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Q:
Who is Lavery?
a. CEO of Beech-Nut
b. Plant manager for Beech-Nut
c. Employee in Beech-Nut's purchasing department
d. Director of Research and Development for Beech-Nut Nutrition
Q:
What were the rumors around the industry about the concentrate products?
a. That there might be adulteration
b. That there would soon be a price increase
c. There were no rumors; the concentrate was the best the industry had seen
d. None of the above
Q:
Who is Jerome LiCari?
a. CEO of Beech-Nut
b. Plant manager for Beech-Nut
c. Employee in Beech-Nut's purchasing function
d. Director of Research and Development for Beech-Nut Nutrition
Q:
How far below market price were Interjuice's prices?
a. 15%
b. 20%
c. 50%
d. 30%
Q:
Which was not a business pressure Beech-Nut was feeling at the time of the juice controversy?
a. Heavy debt
b. 15% market share
c. Old plant in need of maintenance
d. Beech-Nut had all of the above threats
Q:
What is the length of Mr. Madoff's sentence?a. 10 yearsb. 18 yearsc. 25 yearsd. 150 years
Q:
Who was trying to have an investigation into Madoff's operation launched as of 2005?
a. The SEC
b. Harry Markopolos
c. Congress
d. NASD
Q:
Which of the following individuals knew nothing about Bernie Madoff's Ponzi scheme?a. Frank DiPascalib. Harry Markopolosc. The SECd. All of the above knew about his Ponzi scheme
Q:
Where was Bernie Madoff's secretive operation that had his computer and program for his investment techniques?a. Off-shore in the Cayman Islandsb. In West Palm beachc. On the 17th floor of his New York officesd. In Switzerland
Q:
Lehman Brothers (now bankrupt) was able to use an accounting strategy known as Repo 105 to spin debt off its books so that it appeared to be less leveraged than it was. Which of the following is correct?a. Lehman's accounting strategy was similar to that of Enron.b. Lehman's accounting strategy was similar to that of WorldCom.c. Lehman's accounting strategy was similar to that of Bausch & Lomb.d. Lehman's accounting strategy was similar to that of Tyco.
Q:
What term did the Westland/Hallmark Meat Company employees have to use in their processing work?
a. Stander
b. FDA approved
c. Authorized
d. Department of Education approved
Q:
How were the workers at Westland/Hallmark Meat Company compensated?a. By the hourb. By the number of cows processedc. By the number of cows slaughtered for meat productiond. By the evaluation of the federal agencies that regulate their production facilities
Q:
Which of the following are more likely to break the law?
a. Companies that are experiencing a downturn in sales
b. Companies that have had 7 consecutive quarters of losses
c. Companies that are high earnings performers
d. Companies that have just had a rapid changeover in leadership
Q:
What explanation did Krispy Kreme offer for not meeting its earnings targets in 2004?
a. The Atkins Diet craze
b. A change in accounting that was required by the SEC
c. A change in leadership
d. A change in the franchise structure of the company
Q:
Ronald Zarrella, the CEO of Bausch & Lomb in 2000, had to apologize for what?
a. The company not meeting its sales targets
b. Falsifying his credentials
c. The problems with ReNu contact lens solution
d. The MoistureLoc recall
Q:
In the Bausch & Lomb case, which of the following was not a technique of the sales force used to meet their numbers?
a. Red ball day
b. Target numbers
c. Selling product in gray markets
d. All of the above were sales force tactics
Q:
In the Bank of America/Merrill Lynch acquisition case, a federal judge blocked further action by the company:a. Until it could establish that its acquisition did not violate antitrust laws.b. Until it settled any state charges brought against Bank of America.c. Until Mr. Lewis resigned.d. Until there was further information regarding waiver of the attorney/client privilege.
Q:
The SEC and Bank of America reached a settlement over charges the SEC brought related to Bank of America's acquisition of Merrill Lynch:a. That resulted in no fine to Bank of America.b. That resulted in a $150 million fine paid by Bank of America.c. That resulted in the dissolution of Bank of America.d. That required Bank of America to cancel its acquisition of Merrill Lynch.
Q:
Which of the following was the focus of the Bank of America and Mayopoulos' dust-up during the Merrill Lynch acquisition?a. An accounting practice at Bank of Americab. The termination of outside legal counselc. The disclosure of the extent of losses at Merrilld. Ken Lewis's desire to retire
Q:
Following his meeting with the board of Bank of America, general counsel Timothy Mayopoulos:a. Was able to modify the company's public disclosures.b. Was able to go to the SEC.c. Was fired.d. Was given a promotion.
Q:
In the Bank of America case, former general counsel Timothy Mayopoulos was meeting with the Board of Bank of America:a. Because SOX requires that counsel report up to the board.b. Because SOX prohibited him from meeting with the CFO.c. Because outside counsel was not permitted to meet with the board.d. Because the SEC required him to do so.
