Q&A Hero

Q: The problem with universal ethics is the idea that the ends justify the means.

Q: The concept of universal ethics argues that there are certain principles that should apply to a select few ethical judgments.

Q: The problem with utilitarianism is the focus on doing the most good for a select few, such as Adolf Hitler and his idea of launching a national genocide against Jews on the ethical grounds of restoring the Aryan race.

Q: The problem with ethics for the greater good is the idea that the ends justify the means.

Q: Ethics for the greater good is also referred to as utilitarianism.

Q: The problem with virtue ethics is that societies can place different emphasis on different virtues.

Q: Virtue ethics is the concept of living your life according to the similar virtues of different societies.

Q: Every religion in the world shares the Golden Rule.

Q: "Do unto others as you would have them do unto you" is the Golden Rule.

Q: Rules of appropriate individual behavior represent the idea that the moral standards we develop for ourselves impact our lives on a daily basis in our behavior and the other types of decisions we make.

Q: Simple truth is one of the four basic categories of ethics and can be expressed simply as doing the right thing.

Q: Happiness and health are examples of instrumental values that are pursued to reach another value.

Q: An intrinsic value means that the pursuit of one value is a good way to reach another value.

Q: A value system refers to a set of personal principles formalized into a code of behavior.

Q: The term "morals" is applied to a society, while the term "values" is used when referring to an individual.

Q: Standards of ethical behavior are absorbed by osmosis as individuals observe the examples, both positive and negative, set by everyone around them.

Q: Individuals acquire their personal moral standards in the same way that they learn the alphabet.

Q: Jason is a high-school senior whose peers are into drugs. He also has a family history of substance abuse. This will have no impact on his moral standards.

Q: Moral standards are independent of religious beliefs.

Q: A society is a closed, confined unit in which people have to follow a distinct religion.

Q: The field of ethics is the study of how people try to live their lives according to a standard of "right" or "wrong" behavior.

Q: What is insider trading?

Q: Which of the following provisions of the Sarbanes-Oxley Act requires lawyers to report concerns of wrongdoing if not addressed? a. Section 407 b. Section 301 c. Section 406 d. Section 307

Q: Section 307 of the Sarbanes-Oxley Act addresses the: a. rules of professional responsibility for attorneys. b. codes of ethics for senior financial officers. c. management assessment of internal controls. d. services outside the scope of auditors.

Q: Which of the following provisions of the Sarbanes-Oxley Act mandates majority of independents on any board and total absence of current or prior business relationships? a. Section 407 b. Section 301 c. Section 406 d. Section 307

Q: Section 201 of the Sarbanes-Oxley Act addresses the: a. rules of professional responsibility for attorneys. b. codes of ethics for senior financial officers. c. management assessment of internal controls. d. services outside the scope of auditors.

Q: Which provision of the Sarbanes-Oxley Act prohibits various forms of professional services that are determined to be consulting rather than auditing? a. Section 201 b. Section 301 c. Section 307 d. Section 404

Q: Which of the following statements is true of the Sarbanes-Oxley Act? a. It is also known as the Financial Services Modernization Act of 2002. b. It is enforced by the Financial Accounting Standards Board. c. It was passed by Congress because corporate boards failed to police themselves. d. It fails to provide oversight in terms of direct lines of accountability and responsibility.

Q: Which of the following statements is true of conflicts of interests? a. Self-interest makes it easy for individuals to fulfill their gatekeeper duties. b. Legal protection cannot shield professionals from conflicts of interests. c. Cross-selling of consulting services reduces conflicts of interests. d. Excessive executive compensation involves conflicts of interests.

Q: A professional is said to have _____ if he has a professional and ethical obligation to clients rooted in trust that overrides his personal interests. a. statutory duties b. executive rights c. creditor claims d. fiduciary duties

Q: A _____exists where a person holds a position of trust that requires that he exercise judgment on behalf of others, but where his personal interests conflict with those of others. a. duty of care b. community of interest c. conflict of interest d. duty of loyalty

Q: Which of the following gatekeepers guarantee that executives act on behalf of the stockholders interests? a. Accountants b. Board of directors c. Auditors d. Analysts

Q: Identify the gatekeepers who function as intermediaries between a companys stockholders and its executives. a. Accountants b. Auditors c. Board of directors d. Financial analysts

Q: Identify the gatekeepers who ensure that decisions and transactions conform to the law. a. Accountants b. Attorneys c. Auditors d. Analysts

Q: Identify the gatekeepers who evaluate a companys financial prospects or creditworthiness, so that banks and investors can make informed decisions. a. Investors b. Attorneys c. Auditors d. Analysts

Q: The function of auditors as gatekeepers is to: a. verify a companys financial statements so that investors decisions are free from fraud and deception. b. evaluate a companys financial prospects or creditworthiness, so that banks and investors can make informed decisions. c. ensure that decisions and transactions conform to the law. d. function as intermediaries between a companys stockholders and its executives.

