Chapter 8 - Extra Questions

True or false: Responsible leaders encourage auditors to exercise professional skepticism

TRUE!

What was the outcome of research conducted by Ponemon and Shaub? Personal characteristics of leaders do not influence individual behaviors There is a link between organizational culture and leader decision-making styles Audit seniors' perceptions of their firm leaders and culture influence auditor behavior Accounting firms cannot change an auditor's ethical orientation to match its own Leaders of accounting firms set the ethical tone at the top

There is a link between organizational culture and leader decision-making styles Audit seniors' perceptions of their firm leaders and culture influence auditor behavior Leaders of accounting firms set the ethical tone at the top

Sims and Keenan's studies found that employees were more likely to engage in external whistleblowing if: (Check all that apply). They perceive that company policies suggested that such behavior was acceptable The internal reporting mechanisms do not exist in their companies The accountability for whistleblowing is absent They had support from their superior

They perceive that company policies suggested that such behavior was acceptable They had support from their superior

Which of the following are characteristics of competent ethical leaders? Thoughtful deliberation in decision making System 1 decision making Motivated group of followers Ability to handle moral problems that arise

Thoughtful deliberation in decision making Ability to handle moral problems that arise

Ethical leadership failure can occur because of Following moral constraints for the good of the group Trying to keep the client happy at all costs Using one's position to take advantage of followers Applying an ends-justifies-the-means approach to ethical reasoning

Trying to keep the client happy at all costs Using one's position to take advantage of followers Applying an ends-justifies-the-means approach to ethical reasoning

Which of the following statements best describes the ethical conclusions of the HealthSouth fraud? Unethical leaders can corrupt the ethical culture, draw others in, and ruin a company An unethical company will bow to the unethical intentions of the CEO Ethical internal audit function counteracts unethical CEO behavior Systems put in place to support ethical behavior help to build an ethical culture

Unethical leaders can corrupt the ethical culture, draw others in, and ruin a company

Ethical leaders should be guided by Virtues and values Costs and benefits to the community Profits to the community Self-interest

Virtues and values

When are senior auditors more likely to report a manager's ethical violation? When they perceive personal costs of disclosure are low and when personal responsibility for reporting is low When they perceive personal costs of disclosure are high or when personal responsibility for reporting is high When they perceive personal costs of disclosure are high or when personal responsibility for reporting is low When they perceive personal costs of disclosure are low and when personal responsibility for reporting is high

When they perceive personal costs of disclosure are low and when personal responsibility for reporting is high

As a community of people, an ethical organization seeks to achieve benefits to the individual external rewards of the practice respect from the public a level of excellence

a level of excellence

The role of internal audit has been conceptualized as independent of influences by the audit committee a multi-dimensional construct with a position within the corporate governance structure based on the relationship with external auditors a multi-dimensional construct with a position within the corporate governance structure based on the reporting lines of communication dependent on ethical leadership within the organization

a multi-dimensional construct with a position within the corporate governance structure based on the reporting lines of communication

Social learning theory can be defined as a way to understand parallel deviances how leaders alter their behavior to meet follower expectations a way to understand how leaders influence followers in a general way a way to understand how followers influence leaders in a general way

a way to understand how leaders influence followers in a general way

Accountants witnessing financial wrongdoing have each of the following options except voice dissent arrange for an independent audit exit the organization remain silent

arrange for an independent audit

The type of commitment that is dependent on a sense of responsibility and readiness to support others within the organization is _________________ commitment.

colleague

Internal reporters would be hesitant in whistleblowing due to the absence of _____________ leadership and no support for the reporters themselves.

ethical

Ethical leadership failure can be attributed to moral intensity undefined ethical boundaries individual factors organizational factors

individual factors organizational factors

The systematic evaluation of the moral intensity of an issue influences magnitude of consequences judgments of ethicality likelihood of whistleblowing culture of the organization

judgments of ethicality likelihood of whistleblowing

The internal audit staff at HealthSouth (select all that apply): lacked independence were overstaffed were undertrained

lacked independence were undertrained

Identify the characteristic behaviors of authentic leaders. leaders can reduce dysfunctional behavior Generally there is a positive relationship between audit senior's perceptions of ethical behavior by firms and likelihood of dysfunctional behavior leaders have no influence on dysfunctional auditor behavior leaders can help to promote an ethical culture

leaders can reduce dysfunctional behavior leaders can help to promote an ethical culture

