Managerial Ethics quiz 2
Externally imposed levels of appropriate conduct, such as laws, rules, and regulations, are known as
mandated boundaries
attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm's audit committee
The Sarbanes-Oxley (SOX) Act
The Sarbanes-Oxley (SOX) Act was passed to provide federal oversight of
corporate accounting practices
Businesses often want to avoid lawsuits if possible because of the high costs involved.
A big box retailer announced plans to open one of its superstores in a small rural community. After a group of protestors filed a lawsuit against the company, the retailer terminated its development agreement instead of battling it out in court. Which of the following does this scenario exemplify?
Voluntary boundaries
A fitness equipment company donates money, resources, and employee time to causes and activities that improve their communities. For example, the company donated $20,000 worth of equipment to a local community center for teens. The donations in this scenario exemplify to the concept of
Consumer Financial Protection Bureau (CFPB)
An independent agency within the Federal Reserve System regulates the offering and provision of consumer financial products or services under the Federal consumer financial laws. For example, it enforces a federal ban on discrimination in lending cases where a customer is denied credit because of their sexual orientation or gender identity. Which of the following independent agencies is described in this example?
mandated boundaries
As the chief ethics officer of a biotechnology company, Drake is responsible for monitoring the three dimensions of institutionalization. Currently, Drake is reviewing how his company operates within the externally imposed levels of appropriate conduct—such as laws, rules, and regulations—known as
The Sarbanes-Oxley (SOX) Act
Asia, a new financial manager for a publicly traded technology company, works closely with Dan, its chief financial officer. While helping Dan organize his files, she notices an accounting error that made the firm appear more profitable than it really was. As Asia digs deeper and finds more errors, she considers that perhaps Dan is engaging in unethical behavior. The next day, a federal regulatory agency begins an investigation of the company. Asia feels comfortable sharing her findings because she knows the company cannot fire her for doing so. Which of the following laws protects Asia in this scenario?
Imani is required to report her client because the Sarbanes-Oxley Act modifies the attorney-client relationship.
Imani is a lawyer who represents an accounting firm. Through an email with her client, Imani learns her contact has been lying on financial statements to the public as well as on reports about corporate performance and health. Which of the following statements is true in this scenario?
Financial Stability Oversight Council (FSOC)
Since U.S. banks have become safer since the Great Recession, one oversight council announced it would review risky activities of financial markets as a whole rather than zeroing in on individual nonbank firms. This strategic shift changes the way so-called stress tests are conducted and reported by which of the following oversight councils?
Core practices
The Alpha Beta Corporation (ABC) is a private, nonprofit organization that promotes business self-regulation. Businesses can be accredited through ABC by meeting certain requirements to protect consumers and better their business. To do this, businesses follow a set of best practices outlined by ABC. This scenario relates to the concept of
has supervisory power over credit markets as well as the authority to monitor lenders
The Consumer Financial Protection Bureau (CFPB)
Core practices
The National Advertising Division (NAD), an investigatory division of the BBB's National Advertising Review Council, recommended that an Internet communications company discontinue its "fastest overall speeds" claims so as to not mislead consumers. Although the communications company is not legally mandated to follow the decision, advertising perceived to be misleading could attract the attention of the media and public interest groups if not corrected. Which of the three dimensions of institutionalization is this related to?
Fines or imprisonment may be imposed as punishment for breaking the law under
criminal law
The Sarbanes-Oxley (SOX) Act
Acme Corp., a public accounting firm, provides auditing for a multinational cosmetics company. The president of the cosmetics company asks Acme Corp. if it will provide consulting services as well. Acme Corp. instantly agrees. Which of the following laws does this scenario violate?
The Federal Sentencing Guidelines for Organizations (FSGO)
An employee for an airline was caught accepting bribes from a baggage handling company. In exchange, he helped the baggage handling company secure contracts with the airline. Because the airline demonstrated due diligence in developing effective compliance programs to discourage unethical and illegal conduct, it was not as heavily penalized for its employee's misconduct as it would have been otherwise. Which of the following is a set of guidelines for prosecuting organizations related to the incentive described in this scenario?
What ties an organization's products directly to a social concern through a marketing program?
Cause-related marketing
Which of the following refers to precedents established by judges?
Common Law
What does the Federal Sentencing Guidelines for Organizations (FSGO) focus on?
Encouraging ethical and legal compliance by reducing penalties for firms with effective compliance programs
U.S. Sentencing Guidelines for Organizations
In recent years, new laws and regulations have been passed to foster programs designed to improve business ethics and social responsibility. The most important of these are the Federal Sentencing Guidelines for Organizations (FSGO), the Sarbanes-Oxley Act, and the Dodd-Frank Act. With guidelines that provide for just punishment, adequate deterrence, and incentives for organizations to prevent, detect, and report misconduct, which of the following was created for federal prosecutions of organizations?
Which of the following statements describes the Sherman Antitrust Act
It prohibits organizations from holding monopolies in their industries.
Which of the following statements is true of the Dodd-Frank Wall Street Reform Act?
It seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008-2009 financial crisis.
The Federal Sentencing Guidelines for Organizations (FSGO)
Mia, the chief ethics and compliance officer for a global tech firm based in the United States, sends a company-wide email to announce the introduction of an ethics hotline for reporting ethical misconduct. The company extends its internal ethical controls through hotlines, self-auditing programs, and other mechanisms so misconduct can be detected internally rather than externally. The ethics policies described in this scenario are encouraged by the
The act/agency that enforces regular surprise inspections to ensure businesses maintain safe working environments is called the
Occupational Safety and Health Administration
Dodd-Frank Wall Street Reform and Consumer Protection Act
Paulina witnessed misconduct at the publicly traded firm where she was employed. She provided her detailed, firsthand account to the Securities and Exchange Commission. As a result of her intel, millions of dollars were returned to harmed investors. Paulina subsequently received a $1 million reward. Paulina received this reward under which of the following laws?
consumer protection law
The Children's Online Privacy Protection Act (COPPA) requires commercial Internet sites and mobile apps to carry privacy policy statements, obtain parental consent before soliciting information from children under the age of 13, and provide users with an opportunity to remove any information provided by children. Which of the following best describes these provisions?
organizational culture
The U.S. Sentencing Commission continued to emphasize that there should be standards and procedures in place to prevent and detect misconduct along with the importance of
Businesses may improve their communities, reduce government involvement by providing assistance to stakeholders, develop employee leadership skills, and foster an ethical culture and values that deter organizational misconduct by addressing which one of the following?
Voluntary responsibilities
The Office of Financial Research
Which of the following is an office created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and is charged with creating a better system for analyzing the financial industry?
Accountants, lawyers, financial rating agencies, financial reporting services, and risk assessors of financial products—who must trust and be trusted by stakeholders to make business work—are all examples of
gatekeepers
