e. Choose between commercial and investment bank activities
The following is a fundamental factor in having an effective ethical corporate culture:
a. Tone at the top
b. Efficient oversight by the company’s Board of Directors
c. Workplace ethics
d. Code of conduct
e. Ethics risk management programs
The following value is not necessary for an accounting professional:
a. Honesty
b. Integrity
c. Objectivity
d. A primary commitment to self-interest
e. All but one of the above
Which of the following is not an ethics risk management principle?
a. Normal definitions of risk are too narrow for stakeholder accountability
b. Assign responsibility, develop follow-up processes and board review
c. Discovery and remediation are essential
d. The code of ethics must be reviewed by independent parties
e. An ethics risk exists when expectations of stakeholders may not be met
The following elements are essential features of a profession:
a. Extensive training, license or certification, and provision of important services to
society
b. Extensive training, primarily intellectual skills, and representation by professional
organizations
c. Extensive training, provision of important services to society, and primarily
intellectual skills
d. License or certification, representation by professional organizations, and autonomy
e. License or certification, autonomy, and provision of important services to society
An issue with mark-to-market accounting when there is a highly depressed market is
that:
a. Depressed values could be only temporary, portfolios are likely to re-gain value, and
thus current unrealized losses are overstated
b. Depressed values could be not only temporary, portfolios are likely to re-gain value,
and thus current losses are overstated
c. Depressed values could be only temporary, portfolios are not likely to re-gain value,
and thus current losses are understated
d. Depressed values could be only temporary, portfolios are not likely to re-gain value,
and thus current non-realized gains are overstated
e. Depressed values could be only temporary, portfolios are likely to re-gain value, and
thus current non-realized losses are understated
An employee who thinks he is being treated unfairly because he is regularly working
unpaid overtime urgently, needs some extra cash. Using the fraud triangle, this situation
likely constitutes:
a. Motive
b. Rationalization
c. Opportunity
d. (a) and (b)
e. (a) and (c)
This organization is developing an international code of conduct for professional
accountant:
a. International Accounting Standards Board
b. European Federation of Accountants
c. Financial Accounting Standards Board
d. Public Accounting Oversight Board
e. International Federation of Accountants
Which of the following financial crises or fiascos were not related to the Subprime
Lending Crisis?
a. Bear Stearns
b. Lehman Brothers
c. Bernie Madoff
d. AIG
e. Galleon Group
Which of the following is not an example of emerging public accountability standards
or initiatives?
a. SOX-404
b. GRI
c. AA-1000
d. FTSE4Good
e. All of the above
Some observers claim that the U.S. Federal Reserve Board encouraged the housing and
credit bubbles by:
a. Not regulating subprime mortgages
b. Cutting interest rates
c. Enforcing mark to market accounting
d. (a) and (b)
e. (a) and (c)
SOX contained sections with regard to the audit and/or audit committee that were
designed to:
a. Increase the independence of management.
b. Increase the financial literacy of audit committee members.
c. Limit the conflicts of interest related to the services an auditor can perform.
d. Restrict the ability of auditors to serve on the audit committee.
e. All of the above.
An employee in charge of writing checks to suppliers in a manufacturing firm steals
small sums of money every month by writing himself a check for the total of the
discounts he negotiates with the company’s suppliers. This type of rationalization is
based on:
a. Denial of responsibility
b. Denial of the victim
c. Condemnation of the condemners
d. Everyone else is doing it
e. Entitlement
This approach presupposes that happiness, utility, pleasure, pain and anguish can be
quantified:
a. Deontology
b. Distributive Justice
c. Utilitarianism
d. Moral Imagination
e. Virtue Ethics
Corporations are now increasingly realizing that they are accountable:
a. Legally to shareholders
b. Legally to all stakeholders
c. Strategically to additional stakeholders
d. (a) and (b)
e. (a) and (c)
This approach, a variant of utilitarianism, considers an action to be ethically good if it
will probably produce a greater balance of good over evil:
a. Act Utilitarianism
b. Active Utilitarianism
c. Sub-Utilitarianism
d. Consequentialism
e. Virtue Ethics
Freddie Mac and Fannie Mae:
a. Were created to support the U.S. housing market.
b. Stimulated the U.S. Housing Bubble.
c. Provided bailout funds to the U.S. Government
d. Acted in the best interest of consumers
e. Acted in the best interest of lenders
Which was the largest fraud or bankruptcy leading to the crisis of investor confidence in
2002?
a. Enron
b. Global Crossing
c. WorldCom
d. HIH Insurance
e. Xerox
An employee in charge of the costumer service help line needs urgently some extra cash
for paying his son’s hospital bills. Using the fraud triangle, this situation likely
constitutes:
a. Motive
b. Rationalization
c. Opportunity
d. (a) and (b)
e. (a) and (c)