Consistency in words and actions underlies ethical _______________.

leadership

When it comes to preventing fraud, CFOs are in a position of ethical _____________.

leadership

Senior auditors were more likely to report a manager's ethical violation when they perceived personal costs of disclosure were _____________ or when personal responsibility for reporting was perceived to be _____________.

low; high

An ethical leader is more attuned to the______________ of _______________ and uses it to mitigate any bystander effect

magnitude; consequences

Stronger perceptions of the ethical environment are associated with a stronger public interest responsibility and a higher frequency of receiving ________________.

mentoring

A manager who serves as a role model for ethical conduct in a way that is visible to employees is referred to as a(n) __________ manager.

moral

The perceived overall intensity of a moral issue influences the decision maker's moral judgment moral action moral intent ethical leadership moral development

moral judgment moral action moral intent

Transformational leadership enacted in its authentic form enhances ethical values of followers awareness of ethical responsibilities of their roles motivation of followers morale of followers performance of followers

motivation of followers morale of followers performance of followers

In assessing whether to report wrongdoing, an individual should weigh the harm to the organization from not reporting against the harm to the colleague from reporting. individual from not reporting against the harm to the organization from reporting. colleague from not reporting against the harm to the organization from reporting. organization from reporting against the harm to the individual from reporting.

organization from not reporting against the harm to the colleague from reporting.

A way should be found to voice one's values with the intent of changing hearts and minds when _____________ ________________ and actions differ from what one truly believes in.

organizational values

The term that explains what happens when unethical behaviors of leaders lead to inappropriate behavior of followers is ___________ _________

paralle deviance

One's commitment to ethical standards and sense of professional identity is directly affected by due care professional skepticism persistence independence

persistence

Trainee auditors are more likely to report wrongdoing internally when a firm has a system of __________ _____________ to report internally.

quality controls

A firm will hire and promote individuals who fit into the prevailing firm culture as a result of the _____________-_______________ bias.

selection-socialization

Leader ethicality is assessed in the context of _____________ prescriptions

social

True or false: Seriousness of an unethical or illegal act can be more important than one's commitment to the firm and profession. True

true

True or false: Servant leaders use collaboration and persuasion to influence followers rather than control.

true

Characteristics of social learning theory include the influence of leader status and success on the behavior of followers way in which leaders influence followers way in which leaders become role models to followers influence of follower expectations on leader behavior

way in which leaders influence followers way in which leaders become role models to followers

Which of the following best describes perceptions of organizational ethics in a self-identified ethical dilemma? A disconnect exists between tax partner's and and non-partner tax practitioner's perception of ethics. Non-tax partners were more likely to describe an actual dilemma than tax partners The group (tax/non-tax partners) that described the dilemma rated the ethical environment as stronger Non-tax partners rated the ethical environments of their firms as stronger than tax partners

A disconnect exists between tax partner's and and non-partner tax practitioner's perception of ethics.

Identify the conclusion(s) to be drawn about the results of internal auditors' work in the HealthSouth fraud. Questioned ethicalness of the accounting imposed by the CEO and CFO A lack of ethical leadership by internal auditors stifled the moral intensity of financial reporting issues External auditors influenced internal audit conclusions The CEO pressured internal auditors as the company was under pressure to report good numbers

A lack of ethical leadership by internal auditors stifled the moral intensity of financial reporting issues The CEO pressured internal auditors as the company was under pressure to report good numbers

What is Ethical Leadership Competence? Setting the proper tone at the top Ability to apply a System 1 thinking to resolving ethical dilemmas Making difficult decisions Ability to handle all kinds of moral problems that may arise in an organization

Ability to handle all kinds of moral problems that may arise in an organization

Authentic leaders are ethically oriented in their behavior because they Take moral actions based on stakeholder beliefs and values Act conservatively at all times Acknowledge ethical responsibilities of their roles Recognize and evaluate ethical issues

Acknowledge ethical responsibilities of their roles Recognize and evaluate ethical issues

The lack of strong organizational ethical leadership can lead to Lack of a moral compass Following ethics codes Acting out of self-interest Doing what is expected

