Accounting Ethics: Exam #1 Homework Questions

Using ethical reasoning, who is at fault in the Harvard Cheating scandal case?

(1) The professor; (2) teaching assistants, and; (3) the students who cheated.

Virtue ethics is:

doing what is right.

Internal rewards of accounting practice include:

integrity and excellence

A CPA would violate the Due Care Principle if he/she:

undertook a professional engagement without having the requisite background, knowledge and experience.

Greatest good for the greatest number of people is the theory of:

utilitarianism.

Which of the following is true of the relationship between civility and ethics?

One can be both civil and unethical.

Civility requires all but the following:

disregard.

If one's reputation is tainted it may create a:

lack of trust

The credibility standard in the Statement of Ethical Professional Practice of the IMA requires that an accounting professional should:

(1) communicate information fairly and objectively; (2) disclose all relevant information that might affect the users of the financial statements, and; (3) disclose delates or deficiencies in information, timeliness, processing or internal controls.

Which of the following elements is not an integral part of Rights Theory?

Act based on the consequences of one's actions on others.

Which of the following elements does NOT make up an integral part of what is meant by ethics?

Always following the law

Which of the following characteristics is NOT part of behaving with empathy?

Being loyal to one's friends

Which of the following characteristics does NOT describe the importance of integrity making?

Being loyal to one's superior.

Which of the following characteristics does NOT describe the behavior of Cynthia Cooper in the WorldCom fraud?

Conformity

When applying utilitarianism to judge action, what is the only thing that matters?

Consequences

A danger of situation ethics is that it can be used to rationalize a wrong-doing. Such rationalizations may be seen in all of the following examples except:

DigitPrint case discussed in the chapter.

When making a donation at the local Goodwill, Martha tells the clerk that her old computer is in perfect working order when she knows it is not, just so she can deduct more on her taxes. Which theory best describes Martha's behavior?

Egoism

Which of the following is NOT an element of trustworthiness according to the Six Pillars of Character?

Fairness

What is the one virtue that people should want in a boss, to trust a boss?

Honesty

What is the common characteristic of Aristotle's virtues and ethical standards for CPAs?

Integrity

Virtue ethics emphasizes development of good habits of character. What should be the greatest reward of practicing good habits of character, according to MacIntyre?

Internal rewards

Which of the following is NOT a pillar of character according to the Josephson Institute?

Judgmental

Bob is being pressured by his superior to go along with improper accounting and told he is expected to be a team player. Which of the following statements best characterizes those expectations?

Loyalty

Your managers asks you to «cook the books» to support a loan application at the local bank. The manager insists it is a one-time request. What should you do?

Refuse to go along with the request.

The country with the highest Power Distance score is:

Russia

Which of the following is false of active social networkers?

They are less likely to blow the whistle than coworkers.

In the Better Boston Beans case, what is the ethical dilemma facing Cyndie?

Trust of co-worker versus the honesty of the workplace.

Which of the following situations would be considered ethical?

You accidentally back into a car at Wal-MArt and leave you information for them to call.

Assume you are taking an exam and you clearly see that your friend is cheating. Your professor does not notice it. What is the most appropriate action for you to take if you are an ethical person?

You discuss the matter with your friend after the exam.

Responsibility goes hand-in-hand with:

accountability.

The method of ethical reasoning that evaluates actions in terms of harms and benefits is:

act utilitarianism.

The Independence Principle in the AICPA Code applies to:

all CPAs who render attestation services.

Jason is the fastest worker on the audit of a company for the firm Zits LLP. Other Zits workers take twice as long to complete the equivalent amount of work as Jason. One day Jason is approached by the other workers and is asked to slow down. One staff member said, "You are exceeding the time budge for the audit and making the rest of us look bad." From an organizational, ethical point of view, the best thing for Jason to do is:

approach the supervisor to discuss the pressure of fellow staff to slow down on doing audit work.

Under the IMA's standards of ethical practice, an accounting professional can consider informing authorities or individuals not employed by the organization when an ethical dilemma occurs about an accounting or financial reporting matter that remains unresolved if he/she:

believes there is a clear violation of the law.

In the NYC Subway Death, the reason that no bystanders helped Ki-Suck Han was probably due to:

bystander effect and moral blindness

In the Capitalization versus Expensing case, the main ethical issue is whether Gloria Hernandez should:

capitalize or expense one millions dollars of expenditures.

An accountant who blows the whistle on financial wrongdoing by his/her employer by going outside the entity violates:

confidentiality.

Teleology deals with:

consequences of actions.

George is in the middle of a high stakes poker game when he notices what he thinks is cheating by another player. It appears to George that this player took a card from his lap and switched it with a card that he was dealt. If George is a utilitarian thinker, he should:

consider what might happen if he accuses the player of cheating and he is wrong.

Aristotle believed that the choice of action was always preceded by:

deliberation.

