Chapter 1 Review - Ethical Reasoning and Implications For Accounting
When considering the 3D Printing Case, rank the following steps for accounting professionals contemplating whistleblowing according to IMA ethical standards.
1. Discuss the matter with superiors 4. Have a coversation with an impartial
Utilitarianism may be of limited value in moral decision making because ______. A. it may be difficult to assign values to benefits and harms B. rules are ignored in decision making C. stakeholder considerations are not a factor D. harms may exceed benefits
Answer: A
The basic problem under justice theory is ______. A. implementing the ethics code B. determining who should determine the fair distribution of benefits and burdens C. assessing the rights of individuals D. determining morally relevant criteria to assess fair distribution of benefits and burden
Answer: D
Which of the following help mitigate the risks presented by workplace social networking? (Select all that apply) A. Formal social networking policies B. Employer commitment to an ethical culture C. Company social network pages D. Training on the use of social networks
Answers: A, B, D
In accounting, the concepts closest to honesty are ______. (Check all that apply) A. Full disclosure B. Deception C. Transparency D. Loyalty
Answers: A, C
Which of the following are characteristics of integrity? (Check all that apply) A. Trustworthiness B. Competence C. Self-reflection D. Non-responsiveness
Answers: A, C
Which of the following are features of egoism? (Check all that apply) A. Consequences of actions B. Acting in the best interests of others C. Pursuit of self-interest D. Acting in the public interest
Answers: A, C
Which of the following procedures help mitigate the inappropriate use of social networking at work? (Select all that apply) A. Codes of ethics that include proper usage of social networking sites B. Culture that encourages posting complaints online C. Consequences for those that violate company policies D. Formal social networking policies
Answers: A, C, D
Treating others fairly requires that we treat them ______. (Check all that apply) A. equally B. unequally C. judgmentally D. impartially
Answers: A, D
Virtues have been described as ______. (Check all that apply) A. Character traits B. Dispositions C. Attitudes D. Loyalty obligations E. Actions
Answers: A,B, C
A correct moral rule under rule utilitarianism might be ______. (Check all that apply) A. act in a way that maximizes utility B. don't subordinate judgment C. don't mislead others D. don't ignore best consequences
Answers: B, C
Identify the characteristic behaviors of high Individualism in workplace behavior. (Check all that apply) A. Acting in the best interests of others B. Greater possibility of blowing the whistle C.Pursuit of self-interest D. Loyalty to the group
Answers: B, C
In deciding how best to handle conflicts between rights, a useful perspective to consider is ______. (Check all that apply) A. whether any moral duties to individuals exist B. how the action would affect the basic rights of individuals C. prioritizing the rights D. weighing the consequences of actions
Answers: B, C
The ancient Greeks believed that what two things contributed to the choice of action? A. Laws B. Reason C. Thought D. Rules
Answers: B, C
The worth or dignity aspect of rights theory requires that ______. (Check all that apply) A. others should make decisions based on self-worth B. individuals should be treated as ends and not the means C. others should not use us in a way that is disrespectful D. individuals should be treated as a means to an end
Answers: B, C
What is the danger of covering up financial wrongdoing? (Check all that apply) A. It violates confidentiality. B. It violates integrity. C. It begins the slide down the ethical slippery slope. D. It violates the loyalty obligation to the client.
Answers: B, C
Which of the following are aspects of justice theory? (Check all that apply) A. Reference to one's feelings or interests B. Distribution of benefits and burdens C. Utilitarian calculation D. Giving each person what he or she deserves
Answers: B, D
Which of the following are features of enlightened egoism? (Check all that apply) A. Short-term perspective B. Considering the well-being of others C. Ignoring the interests of others D. Achievement of one's goal
Answers: B, D
According to Kant, the categorical imperative requires that ______. (Check all that apply) A. ethical action precedes moral intention B. we act according to maxims that could be universally accepted C. we lie when necessary to achieve an end result D. we never lie to mask the truth E. we act according to maxims that could be universally acted on
Answers: B, D, E
The ethical responsibilities of CPAs include ______. (Check all that apply) A. Be loyal to the interests of the employer B. Be loyal to the interests of a client C. Act in accordance with the accounting profession's ethical principles D. Act with integrity so as not to subordinate judgment
Answers: C, D
Which of the following are two important teleological philosophies that guide decision making in business decisions? A. Reputation B. Trustworthiness C. Egoism D. Citizenship E. Utilitarianism
Answers: C, E
If the client wants to claim a $3,000 charitable deduction for the current year's taxes but has no receipts or acknowledgment of the contribution, the CPA should ______. A. Withdraw from the engagement B. Contact the IRS and report the client C. Refuse to use the deduction and explain the criteria for the deduction to be taken D. Help the client create receipts so the deduction can be taken
C. Refuse to use the deduction and explain the criteria for the deduction to be taken
Which of the following is not an element of ethical relativism? A. Societal norms B. Cultural norms C. Universal moral standards D. Situation specifics
C. Universal Moral Standards
Characteristics of the moral _____ _____ _____ include considering the consequences on stakeholders and sometimes acting in the best interest of others.
