Ethics Exam 2

The SEC's Advisory Committee on Improvements of Financial Reporting (CIFIR) developed a framework for accounting judgements consisting of which components?

A critical good faith thought process and documentation

Under the Sarbanes-Oxley Act, the auditors responsibility with respect to internal controls can best be stated as:

Access Managements report on internal controls

The business judgement rules refers to:

Acting with due care and good faith

Professional Skepticism can be best defined as having:

An inquiring mind and suspension of belief

The SEC has increased focus on identifying and penalizing misstatements in public company financials. What is one method that the SEC is using to identify companies, CEO's and CFO's that are misstating financial statements?

Analyzing patterns of internal control problems even absent a restatement of the financials.

A just or fair ethical decision occurs when:

Benefits and burdens are distributed equally

Integrity-based ethics programs:

Combines concern for the law with an emphasis on employee responsibility.

which of the following is not an example of an ethical criterion?

Corporate Driven

In the Loyalty and Fraud Reporting case, Ethan Lester pressured his friend Vic Jensen to: > Misappropriate funds from the company > Cover up Ethan's fraud > Be silent and not report Ethan's fraud to the audit committee >Give an unmodified audit report

Cover up Ethan's fraud (50,000)

As business becomes increasingly global:

Cross-Cultural Contradictions will increase

If a manager approaches ethics with benevolence in mind, he or she wouldn't stress what?

Friendly relations with an employee

The honest services fraud rule that was used by Jeff Skilling was successful because the U.S. Supreme court ruled that:

He did not accept bribes or kickbacks as an Enron officer

The ethical dissonance model looks at the ethical fit of the organizational and individual values. The optimal fit for an individual with high individual ethics would be: A. High-High B. High-Low C. Low-High D. Low-Low

High-High

All of the following are considered to be ethical issues for marketing professionals except:

Ignoring market fair dealing.

The main drawback to utilitarian reasoning is that:

It is difficult to accurately measure both costs and benefits.

In Case 4-6, Tax Shelters, the largest fine for marketing abusive tax shelters was levied on ____________ for $_________________.

KPMG 456 million

Safeguards implemented by the attest client include each of the following except:

Management Participation in the client by the attest firm.

Has SOX accomplished its intended goal of reliable financial reporting by public companies? A. Yes, as the CEO and CFO are certifying that financial statements contain no material misstatements. B. Maybe, as very few defendants have been charged with false certification, and fewer still have been convicted. C. Maybe, as laws are needed but they serve as only a minimum standard of ethical conduct and may not lead to ethical conduct. D. No, as the SEC has unsuccessfully sought to collected disgorgement of bonuses and other compensations of officers.

Maybe, as laws are needed but they serve as only a minimum standard of ethical conduct and may not lead to ethical conduct.

A company that channels employee behavior in a lawful direction by emphasizing the threat of detection and punishment is:

Operating under the compliance- based approach

With respect to whistleblowing, the Sarbanes-Oxley Act: A. Protects employees of publicly traded companies who provide evidence in fraud cases B. Confers legal protection on managers who reported wrongdoing by top executives C. Confers legal protection on the board of directors for fraudulent actions by management D. Protects auditors who blow the whistle to the SEC

Protects employees of publicly traded companies who provide evidence in fraud cases

An example of revenue overstatement is:

Recording gross, rather than net, revenue

Under the U.S. Corporate Sentencing Guidelines, if a firm has developed a strong ethics program, corporate executives found guilty of criminal activity may have their sentence:

Reduced

The primary issue in the Rooster, Hen, Footer and Burger case is: The timing of revenue recognition and shipping date of merchandise Related party transactions The timing of expense recognition on accrual accounts The accounting for walnuts

Related party transactions

A recent study found that, compared to the 1980's, managers today place what importance on moral values such as honesty and forgiveness?

Slightly more important

Which of the following is NOT an outright restriction on providing non attest services for an attest client?

Tax Services

A conception of right and wrong is: A. Impossible to know. B. The definition of ethics. C. Determined by power. D. Based on stakeholder dialogue.

The definition of ethics

The ACFE found that the most common way that fraud is first detected is:

Tip

The most significant change in the revised AICPA Code of Professional Conduct is:

Two Conceptual frameworks: one for members in public practice and one for CPAs in business

In the Vertical Pharmaceuticals case, Deloitte & Touche was sued because:

Vertical claimed the firm's false accusations of fraudulent conduct led to the withdrawal of another public company's planned acquisition of Vertica

The SEC filed civil false-certification charges against which U.S. Financial Institution?

Wells Fargo

During the investigations by the House Subcommittee on Oversight and investigations, a question that was raised was:

Where were the auditors?

The AOL-Time Warner case deals with

Whether a whistleblower was a hero or villain

If a manager approaches ethical issues with a self-centered approach, emphasis will be on:

economic efficiencey

Most ethics or compliance officers are generally entrusted to:

reduce the risks to the company of employee misconduct.