Acting out of self-interest

The conclusion of Morris' research was Authentic leaders can help to promote an ethical culture and reduce the instances of dysfunctional auditor behavior A significant positive correlation exists between measures of authentic leadership and dysfunctional auditor behavior Authentic leaders have no influence on the ethical culture or the instances of dysfunctional auditor behavior Perceptions of ethicality of leaders influences views of ethical firm culture

Authentic leaders can help to promote an ethical culture and reduce the instances of dysfunctional auditor behavior

What determines whether followers view managers as ethical leaders? Being a moral person Being a moral manager Being principled and caring Being a competent leader Rating high on the ethical leadership scale

Being a moral person Being a moral manager Being principled and caring

The text identifies all of the following accounting professionals as individuals who demonstrated leadership qualities and were successful in putting an end to wrongdoing in their organizations except for: Betty Vinson Anthony Menendez Cynthia Cooper Diem-Thi Le

Betty Vinson

What is the goal of an authentic leader? Maximize earnings Beat quarterly earnings estimates Satisfy the needs of others Build long-term shareholder value

Build long-term shareholder value

Transformational leaders seek to Challenge followers to take greater ownership for their work Serve as role model for followers Turn follower weaknesses into strengths Convert employees into followers through external mechanisms Develop followers into leaders

Challenge followers to take greater ownership for their work Serve as role model for followers Develop followers into leaders

Taylor and Curtis suggest which of the following relationships within accounting firms influence whether an auditor will blow the whistle on wrongdoing? Commitment to one's superior Commitment to professional identity Commitment to the accounting profession Commitment to the firm Likelihood of retaliation

Commitment to professional identity Commitment to the accounting profession Commitment to the firm

What are the traits of a moral manager? Acting rightly based on provisions in the code of conduct Inclusiveness Consistent and persuasive communication with employees Reward employees for performance

Consistent and persuasive communication with employees

What are the traits of a moral manager? Consistent and persuasive communication with employees Acting rightly based on provisions in the code of conduct Inclusiveness Reward employees for performance

Consistent and persuasive communication with employees

The objective of transformational leadership is Adjust follower ethics to conform to organizational ethics Create change in individuals and social systems Build long-term shareholder value Become authentic leaders

Create change in individuals and social systems

Which of the following would help prevent and detect financial statement fraud? Unethical leadership Increased moral intensity of a decision Effective internal audit function Ineffective external audit

Effective internal audit function

Which of the following is a benefit of using the Ethical Leadership Scale? Evaluates ethical decision making Encourages self-reflection on one's leadership skills Measures effectiveness of teaching ethical competence Provides a measuring stick of whether one's values consistently direct behavior

Encourages self-reflection on one's leadership skills

Which of the following are managed indirectly and promoted by the idea of responsible leadership and incentives to promote exemplary behavior? Ethical competencies Authentic leadership Followership Personal and professional ethics

Ethical competencies

The outcome of responsible leadership includes Ethical rules of conduct Ethical competencies Ethical leadership Ethical culture Personal ethical skills

Ethical competencies Ethical leadership Ethical culture

True or false: Audit seniors more frequently prematurely sign-off on audit work rather than under-report time

FALSE! Audit seniors more frequently under-reported time

The implications of the Bobek et al. study on gender factors affecting decision making in public accounting include: Males are more likely to recommend conceding to clients wishes Females are more likely to recommend conceding to clients wishes Moral intensity may mediate context in decision-making for males Moral intensity may mediate context in decision-making for females

Females are more likely to recommend conceding to clients wishes Moral intensity may mediate context in decision-making for males

What increases the likelihood of trainee auditors reporting an ethical violation by an audit partner? Formal structures for whistleblowing exist Informal structures for whistleblowing exist A reward exists for whistleblowing Firm quality controls exist

Formal structures for whistleblowing exist Firm quality controls exist

Which of the following best describes the reasons for the difference in perceptions of tax and non-tax partners of organizational ethics? Frequency of receiving mentoring Sense of public interest responsibility Ability to describe an ethical dilemma Partner fit within firm culture Role of partner in influencing the ethical environment of their firms Non-tax partners rarely perceive unethical behavior in the organization