Characteristics of the moral point of view include considering the consequences on stakeholders and sometimes acting in the best interest of others.
Obeying laws, being informed, and voting in elections are all important parts of ______. A. loyalty B. fairness C. caring D. citizenship
D. Citizenship
______ means to act on principle rather than expediency. A. Convenience B. Reliability C. Persistence D. Integrity
D. Integrity
The essence of caring is _____.
Empathy
Which group considers long-range objectives and the well being of others while their own self-interest remains paramount in decision-making?
Enlightened Egoists
Which brand of egoism claims that the promotion of one's own good is in accordance with morality?
Ethical Egoism
_____ decision making centers on how we act when no one is looking.
Ethical decision making centers on how we act when no one is looking.
Students often recognize cheating as an undesirable behavior but justify and rationalize cheating under certain circumstances, reflecting a _____ ethic.
Students often recognize cheating as an undesirable behavior but justify and rationalize cheating under certain circumstances, reflecting a situational ethic.
The exercise of due care with respect to the scope and nature of services performed requires the CPA firm to ______. (Check all that apply)
carry out its responsibilities in a professional manner establish adequate internal quality control procedures adequately supervise the performance of services
The expression "Act only according to that maxim by which you can at the same time will that it should become universal law" is known as the _____ _____.
categorical imperative
The due care standard calls for continued improvement in the level of _____ and quality of services.
competency
In considering whether to go outside the company, an accountant should be most concerned with his/her _____ obligation.
confidentiality
Each of the following are attributes of due care, except ______.
performing services regardless of one's abilities
Honesty, Fairness, and Objectivity are ethical _____ of the Institute of Management Accountants
principles
The foundation of the Principles in the AICPA Code includes ______. (Check all that apply)
public trust values of the profession
Regaining respect for the profession to enhance the public interest requires ______. (Check all that apply)
rebuilding the public trust restoring confidence in financial reporting
Ethical and professional behavior can be promoted and achieved through well designed _____.
regulations
The duties of an accounting professional are based on the _____ of investors and creditors.
rights
All those who enter a practice such as the accounting profession ______. (Check all that apply)
seek out the internal rewards of the practice accept the authority of professional standards
A person who acts responsibly does all of the following: ______. (Check all that apply) A. obscures the true purpose of actions B. acts with expediency C. considers alternative courses of action using ethical principles D. accepts the consequences of actions
Answers: C, D
The equality in the treatment of individuals under justice theory can best be expressed by ______. (Check all that apply) A. allocating resources based on preferential treatment B. equal distribution of benefits and burdens C. treating equals equally and unequals unequally D. fairly distributing the benefits and burdens
Answers: C, D
Which of the following are included in the IMA's overarching ethical principles? (Select all that apply)
Honesty Fairness Responsibility
Giving each person what he/she deserves is a way to describe _____.
Justice
Laws and ethical obligations can be characterized as follows: _____ _____ informs ethical obligations and _____ crate a minimum set of standards.
Laws and ethical obligations can be characterized as follows: moral philosophy informs ethical obligations and laws crate a minimum set of standards.
Which brand of egoism claims the promotion of one's own self-interest in accordance with reason?
Rational Egoism
Which of the following are true regarding regulation? (Select all that apply)
Regulation must be transparent. Regulation must be objectively determined.
The Golden Rule is best seen as a _____ principle.
The Golden Rule is best seen as a consistency principle.
What is the common element of ethics and moral?
The common element of ethics and morals is character.
The full disclosure of information leads to _____.
The full disclosure of information leads to honesty.
The philosophical view that there are no universal moral standards that are applied to all people at all times is associated with ethical _____.
The philosophical view that there are no universal moral standards that are applied to all people at all times is associated with ethical relativism.
The underlying attributes of ancient Greek Philosphy include _____ and ______.
The underlying attributes of ancient Greek Philosphy include excellence and happiness.