Q: Which of the following rely on gatekeepers for fair and effective functioning of economic markets? a. Bankers b. Auditors c. Accountants d. Financial analysts

Q: Which of the following is true of gatekeepers? a. They are not bound to ethical duties. b. Investors and boards are examples of gatekeepers. c. They serve as intermediaries between market participants. d. They are not responsible for ensuring conformance to fairness in the marketplace.

Q: Insider trading is considered patently fair and ethical because it encourages employees to work hard to get access to company information.

Q: Laying-off of employees is one of the slowest ways to increase stock price.

Q: In terms of ethical theory, lofty compensation packages have a utilitarian function when they act as incentives for executives to produce greater overall results.

Q: Since audits are paid for by audited clients, there is an inherent conflict found in that financial arrangement.

Q: The board can prohibit actions to protect the long-term sustainability of a firm.

Q: Board members are permitted to act in a way that is inconsistent with the central goals of the organization.

Q: The COSO controls and the Sarbanes-Oxley requirements must be supported by a culture of accountability.

Q: COSO is one of the first efforts to address corporate culture in a quasi-regulatory framework in recognition of its significant impact on the satisfaction of organizational objectives.

Q: Risk assessment and ongoing monitoring are elements that comprise the control structure of the Sarbanes-Oxley Act.

Q: Risk assessment provides assessment capabilities to uncover vulnerabilities of a firm.

Q: While the Sarbanes-Oxley Act is an internal mechanism to ensure ethical corporate governance, the Committee of Sponsoring Organizations (COSO) is an external mechanism.

Q: The Sarbanes-Oxley Act is intended to provide protection where oversight did not previously exist.

Q: A large boost in share price decreases a firms equity leverage for external expansion.

Q: The most basic ethical issue facing professional gatekeepers and intermediaries in business contexts involves conflicts of interest.

Q: Financial analysts rely on gatekeepers but are not gatekeepers themselves.

Q: Briefly discuss the conflicts of interests involved in excessive executive compensation.

Q: How can lofty executive compensation serve corporate interests?

Q: How does the lack of shareholder activism and the conflicts between services offered by public accounting firms cause conflicts in financial markets?

Q: Discuss the conflicts surrounding accounting practices.

Q: What are the ethical responsibilities of board members?

Q: Explain the Federal Sentencing Guidelines for boards.

Q: Discuss the duties of care and good faith.

Q: Explain Enterprise Risk ManagementIntegrated Framework.

Q: What is control environment?

Q: Discuss the control structure elements of the COSO framework.

Q: What are the requirements of and the most significant criticism of the Sarbanes-Oxley Act?

Q: Which provisions of the Sarbanes-Oxley Act have the most impact on corporate governance and boards?

Q: Discuss how conflicts of interests can arise in a profession.

Q: Explain the significance of gatekeepers.

Q: Insider trading may be based on a claim of unethical misappropriation of _____, that is, knowledge only those in the firm should have.

Q: In order to prevent accountants from being put into conflicts, the _____ publishes professional rules.

Q: The _____ Guidelines offer boards some specifics regarding ways to mitigate eventual fines and sentences in carrying out duties by paying attention to ethics and compliance.

Q: COSO developed _____ to serve as a framework for management to evaluate and improve their firms prevention, detection, and management of risk.

Q: The _____ standards for internal controls moved audit, compliance, and governance from a numbers orientation to concern for the organizational environment.

Q: _____ refers to cultural issues such as integrity, ethical values, competence, philosophy, and operating style.

Q: _____ is a voluntary collaboration designed to improve financial reporting through a combination of controls and governance standards called the Internal ControlIntegrated Framework.

Q: The Public Accounting Reform and Investor Protection Act of 2002 is commonly known as the _____.

Q: Executive compensation packages based on _____ create huge incentives to artificially inflate stock value.

Q: The role of _____ is to ensure that those who enter into the marketplace are playing by the rules and conforming to the very conditions that ensure the market functions as it is supposed to function.

Q: Sara, an employee of PentaComp Inc., passed on confidential information of her company to her friend. Her friend benefitted from selling PentaComps stock based on the information shared by Sara. In this scenario, Sara can be convicted of _____. a. insider trading b. falsifying documents c. underreporting income d. evading taxes

Q: Which of the following exemplifies insider trading? a. Underreporting income b. Falsifying account documents c. Misappropriation of proprietary knowledge d. Illegally evading income taxes

Q: Which of the following scenarios gives rise to conflicts of interests in corporate governance? a. Senior executives determining the compensation received by board members b. Board members hand-selecting employees in their company c. A CEO not chairing the board of directors d. The absence of cross-fertilization of boards