Frequency of receiving mentoring Sense of public interest responsibility

Identify the factors that influence organizational commitment in public accounting. Identification with ethical systems Professional identity Firm quality controls Firm leadership Colleague commitment

Identification with ethical systems Firm quality controls Firm leadership

Identify the possible effects when individual values do not fit the expectations of the firm. Individual alters behavior to conform to firm norms Voluntary departure of individual Individual blows the whistle on the firm Firing of the individual Firm alters behavior to conform to individual norms

Individual alters behavior to conform to firm norms Voluntary departure of individual Firing of the individual

Leader ethicality includes each of the following traits of behavior except Create an ethical environment to serve as role models for followers Intention to demonstrate descriptively appropriate conduct Create an environment that discourages acting unethically Intention to demonstrate normatively appropriate conduct

Intention to demonstrate descriptively appropriate conduct

Which of the following statements best describes the results of Arel's study? Internal auditor perceptions of the moral intensity of an issue determines whether a questionable accrual will be reported Ethical leadership plays no role in recording questionable entries Strong internal audit function has no influence on whether accrued journal entries are recorded Strong internal audit function and weak ethical leadership have no affect on perception of moral intensity of the issue

Internal auditor perceptions of the moral intensity of an issue determines whether a questionable accrual will be reported

Research by Ponemon found that (check all that apply): Leaders promote those whose moral reasoning match those of the leader Leaders of accounting firms set the tone for the organization There is a correlation between leaders and subordinates' decision-making styles Leaders promote those whose personal attributes conflict with those of the leader

Leaders promote those whose moral reasoning match those of the leader Leaders of accounting firms set the tone for the organization There is a correlation between leaders and subordinates' decision-making styles

The implications of the gender study on factors affecting decision making in public accounting include: Both males and females use a deliberative approach to ethical decision making Females were less likely to recommend conceding to clients wishes Males were less likely to recommend conceding to clients wishes Females use an intuitionist approach to decision making

Males were less likely to recommend conceding to clients wishes Females use an intuitionist approach to decision making

A responsible leader possess which of the following qualities (select all that apply): Ability to generate solutions based solely on financial benefits Moral awareness Ethical intelligence Empathy

Moral awareness Ethical intelligence Empathy

Ethical intelligence is a component of ethical leadership. Which of the following are components of ethical intelligence (select all that apply): Moral imagination Ethical sensitivity Professional obligation Reflection skills

Moral imagination Ethical sensitivity Reflection skills

Trevino suggests the pillars of ethical leadership include Community of people Moral manager Moral person Values-based leadership

Moral manager Moral person

Covey's principle-centered leadership approach can best be described as One's internal values should form the basis for self-interested behavior One's internal values should form the basis for external actions A method of making ethical decisions A method to align external values with external actions

One's internal values should form the basis for external actions

Which of the following factors contribute towards ethical leadership? Measuring ethical competence Personal ethical competence Being reliable and dependable Keeping promises which are profitable

Personal ethical competence Being reliable and dependable

An auditor's affinity for and identification with the audit profession is referred to as Commitment to the organization Commitment to colleagues Commitment to the firm Professional identity

Professional identity

Which of the following was not an attribute of internal audit leadership as a standard for ethical behavior? Courageousness Respect Reactiveness Empathy

Reactiveness

The underlying principles of ethical leadership include Loyalty Responsibility and accountability Integrity and honesty Closed-mindedness and selfishness

Responsibility and accountability Integrity and honesty

Traits of character of authentic leaders include each of the following except Confident Optimistic Rigid Courageous

Rigid

Which of the following statements best describes the link between followership and leadership? Followers are expected to take their cue from servant leader behavior Followership helps to create an ethical, trusting organizational climate Servant leaders should put the needs of followers before their own needs Servant leaders use coercion to influence followers' behavior

Servant leaders should put the needs of followers before their own needs

The purposes of organizational values include: (Select all that apply) Serve as a foundation for the GVV methodology Set the tone for the organization Serve as internal values of decision making Guide relationships with stakeholders Link to the mission of the organization

Set the tone for the organization Guide relationships with stakeholders Link to the mission of the organization

Which individual from the text identifies that the "CEO must have pristine ethics if there is to be any hope of ethical behavior from employees." Betty Vinson Cynthia Cooper Sherron Watkins Anthony Menendez

Sherron Watkins