The motive of "duty" is most associated with:

deontology.

Kevin Lowe's ethical dilemma in the Eating Time case can best be described as whether to:

devote time on an audit and not charge it to the job.

The best restatement of Kant's categorical imperative is:

do to others as you would have everyone do unto you.

Hofstede's Cultural Dimensions helps explain how workers from different cultures might react in the workplace. The Long-Term Orientation dimension could help explain the different approaches toward:

emphasizing short-term and long-term results.

The method of ethical reasoning that deals with making decisions after considering the interests of others is:

enlightened egoism.

Treating other fairly encompasses treating them:

equally, impartiality, and openly.

The relationship between legal and ethical can best be expressed as:

ethical behavior requires us to do more than required by the law and less than the law allows.

A difficult choice between two moral principles that are in conflict with one another is known as an"

ethical dilemma.

Decisions that are made based on the underlying cultural factors can be best characterized by:

ethical relativism

When an employee is given a job evaluation, he has a right to expect:

fair evaluations.

In the Cleveland Custom Cabinets case, the owner of the company thought it was all right to manipulate the financial statement numbers primarily because:

he was the sole owner of the company and controlled to board of directors.

Ty is a rising star at Texas State Country & Western Stores. He is the controller of the company. His wife, Rosie, is the lead auditor of the CPA firm that examines Country & Western's financial statements and issues an audit opinion. Given the nature of the relationships, Rosie would violate what ethical standard if she is allowed to conduct the audit:

independence.

Janice is a staff accountant in the accounting firm of Obama and Biden. She i assigned to the audit of HealthCare Associates. One the very first day, Janice noticed that the accounting manager of the client took money out of the petty cash fund and put it in his pocket. The best action for Janice to take is:

inform her immediate supervisor of what she observed.

Eddie paid an $8 restaurant check with a $10 bill. The waitress gave him $12 back. The most ethical action for Eddie is to:

inform the waitress of her overpayment.

Kelly is the controller of a small company. One day, the CFO comes in and tells her to lower the estimate of uncollectible accounts receivable. Kelly insists her numbers are correct as is. The CFO tells her it will mean her job at the company if she doesn't go along with the smaller estimate. The primary virtue that would enable Kelly to resist the pressure to manipulate the number is:

integrity.

The most important duty of public accounting is to the:

investing public.

The biggest problem in implementing a utilitarian approach to decision making is:

it can be difficult to weigh all the consequences of actions.

Respect is an important character of behavior because:

it encompasses attributes of how we should treat others.

The biggest problem in implementing a rights approach to decision making is:

it relies on moral absolutes.

The ethical reasoning method that is based on treating equals equally and unequals unequally is:

justice

Objectivity requires that a CPA should:

maintain a mental attitude of intellectual honesty and impartiality.

Ethical relativism can best be described as a:

point of view that morality is relative to the norms of one's culture.

Deontology deals with:

rights of others and duties toward them.

Utilitarian philosophers are divided into two types, act utilitarian and:

rule utilitarian.

The method of ethical reasoning that requires selecting the correct moral rule that produces the greatest benefits over harm is:

rule utilitarianism.

Decisions that are made based on the underlying circumstances of a particular matter can be best characterized by:

situational ethics

Michale Josephson, founder of the Josephson Institute of Ethics, is credited for developing:

the Six Pillars of Character.

The cultural value of individualism reflects:

the degree to which a society reinforces individual or collective achievement.

The Public Interest Principle in the AICPA Code of Professional Conduct recognizes:

the importance of whistleblowing in decision making.

In the Lone Star School District case, the auditors were mostly concerned about:

the lack of documentation for travel and entertainment expenses.

Social networking is the norm for many workers, and some workers spend at least 30 percent of their workday linked up to one or more networks. The Ethics Resource Center conducted a survey in which social networkers admitted each of the following except:

they always consider the consequences of their postings on others.

Steve is deep in debt due to a gambling problem. He is the bookkeeper for a family-owned business, Cal Poly Greenery. The company has only three employees - Steve, the husband, and the wife. All three have been friends for many years. One day the loan shark who lent Steve $20,000 comes knocking at his door asking for repayment of the loan. Steve convinces the loan shark to give him another day. The following day Steve writes a check on the company's books to himself for $20,000. Since he reconciles the bank accounts and prepares the financial statements, Steve knows it's unlikely the owners will ever know about what he has done. From an ethical perspective, Steve has:

violated the trust placed in him by the owners.

In the Giles and Regas case, the primary ethical issue can be stated as:

whether a superior should become involved in a dating relationship with a subordinate.

In the Shifty Industries case, the primary ethical issue can be stated as:

whether an accountant should claim a higher section 179 deduction ($100,000) than allowed by law.

The main issue in the Reneging on a Promise case is:

whether the student who accepted an offer from one CPA firm should back off from that promise in order to accept the offer of another firm deemed more preferable to the student.