The Principles of the AICPA Code of Professional Conduct can best be described as ______.
aspirational statements
The virtues of truthfulness, trust, justice, courage, and honesty are the standards of _____ that characterize relationships within accounting practice.
excellelence
Rule deontologists believe that ethical behavior is based on ______.
general moral principles
Virtue ethics addresses ______. (Check all that apply)
internal traits of character, intentions of the decision maker
The audit opinion is strengthened by independence because ______. (Check all that apply)
it enhances assurances to the public conflicts of interest are avoided independence, both in fact and appearance, must exist
An unintended consequence of rights theory is that ______.
it might lead to disastrous consequences for others
When rights come into conflict, they need to be ______.
prioritized
Decisions that emphasize procedural justice are based on ______. (Check all that apply)
processes and activities that produce a particular outcome employee support for decision makers fairness of procedures used to make decisions
A questioning mind is essential to due care because it requires ______.
professional skepticism
The exercise of professional judgment is dependent on a mindset of _____ _____.
professional skepticism
When the rules are unclear, ethical decision making may require a person to take an action that may not be in his/her best interest. This is best described as ______.
the moral point of view
An effort was made to enhance confidence and public trust in financial reporting following ______.
the scandals at Enron and Worldcom
Characteristics of the moral point of view include ______. (Check all that apply) A. Always acting in one's own interest B. Sometimes acting in the best interests of others C. Situational ethical decision making D. Considering the consequences on stakeholders
Answers: B, D
Underlying the philosophy of rule deontology is the moral principle that ______. (Check all that apply) A. rules should be treated as guidelines in decision making B. the ends justify the means C. we should treat others the way we wish to be treated D. conformity to general moral principles should be based on logic
Answers: C, D
In teleology, an act may be considered morally right if it: ______. (Check all that apply) A. ignores self-interest B. ignores the interests of others C. produces more positive than negative consequences D. produces some desired result E. enhances self-interest
Answers: C, D, E
Each of the following are characteristics of objectivity, except ______.
conflicts of interest
Virtuous character traits developed in one's youth should include ______. (Check all that apply)
courage and wisdom, good habits of character
Objectivity in auditing is related to the justice theory by ______. (Check all that apply)
not subordinating judgment making impartial judgments
A(n) ______ is a justified claim on others.
right
Accountants who go along with fraudulent financial statements begin the slide down the ethical ______ ______.
slippery slope
Competence, Confidentiality, and Credibility are _____ of the Statement of Ethical Professional Practice of the Institute of Management Accountants.
standards
The philosopher Alasdiar MacIntyre relates virtue to community through ______. (Check all that apply)
standards of excellence internal rewards of practice
The primary ethical obligation of an accounting professional when financial wrongdoing exists is to ______.
take the necessary steps to correct the matter
One difference between virtue theory and other moral philosophies is ______.
virtue applies both to the decision maker and the act under consideration
Regardless of their circumstances in life, all people should be treated with _____.
Regardless of their circumstances in life, all people should be treated with dignity.
Teleologists evaluate the moral worth of behavior by looking at its _____.
Teleologists evaluate the moral worth of behavior by looking at its consequences.
Sliding down the ethical slippery slope can result from ______. A. acting with integrity B. giving in to internal pressures C. acting ethically because we believe it is the right way to behave D. being loyal to the public interest
B. Giving in to internal pressures
Which of the following is not a virtue? A. Truthfulness B. Rationalization C. Integrity D. Kindness
B. Rationalization
The ability to understand, be sensitive to, and care about the feelings of other is the definition of ______. A. respect B. responsibility C. empathy D. citizenship
C. Empathy
Deontology is focused on the ______ of a particular behavior. A. consequences B. outcomes C. intentions
C. Intentions
In accounting, the values of the profession are embedded in its codes of _____ that guide the actions of accountants and auditors in meeting their professional responsibilities.
In accounting, the values of the profession are embedded in its codes of ethics that guide the actions of accountants and auditors in meeting their professional responsibilities.
CPAs must avoid relationships that might otherwise impair audit _____.
Independence
Being honest and acting with integrity are two dimensions of _____.
Trustworthiness
A CMA compares the harms and benefits of recording the transactions in question versus not recording them. This is an application of ______.
Utilitarianism
A CPA should decline to perform audit services for a client when ______. (Check all that apply)
a conflict exists due to certain non-audit services performed for a client independence has been compromised
An act that causes embarrassment to the accounting profession is called ______.
acts discreditable
According to the Six Pillars of Character, the primary motivation for ethical action is ______.
According to the Six Pillars of Character, the primary motivation for ethical action is one's inner sense of right and wrong.