Q:
Which of the following is prohibited conduct with respect to stock options?a. Backdatingb. Backdating with limitationsc. Springloadingd. All of the above
Q:
What defense did Jerome Kerviel, Joseph Jett, and Nick Leeson share?
a. That their managers were aware of their trades and how they were making money
b. That they had not been properly trained
c. That they were ordered to do what they did
d. That they were not subject to securities laws
Q:
Jerome Kerviel, Joseph Jett, and Nick Leeson had what in common?
a. They all went to jail
b. They all bankrupted or nearly bankrupted their companies
c. They all embezzled from their companies
d. None of the above
Q:
"What were they smoking?", was a Fortune headline that referred to:a. Bear Stearns.b. Goldman.c. J.P. Morgan Chase.d. All of the above
Q:
An employee who falsified sales figures at his company explained, "I felt I had no choice." The employee's conduct is best explained by:a. A lack of ethics training.b. The company culture.c. The failure to screen him out.d. None of the above
Q:
A bad barrel refers to:a. A company culture that directs employees to unethical conduct.b. A bad management team.c. Government.d. None of the above
Q:
Which of the following does Saul Gellerman believe is ineffective for preventing company ethical lapses?
a. Ethics training
b. Screening out unethical employees
c. Both a and b
d. None of the above
Q:
What is managerial ambivalence?
a. When a manager is confused about ethics
b. When a manager sends inconsistent signals on ethics
c. A manager who does not believe in incentive plans for meeting numbers
d. A manager who does not see the bottom line as most important
Q:
Andrew Fastow is an example of which category of moral development?a. Amoral technicianb. Moral sycophantc. Inherently morald. Moral chameleon
Q:
Mother Teresa is an example of which category of moral development?a. Morally superiorb. Moral sycophantc. Inherently morald. Moral postpone
Q:
A county commissioner who makes decisions on construction permits and zoning exceptions and approaches a hotel builder to lease space for her clothing store in his new hotel while his application for zoning and construction are pending has done nothing unethical.
Q:
There is no difference between taking an LSAT review course and using a law school application consultant.
Q:
The Diamond Walnuts case involved shifting earnings and expenses across years.
Q:
There have been 35 indictments of teachers and administrators since the discovery that test scores were manipulated.
Q:
Executive compensation increases are often awarded despite stock performance.
Q:
It is difficult for shareholders to have a voice in executive compensation.
Q:
Shareholders have the eventual say in executive compensation.
Q:
Home Depot's board refused to terminate CEO Nardelli despite shareholder demands.
Q:
Home Depot changed its annual meeting procedures in response to shareholders.
Q:
The fact that Dennis Kozlowski was not convicted in his first jury trial shows that he did nothing unethical.
Q:
FASB 125 has been eliminated because of Enron and its SPEs.
Q:
Acquisition accounting gave Tyco officers flexibility in reporting earnings.
Q:
Mark-to-market accounting gave corporate officers discretion in reporting earnings.
Q:
Andrew Fastow's role as an officer of an SPE was not a conflict of interest.
Q:
Loans to corporate executives are now illegal under Sarbanes-Oxley.
Q:
WorldCom's accounting issues involved capitalization of ordinary expenses.
Q:
If bankruptcy declaration is legal, then it is ethical.
Q:
Some recording artists use bankruptcy as a means for avoiding contract obligations.
Q:
Bankruptcies are on the increase.
Q:
Legal declaration of bankruptcy requires only a statement that debts exist.
Q:
Autocratic leaders do not contribute to false financial reporting.
Q:
Materiality is generally defined by accountants as a percentage range.
Q:
Enron used "mark to market" accounting.
Q:
Booking sales in advance of actual contracts is not a violation of accounting rules.
Q:
Earnings management is the use of accounting techniques to smooth earnings.
Q:
With respect to #68, a customer who agreed to help you with your shifting would not be engaged in unethical behavior.
Q:
With respect to #68, suppose you learn that other divisions within the company have always engaged in this form of earnings shifting. The practice is still an ethical breach.
Q:
Your unit has not been able to meet its sales goals for your quarter. Your assistant has suggested that you ship out enough goods to meet the quarterly goals by simply overshipping quantities on customer orders. When the goods are returned, you would simply take the returns in the next quarter after you have had more of an opportunity to meet goals. Your assistant's suggestion is a breach of ethics.
Q:
The failure of an auditor to disclose the possible obsolescence of a firm's major product is a judgment call and not an ethical issue.
Q:
Removing records from the workplace to prevent access by regulators on a pre-announced inspection is both illegal and unethical.
Q:
Royal Dutch's share price was not affected by its restatement of its reserves.
Q:
No officers at Royal Dutch were aware of the reserves overstatements.
Q:
Royal Dutch's restatement of its reserves did not affect its revenues.
Q:
Royal Dutch had overstated its reserves by 22%.
Q:
Explain how Ms. Winters began her habit of taking snack food while working at Walmart.
Q:
Mr. Scrushy was very generous in giving funds to his home town and charitable causes.
Q:
Compare the behaviors of William Aramony with those of Dennis Kozlowski. Are there signals these CEOs send with their behaviors?
Q:
No HealthSouth board members did business with Scrushy or HealthSouth.
Q:
Compare the New Era and Baptist Foundation cases. What common threads do you see?
Q:
The HealthSouth board knew very little about the creative accounting at HealthSouth.
Q:
List the types of ethical violations the Department of Interior uncovered in its MMS division?
Q:
The cost of options must be accounted for in the company's revenue statements.
Q:
Describe John Rigas, the former CEO of Adelphia.
Q:
Options can be priced at the time of the grant at whatever price the board establishes.
Q:
"Each time I see Jeff [Greenberg] I feel like I have a bull's eye on my forehead," was the statement of a CEO's direct report. Discuss how the culture at MMC was similar to the cultures of HealthSouth, Tyco, MiniScribe, Bausch & Lomb, and others.
Q:
The U.S. Supreme Court reversal of the Andersen conviction means that there were no ethical missteps by Andersen.
Q:
Make a list of the factors common to the cultures of Enron, WorldCom and Tyco.
Q:
David Duncan was indicted on obstruction charges and convicted.
Q:
Discuss the dangers in earnings management.