Business and Professional Ethics For Directors Executives Accountants 8th Edition Brooks Test Bank

Business and Professional Ethics for
Directors Executives Accountants 8th

Edition Brooks Test Bank
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1. Corporations are now increasingly realizing that they are accountable
a. legally to shareholders.
b. legally to all stakeholders.
c. strategically to additional stakeholders.
d. legally to shareholders and all stakeholders.
e. legally to shareholders and strategically to additional stakeholders.
ANSWER: e
POINTS: 1
REFERENCES: Modern Governance & Accountability Framework – To Shareholders & Other Stakeholders
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
KEYWORDS: Blooms: Remembering
DATE CREATED: 4/12/2018 5:51 AM
DATE MODIFIED: 4/12/2018 5:52 AM
2. A company’s internal auditors and its Ethics Officer should report

a. day-to-day to the CEO.
b. day-to-day to the Audit Committee of the Board of Directors.
c. regularly to the Audit Committee of the Board of Directors without management being present.
d. day-to-day to the CEO, and regularly to the Audit Committee of the Board of Directors without management
being present.
e. day-to-day to both the CEO and the Audit Committee of the Board of Directors.
ANSWER: d
POINTS: 1
3. Which of the following is NOT true?

a. Principles are more useful than rules because principles can be interpreted as new circumstances require.
b. Rules are more useful than principles because rules can be interpreted as new circumstances require.
c. A blend of principles and rules is often optimal.
d. Principles are more useful than rules, and a blend of principles and rules is often optimal.
e. All of these are correct.
ANSWER: b
POINTS: 1
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4. Experience has revealed that, to be effective, a code must be reinforced by
a. tone at the top.
b. an ethics officer and internal auditors.
c. a comprehensive ethical culture.
d. principles, rules and examples.
ANSWER: e
POINTS: 1
5. 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.
ANSWER: d
POINTS: 1
REFERENCES: Threats to Good Governance & Accountability
6. A conflict of interest exists when a given decision maker (D) and another person (P) are in the following situation:
a. D has to exercise judgment in P’s behalf.
b. P has to exercise judgment in D’s behalf.
c. D has a special interest that interferes with proper judgment.
d. D has to exercise judgment in P’s behalf, and P has to exercise judgment in D’s behalf.
e. D has to exercise judgment in P’s behalf, and D has a special interest that interferes with proper judgment.
ANSWER: e
POINTS: 1
KEYWORDS: Blooms: Comprehension
7. A potential conflict of interest exists when a given decision maker (D) and another person (P) are in the following
situation:
a. P has a special interest that interferes with proper judgment.
b. D may have to exercise judgment in P’s behalf.
c. D has a special interest that interferes with proper judgment.
d. P has a special interest that interferes with proper judgment, and D may have to exercise judgment in P’s
behalf.
e. D may have to exercise judgment in P’s behalf, and D has a special interest that interferes with proper
judgment.
ANSWER: e
POINTS: 1
KEYWORDS: Blooms: Comprehension
8. Which of these is the preferred approach for dealing with conflicts of interests?
a. management
b. disclosure
c. remediation
d. avoidance
e. awareness
ANSWER: d
POINTS: 1
9. A fundamental problem examined by agency theory is how it is possible to align

a. shareholders’ and stakeholders’ goals.
b. manager’s and stakeholders’ goals.
c. shareholders’ and managers’ goals.
d. principal’s and shareholders’ goals.
e. agent’s and stakeholders’ goals.
ANSWER: c
POINTS: 1
REFERENCES: Cases on Product Safety
10. The 20/60/20 rule states that the total percent of employees who could commit a fraudulent act is
a. 20%.
b. 60%.
c. 80%.
d. 100%.
e. None of these are correct.
ANSWER: b
POINTS: 1
11. Which of the following is NOT a characteristic identified by forensic experts in prospective fraud situations?
a. high intelligence
b. greed
c. need for whatever is taken
d. opportunity to take advantage
e. low probability of being caught
ANSWER: a
POINTS: 1
12. The primary focus of a compliance-based ethics program is

a. preventing, detecting and punishing violations of the law.
b. defining organizational values and encouraging employee commitment.
c. improving image and relationship with stakeholders.
d. protecting management from blame.
ANSWER: a
POINTS: 1
REFERENCES: Key Elements of Corporate Governance & Accountability

13. The primary focus of an integrity-based ethics program is
a. preventing, detecting and punishing violations of the law.
b. defining organizational values and encouraging employee commitment.
c. improving image and relationship with stakeholders.
d. protecting management from blame.
ANSWER: b
POINTS: 1
14. The most important factor in encouraging employee observance to an ethics program is that employees perceive that it
is
a. compliance-based.
b. values-based.
c. achievement-oriented.
d. stakeholder-based.
e. externally oriented.
ANSWER: b
POINTS: 1
15. Building trust within an organization can have favorable impact on employees’ willingness to share information and
ideas in a process of
a. ethical awareness.
b. ethical awakening.
c. ethical renewal.
d. ethical wave.
e. None of these are correct.
ANSWER: c
POINTS: 1
16. A Conference Board survey identified which of the following rationales for developing codes of ethics?
a. Make employees aware that adherence is critical to bottom-line success.
b. Provide a statement of do’s and don’ts.
c. Discuss what is expected in stakeholder relationships.
d. Establish values and mission.
ANSWER: e
POINTS: 1
17. Which code deals with ethics principles plus additional examples?
a. credo
b. code of ethics
c. code of conduct
d. code of practice
ANSWER: c
POINTS: 1
KEYWORDS: Blooms: Understanding
18. Which of the following is NOT a mechanism for monitoring a code of ethics?
a. ethics audit or internal audit procedures
b. reviews by legal department
c. awards and bonuses
d. annual sign-off by employees
e. employee surveys
ANSWER: c
POINTS: 1

19. 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
ANSWER: a
POINTS: 1
20. SOX imposed which of the following new penalties for executives?
a. fines
b. suspension
c. criminal prosecution for executives
d. return of ill-gotten gains
ANSWER: c
POINTS: 1

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Business and Professional Ethics for

Directors Executives Accountants 8th

2. A company’s internal auditors and its Ethics Officer should report

3. Which of the following is NOT true?

Copyright Cengage Learning. Powered by Cognero. Page 1

5. Which of the following is NOT an ethics risk management principle?

9. A fundamental problem examined by agency theory is how it is possible to align

12. The primary focus of a compliance-based ethics program is

Copyright Cengage Learning. Powered by Cognero. Page 4

Copyright Cengage Learning. Powered by Cognero. Page 6

Copyright Cengage Learning. Powered by Cognero. Page 7

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