Which of the following hold that actions are the proper basis used to judge morality? A. Act deontologists B. Rule Egoists C. Rule deontologists D. Act Egoists
A. Act deontologists
Which of the following is a dimension of trustworthiness? A. Acting with integrity B. Being a caring individual C. Being a good citizen D. Being respectful
A. Acting with integrity
______ means to act on principle rather than expediency. A. Integrity B. Reliability C. Persistence D. Convenience
A. Integrity
In being good citizens, accountants and auditors should strive to enhance the reputation of ______. A. the accounting profession B. their clients C. the Internal Revenue Service D. their CPA firm
A. The accounting profession
When applied to decision making in accounting, rights theories might best be characterized by ______. A. the duty to ensure that the financial statements "present fairly" B. justified claims of the decision maker C. ends versus means D. justifying accounting treatment based on the interests of others
A. the duty to ensure that the financial statements "present fairly"
Using rights theory, the primary ethical obligation of an accountant is to ______. A. the venture capitalists B. his own self-interests C. company executives D. his direct supervisor
A. the venture capitalists
In decision making, an individual should ______. A. put his/her self-interest before the public interest B. rely on his/her moral principles as a guide C. rely strictly on rules and laws
Answer B
Identify the characteristics of ethical egoism (select the best statement). A. In the strong version, it is always good to promote one's own good. B. The ethical egoist should not pursue his/her own interests at a cost to others. C. In the weak version, it is never good to promote one's own good.
Answer: A
In applying a procedural justice perspective to an earnings management situation, an accountant should ______. A. assess support for decisions on the part of the company B. have the courage to withstand the pressure imposed by management to manipulate financial statements C. identify the harms and benefits of recording transactions versus not recording them D. ask oneself if others in a similar situation would complete an accounting manipulation
Answer: A
Under utilitarianism, lying is acceptable only when it ______. A. results in maximizing the net utility B. violates the basic rule of honesty C. leads to subordination of judgment D. helps to achieve our individual goals
Answer: A
Application of utilitarianism in ethical decision making can be difficult because ______. (Check all that apply) A. utilitarian costs can be difficult to determine B. utilitarian benefits can be difficult to determine C. there may not be any stakeholders in a particular situation D. consequences of actions may not exist
Answers: A, B
Rule utilitarianism considers which of the following in decision making? (Check all that apply) A. What rule will have the best consequences? B. What is the correct moral rule in this situation? C. What action will maximize net utility? D. What rule will maximize my self-interest?
Answers: A, B
The reputation of a CPA is built by performing professional services ______. (Check all that apply) A. competently B. confidentially C. expediently D. deliberately
Answers: A, B
Each of the following is an element of reliability that enhances ethical decision making. (Check all that apply) A. Follow through B. Moral duty C. Promise-keeping D. Egoism E. Carelessness
Answers: A, B, C
Utilitarianism requires that the decision maker should do the following: ______. (Check all that apply) A. determine consequences of action B. consider impartially the interests of stakeholders C. evaluate benefits and harms to stakeholders D. select the alternative that maximizes self-interest E. act in one's own self-interest
Answers: A, B, C
Which of the following are various forms of egoism? (Check all that apply) A. Ethical egoism B. Rational egoism C. Enlightened egoism D. Deontological egoism
Answers: A, B, C
The basic tenet of deontology is ______. A. enlightened egoism B. a duty to respect rights of others C. to maximize net benefits over harms D. a duty to satisfy employer interests
B. a duty to respect rights of others
Being _____ is not the same as following the law.
Being ethical is not the same as following the law.
Which of the following should not be a basis for fair decisions? A. Whistleblowing B. Performance evaluations C. Loyalty D. Resource allocations
C. Loyalty
Which of the following is not an ethical consideration for Madison in the 3D Printing case?
Determining how best to be loyal management in the company
One of the ethical limitations of deontology is that it ______. A. relies on consequences of actions B. considers rights and duties C. allows for exceptions to rules D. relies on moral absolutes
D. relies on moral absolutes
Ethical relativism is the belief that morality is relative to the _____ of one's culture.
Ethical relativism is the belief that morality is relative to the norms of one's culture.
Loyalty issues sometimes arise because ______. A. conflicts exist between honesty and integrity B. ethical values may conflict C. the controller and CFO adopt the same position D. self-interest overrides the employer's interests
Loyalty issues sometimes arise because (B) ethical values may conflict.
Which of the following elements of integrity are integral parts of the public trust? (Check all that apply)
Objectivity Due care Honesty and candidness
To keep an auditor's independence intact, ______.
an auditor's relationship with the client should not look like it will impair the objective judgment in the eyes of a reasonable observer