Business & Professional Ethics for Directors, Executives & Accountants, 6e

Multiple Choice Questions

Chapter 4 Practical Ethical Decision Making
1) The first resource for guidance when a businessperson or a professional accountant faces an ethical
problem should be:
a.
b.
c.
d.
e.

Commonly accepted social norms

Corporate and professional codes of conduct
Ethical decision-making frameworks
Commonly accepted philosophical approaches
All of the above

ANSWER: b
2) The AACSB Ethics Education taskforce has called for business students to be familiar with the
following approaches to ethical decision making:
a.
b.
c.
d.
e.

Consequentialism, deontology, and virtue ethics

Consequentialism, deontology, and moral imagination
Distributive justice, deontology, and virtue ethics
Distributive justice, deontology, and moral imagination
Consequentialism, deontology, and distributive justice

ANSWER: a
3) These are character traits that dispose a person to act ethically and thereby make that person a morally
good human being:
a.
b.
c.
d.
e.

Norms
Moral judgements
Virtues
Values
Ethical judgements

ANSWER: c
4) From a stakeholder point of view, which of the following must be satisfied for a decision to be
considered ethical?
a. The decision should demonstrate virtues reasonabley expected
b. The decision should result in more benefits than costs
c. The decision should not offend the rights of any other stakeholders
d. The distribution of benefits and burdens should be fair
e. All of the above must be satisfied for a decision to be considered ethical
ANSWER: e

Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010

5) The costs of environmental clean-ups absorbed by downstream individuals, companies, or

municipalities are referred to as:
a.
b.
c.
d.
e.

Surrogates
Externalities
Future impacts
Collateral damages
Ethical costs

ANSWER: b
6) These costs can be measured indirectly by using costs incurred in similar circumstances or mirror
image alternatives:
a.
b.
c.
d.
e.

Surrogates
Externalities
Future impacts
Collateral damages
Ethical costs

ANSWER: b
7) What is the most common measure of shareholder well-being:
a.
b.
c.
d.
e.

Profit or loss
Profit or loss plus externalities
Profit or loss plus cost-benefit analysis
Profit or loss plus risk-benefit analysis
All of the above

ANSWER: a
8) Which of the following is not a stakeholder right?
a. Life, heath and safety
b. To earn a reasonable return on an investment
c. Freedom of speech
d. Fair treatment before the law
e. All of the above are stakeholder rights
ANSWER: b
9) This approach incorporates the expected future impacts of a decision into the analysis:
a.
b.
c.
d.
e.

Virtue ethics
Consequentialism
Cost-benefit analysis
Risk-benefit analysis
All of the above

ANSWER: e (I do not understand the difference between Q8 and Q9; when are future impacts not
expected in an analysis? I think that Q8 should be deleted; Ive added a replacement question at the end.)
Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010

10) These values are the combinations of a value and the probability of its occurrence:
a.
b.
c.
d.
e.

Probable values
Common values
Present values
Expected values
Risk-adjusted values

ANSWER: d
11) Which of the following is not one of the 5 questions in Graham Tuckers original approach to ethical
decision making?
a.
b.
c.
d.
e.

Is it profitable
Is it right?
Is it fair?
Is it legal?
Does it demonstrate the virtues expected?

ANSWER: e
12) The following three standards make up the moral standards approach:
a.
b.
c.
d.
e.

Utilitarian, Individual rights, and Justice

Utilitarian, Individual rights, and Fairness
Legal, Individual rights, and Justice
Utilitarian, Moral rights, and Justice
Legal, Moral rights, and Justice

ANSWER: a
13) Pastins approach adds the following concepts to stakeholder impact analysis:
a.
b.
c.
d.
e.

Rule ethics
Ground rule ethics
End-point ethics
Social contract ethics
All of the above

ANSWER: e
14) The following approach does not specifically incorporate a thorough review of the motivation for the
decisions involved, or the virtues or character traits expected:
a.
b.
c.
d.
e.

5-question approach
Moral standards approach
Pastins approach
All of the above
(a) and (b) only
Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010

ANSWER: d
15) Lack of awareness of the following problem results in executives not attributing enough value to the
use of an environmental resource:
a.
b.
c.
d.
e.

Commons problem
Ethics problem
Value problem
Risk-assessment problem
Moral problem

ANSWER: a
16) If a decision is expected to be unfair to a particular stakeholder group, the decision may be improved
by:
a.
b.
c.
d.
e.

Using stakeholder analysis

Using a decision making approach
Increasing the compensation to that stakeholder group
Increasing the compensation to all stakeholder groups
All of the above

ANSWER: c
17) Which of the following is not an example of a common ethical decision-making pitfall?
a.
b.
c.
d.
e.

Conforming to an unethical corporate culture

Focusing only on legalities
Conflicts of interests
Failure to identify all stakeholder groups
None of the above

ANSWER: e
18) Failure to identify all relevant stakeholder groups for a proper stakeholder impact analysis may be the
result of:
a.
b.
c.
d.
e.

Bias
Conforming to an unethical corporate culture
Conflicts of interests
Failure to consider the motivation for the decision
All of the above

ANSWER: e
19) Completing the following steps in this order provides a sound basis for challenging a proposed
decision:
a. Identify facts and stakeholders, rank stakeholders and their interests, and assess the impact of
the proposed action
Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010

b. Identify a proper ethical decision framework, rank stakeholders and their interests, and assess
the impact of the proposed action
c. Rank stakeholders and their interests, identify facts and stakeholders, and assess the impact of
the proposed action
d. Identify a proper ethical decision framework, identify facts and stakeholders, and assess the
impact of the proposed action
e. Rank stakeholders and their interests, identify a proper ethical decision framework, and
assess the impact of the proposed action
ANSWER: a
20) Frequently, decision makers have been subject to unreasonable expectations and unrealistic deadlines,
this is an example of:
a.
b.
c.
d.
e.

Conforming to an unethical corporate culture

Focusing only on legalities
Conflicts of interests
Failure to identify all stakeholder groups
Failure to rank stakeholder interests

ANSWER: a

Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010