Exam 2 Chapter 7

24. How much is the average computer crime estimated to cost?

$200,000

12. What are the 4 steps of ethical decision making?

1. Define all the facts and circumstances, including who, what, where, when, and how. 2. Identify the people affected by the situation and their rights and obligations. 3. Identify the alternative decisions and consequences. 4. Make the decision: determine the right thing to do and then do it.

25. To prepare business leaders for the 21st century, the Association to Advance to Collegiate Schools of Business suggests what five fundamentals of education?

1. Personal integrity 2. Responsibility of businesses in society 3. Ethical decision making 4. Ethical leadership 5. Corporate governance

13. Enron financial scandal;

Considered to be the most infamous financial scandal in the U.S. Enron falsified its financial records to the public and lead to the creation of the Sarbanes-Oxley act of 2002.

11. A company's obligation to society, including the welfare of people and places affected by the company activities is called?

Corporate Social Responsibility (CSR)

8. What is the report published each year by Transparency International, providing metrics to the potential corruption risk for 174 countries?

Corruptions Perceptions Index (CPI)

17. What are examples of preventive controls?

Hiring competent and ethical employees, having written policies and procedures, providing for physical security of firm assets, keeping adequate documents and records.

4. A person of integrity has two essential characteristics: (1) knowledge about what morally constitutes the right thing to do and (2)?

The courage to do what's right and carry out the action

7. Values described in the BBB (Better Business Bureau) Code of Business Practices:

a. Build Trust b. Advertise Honesty c. Tell the Truth d. Be Transparent e. Honor Promises f. Be Responsive g. Safeguard Privacy h. Embody Integrity

26. What are some causes of problems associated with computer security?

a. Natural disasters b. Dishonest employees c. Disgruntled employees d. Persons external to the organization e. Accidental errors and omissions (greatest)

18. Internal Controls fit into what two categories?

a. Preventing accidental errors and internal misrepresentations (irregularities) b. Identifying errors and irregularities after they occur so that corrective actions can be taken

22. What are some mandates that companies with corporate social responsibility (CSR) strive to do?

a. Provide quality product and services to its customers b. Provide an appropriate return on investment to the company's stock holders c. Treat its employees with dignity and respect d. Meet its legal obligations e. Fairly deal with suppliers, lenders, and other business parties

5. You can make an ethical choice by asking all of the following questions:

a. What would your mother of father say if you acted that way? b. How would you feel if you saw your situation described in the newspaper? c. Does the situation "smell" bad? d. Would you use your behavior as a marketing tool?

20. The Sarbanes-Oxley Act increased the potential prison sentence for fraud to how many years?

25 years

21. Who perpetrated a financial scandal in the 1920's by using money received from later investors to provide early investors with returns on their investments?

Charles Ponzi

6. Integrity;

Adherence to moral and ethical principles; soundness of moral character; honesty. As practical matter, a person of integrity knows what is right and holds the courage to do it.

3. The branch of philosophy that addresses the values pertaining to human behavior, with regard to the "rightness" and "wrongness" of actions and the "goodness" and "badness" of the intent and results of such actions is called?

Ethics

14. WorldCom;

From 1999 to 2002, the company had manipulated earnings by using fraudulent accounting methods, thereby presenting false image of economic growth and prosperity. As a result, the company's stock price continued to climb when it should have been falling.

1. Do what is right, but filter the action by consideration of its consequences. Make a decision by considering the consequences if everyone made the same choice under similar circumstances. These statements refer to the?

Generalization Argument

15. Which financial scandal was associated with the presidency of Warren G. Harding?

The Teapot Dome Scandal of the 1920's

16. What refers to a system of rules and procedures designed to ensure the accuracy and reliability of financial and accounting information?

Internal Controls

19. Internal auditing is an example of?

Internal Controls

23. When did E-business and computer crime become common place with the development of the world wide web?

The 1990's

10. Asking oneself "Would I want others to treat me this way?" is an application of the principle of?

The Principle of Respect "the golden rule"

2. The government can force an individual to sell his or her land so that a road can be built for the benefit of the public as a whole is an example of?

Utilitarian Principle

9. Do what produces the greatest good. This statement is an example of?

Utilitarian Principle