Chapter 8 Review

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

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

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

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

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

A. Consistent and persuasive communication with employees

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

A. Create change in individuals and social systems

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

A. Effective internal audit function

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

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

While working at the Defense Contract Audit Agency, Diem-Thi Le's working papers were changed by her supervisor because: A. Le concluded the contractor's system was inadequate B. Le's productivity rate was too high C. Le refused to go along with her supervisor's demands D. Le concluded the contractor's system was adequate

A. Le concluded the contractor's system was inadequate

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

Answers: A, B

What motivated Diem-Thi Le's supervisor at the Defense Contract Audit Agency to change her working papers? A. Make it appear that audit risk was low on contractor-clients B. Make it appear the audit work was more efficient C. Branch manager signed the audit report D. Le's audit was deficient

Answers: A, B

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

Answers: A, B, C

The outcome of responsible leadership includes A. Ethical competencies B. Ethical culture C. Ethical leadership D. Personal ethical skills E. Ethical rules of conduct

Answers: A, B, C

A responsible leader possess which of the following qualities (select all that apply): A. cognitive abilities B. emotional abilities C. timeliness D. moral

Answers: A, B, D

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

Answers: A, B, D

Ethical leadership failure can be attributed to A. organizational factors B. undefined ethical boundaries C. individual factors D. moral intensity

Answers: A, C

In the case of Diem-Thi Le, select all of the ways that Le identified that her identity as a whistleblower was not protected: A. Le was advised by a supervisor to seek mental health counseling B. Le was the only auditor rated as outstanding that received a performance award C. Le was transferred to another audit team

Answers: A, C

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

Answers: A, C

Which of the following are ethical dilemmas that Diem-Thi Le faced while working for the Defense Contract Audit Agency (select all that apply): A. modified audit findings B. misallocation of bad debt expenses C. misallocation of costs to government contracts D. deleted audit working papers

Answers: A, C, D

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

Answers: A, C, E

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

Answers: A, C, E, F

Trevino suggests the pillars of ethical leadership include A. Moral manager B. Values-based leadership C. Community of people D. Moral person

Answers: A, D

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

Answers: A, D, E

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

Answers: B, C

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

Answers: B, C

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

Answers: B, C

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

Answers: B, C, D

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

Answers: B, C, D

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

Answers: B, D

The systematic evaluation of the moral intensity of an issue influences A. magnitude of consequences B. judgments of ethicality C. culture of the organization D. likelihood of whistleblowing

Answers: B, D

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

Answers: B, D

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

Answers: B, D

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

Answers: B, D, E

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

Answers: B, D, E

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

Answers: C, D

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

Answers: C, D

The underlying principles of ethical leadership include A. Closed-mindedness and selfishness B. Loyalty C. Integrity and honesty D. Responsibility and accountability

Answers: C, D

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

B. Intention to demonstrate descriptively appropriate conduct

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

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

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

B. Professional identity

Ethical leaders should be guided by A. Self-interest B. Virtues and values C. Costs and benefits to the community D. Profits to the community

B. Virtues and values

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

B. a level of excellence

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

B. persistence

While she was working at the Defense Contract Audit Agency, Diem-Thi Le's annual performance evaluation was changed: A. to downgrade her performance from fully successful to successful B. to downgrade her performance from outstanding to fully successful C. because she was unable to complete the audit on a timely basis D. and she was put on a performance improvement plan

B. to downgrade her performance from outstanding to fully successful

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

C. A disconnect exists between tax and non-tax partners

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

C. Acting out of self-interest

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

C. Encourages self-reflection on one's leadership skills

While working for the Defense Contract Audit Agency, Diem-Thi Le was faced with an ethical dilemma when: A. Her supervisor took credit for Le's audit conclusions B. The contractor-client threatened to report Le to the regional manager C. Her supervisor deleted the audit findings from Le's working papers D. The contractor-client threatened to go to her supervisor unless the audit opinion was changed

C. Her supervisor deleted the audit findings from Le's working papers

Which of the following is not a factor that influences trainee auditors' willingness to report wrongdoing? A. Situational variables B. Audit firm organizational structures C. Personal characteristics of target of whistleblowing D. Personal characteristics of whistleblowers

C. Personal characteristics of target of whistleblowing

Social learning theory can be defined as A. how leaders alter their behavior to meet follower expectations B. a way to understand parallel deviance C. a way to understand how leaders influence followers in a general way D. a way to understand how followers influence leaders in a general way

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

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: A. Cynthia Cooper B. Anthony Menendez C. Diem-Thi Le D. Betty Vinson

D. Betty Vinson

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

D. Build long-term shareholder value

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

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

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." A. Cynthia Cooper B. Anthony Menendez C. Betty Vinson D. Sherron Watkins

D. Sherron Watkins

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

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

Organizational values Individual values

Should be visible within the organization Are internal to the being of the individual

The longer an individual persists in attempting to resolve an issue, the more likely one's commitment to a _____ versus the organization becomes an influencing factor in determining whether to report wrongdoing. (Enter one word per blank)

colleague

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

colleague

Internal reporting mechanisms are strengthened by developing _____ systems to facilitate such reporting. (Enter one word per blank)

ethical

moral person moral manager moral organization

honesty and integrity strong ethics message role of leadership

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. (Enter one word per blank)

magnitude of consequences

Stronger perceptions of the ethical environment are associated with a stronger public interest responsibility and a higher frequency of receiving _____. (Enter one word per blank)

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

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. (Enter one word per blank)

organizational values

Trainee auditors are more likely to report wrongdoing internally when a firm has a system of _____ _____ to report internally. (Enter one word per blank)

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. (Enter one word per blank)

social

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

true

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

true