Chapter 2 Review - Cognitive Processes and Ethical Decision Making In Accounting

The underlying features of cognitive development include ______. (Check all that apply) A. becoming more complex and sophisticated with development B. developing from childhood to adulthood C. a hierarchical series only D. a thought process E. being set in childhood F. an ability to make reasoned judgments

Answers: A, B, D, F

Heinz dealt with the dilemma by ______. (Check all that apply) A. asking the druggist to sell the drug for less B. asking the druggist if he could pay for the drug over time C. raising all the money from family and friends D. giving up on trying to obtain the drug E. stealing the drug for his wife

Answers: A, B, E

The most common social and organizational pressures that can cause well-intentioned people to make poor ethical choices are ______. A. obedience to authority B. considering multiple stakeholders C. conforming to ethical judgments of peers

Answers: A, C

Andersen's moral blindness with respect to Enron was caused by ______. (Check all that apply) A. pressure from Enron B. failure of professional judgment C. Enron being one of the largest accounts for Andersen D. high consulting fees E. professional skepticism

Answers: A, C, D

In stages 5 and 6, the auditor's behavior should be primarily influenced by _____ ethical principles.

universal

Select all the reasons why diversity and inclusion are important issues. A. Global business environment benefits from a diverse workforce. B. Fair and equal treatment creates an ethical corporate culture. C. Diverse workforce limits opportunity for employees.

Answers: A, B

Sexual harassment often involves ______. A. quid pro quo B. severe unwelcome behavior C. a friendly work environment

Answers: A, B

Behavioral ethics ______. (Select all that apply) A. looks at how situational and social forces influence the actual behavior of individuals B. requires explaining moral and immoral behavior in systematic ways C. looks at how individuals believe they should act D. requires understanding the consequences of actions

Answers: A, B, D

In stage 5 of Kohlberg's model, a person is influenced by ______. (Check all that apply) A. the legal contract of society B. rights and values of society C. acting in the best interests of others D. evaluating harms and benefits of actions E. universal ethical principles

Answers: A, B, D

Select all of the following steps Uber pledged to take as a result of Susan Fowler's sexual harassment claims and the Covington report. A. Train personnel to combat implicit bias B. Create an Ethics and Culture Committee C. Mitigate bias in performance reports D. Provide an effective complaint process

Answers: A, B, D

Which of the following has been shown to influence the moral development of a manager? (Check all that apply) A. Corporate culture B. Education C. Established decision priorities D. Ethical training E. Fear of losing one's job

Answers: A, B, D

Our views of other people (stereotypes) can cause which of the following negative behaviors? (Select all that apply) A. National pride B. Favoritism C. Discriminatory hiring

Answers: B, C

Select the possible negative outcomes of simplifying complex issues to make decision making easier. (Select all that apply) A. Considering long-term consequences B. Failing to identify stakeholders C. Underestimating risk

Answers: B, C

In stage 1 of Kohlberg's model, a person's behavior is influenced by ______. (Check all that apply) A. pursuit of self interest B. avoidance of punishment C. egoism D. obedience to rules

Answers: B, D

Which of the following are included in the "social contract" accountants have? A. Commitment to serve the interest of superiors B. Commitment to a code of ethics C. Commitment to serve the interest of the client D. Commitment to lifelong learning E. Commitment to serve the interest of the public

Answers: B, D, E

In stage 3 of Kohlberg's model, a person is influenced by ______. (Check all that apply) A. respect for authority B. law and order C. doing what is in the best interests of others D. loyalty in relationships E. duty to the social order

Answers: C, D

In stage 1 of Kohlberg's model, a person is not influenced by ______. (Check all that apply) A. obedience to rules B. fear of punishment C. satisfying one's own needs D. fairness to others E. egoism

Answers: C, D, E

In stage 4 of Kohlberg's model, a person's behavior is influenced by ______. (Check all that apply) A. fear of punishment B. fairness to others C. duty to the social order D. pursuit of self-interest E. law and order

Answers: C, E

An auditor who reasons at stage six will emphasize: (Check all that apply). A. The public trust B. Integrity and objectivity C. Retaining the client D. Harms and benefits to others E. Universality

B. Integrity and objectivity E. Universality

In stage 5 of Kohlberg's model, behavior is driven by ______. A. the pursuit of self-interest B. upholding the rights and values of society C. fear of punishment D. universal ethical principles

B. upholding the rights and values of society

Compared to System 1 thinking, System 2 is more ______. A. emotional B. automatic C. deliberate D. effortless

C. Deliberate

Which of the following is not a part of the ethical domain for accountants and auditors? A. General public B. Accounting profession C. Regulatory bodies (SEC, PCAOB) D. Legal profession

D. Legal Profession

Cognitive dissonance can best be defined as ______. A. the disconnect between moral sensitivity and moral judgment B. the correlation between moral judgment and moral behavior C. the difference between our perceptions and behavior D. the inconsistency between our perceptions and behavior

D. the inconsistency between our perceptions and behavior

Cognitive development is based upon 20 years of research by whom?

Lawrence Kohlberg

_____ _____ describes the common failure of people to notice others' unethical behavior when seeing that behavior would harm the observer. (Enter one word per blank.)

Moral blindness

What is the ethical dilemma facing Heinz?

Whether to steal the drug or not

In stage 1 of Kohlberg's model, behavior is driven by the desire to ______.

avoid punishment

_____ ethics looks at the way individuals actually behave in moral circumstances.

behavioral

When a staff accountant is aware of financial statement fraud, but does not report it because he/she believes his/her supervisor will correct the situation, this is an example of ______.

bystander effect

When an individual has the tendency to not report incidents of wrongdoing because he/she believes others will report it, this is commonly called ______.

bystander effect

The thought process followed in one's moral development is _____ _____.

cognitive development

In the context of business, the decision one makes can be influenced by _____ culture.

corporate

Which social and organizational pressure has lead to poor ethical judgments in financial reporting?

desire to please authority

Which concept involves treating individuals with respect and celebrating the rich dimensions of individuality?

diversity

Which concept promotes fairness and justice where everyone receives the same things to enjoy a full, healthy life?

equality

Which concept describes an equal opportunity that fits an individual's personal circumstances?

equity

Which bias describes when an an auditor may yield to pressures of the majority even though their views are incorrect?

group think

Which concept involves motivating employees so that they feel a part of the organization?

inclusion

Kohlberg developed the example of Heinz and the Drug to illustrate a _____ dilemma.

moral

Within the cognitive-developmental paradigm, what is the most influential factor of an individual's moral behavior?

moral judgement

Which bias describes when an auditor may be conservative in his/her risk assessment but may fail to seek additional information to confirm or update his/her knowledge about internal controls?

overconfidence bias

Kohlberg asserted that development in moral _____ enables a person to become truly a moral person, both in thought and action.

reasoning

An accountant has a(n) _____ _____ to act in accordance with the public interest.

social contract

An auditor who reasons at stage 5 should emphasize ______.

the public interest

Responsibilities to the key constituent groups of the ethical domain for accountants and auditors may conflict.

true

True or false: Respondents to the Deloitte Survey entitled "Global Human Capital Trends" believe that diversity creates a competitive advantage.

true