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

Multiple Choice Questions

Chapter 7 Managing Ethics Risks & Opportunities
1) Which of the following is not a dimension of the COSO Enterprise Risk Framework?
a.
b.
c.
d.
e.

Strategic
Monitoring
Operations
Reporting
Compliance

ANSWER: b
2) Which of the following is not a component of the COSO Enterprise Risk Framework?
a.
b.
c.
d.
e.

Risk assessment
Risk review
Internal environment
Information and communication
Control activities

ANSWER: b
3) Ethics and ethical corporate culture should likely play a vital role in setting:
a.
b.
c.
d.
e.

Control environment
Risk assessment
Information and communication
Monitoring
Control activities

ANSWER: a
4) Which of the following is a source of risk identified by both the AICPA/CICA and the Institute of
Internal Auditors:
a.
b.
c.
d.
e.

Environmental
Informational
Financial
Operational
All of the above

ANSWER: d
5) What is the recommended strategy when stakeholders potential for threat is HIGH and the
stakeholders potential for cooperation is HIGH?

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

a.
b.
c.
d.
e.

Monitor
Involve
Discuss
Defend
None of the above

ANSWER: e
6) What is the recommended strategy when stakeholders potential for threat is LOW and the
stakeholders potential for cooperation is HIGH?
a.
b.
c.
d.
e.

Monitor
Involve
Discuss
Defend
None of the above

ANSWER: b
7) The following three performance indicators are recommended by the Global Reporting Initiative:
a.
b.
c.
d.
e.

Economic, environmental and organizational

Environmental, financial and social
Economic, organizational and social
Environmental, financial and organizational
Cultural, environmental and social

ANSWER: b
8) The following performance component recommended by the Global Reporting Initiative relates to
customer health and safety, marketing communications and customer privacy:
a.
b.
c.
d.
e.

Labour practices
Human rights
Product responsibility
Society
Costumer rights

ANSWER: c
9) Auditors are mandated to assess the clients risk of financial reporting fraud. Auditing standard SAS99 considers the following a mandatory tool in fraud assessment:
a.
b.
c.
d.
e.

Discussion and brainstorming

Fraud triangle
Interviews with management
Development of fraud training programs
All of the above

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

10) Which of the following would be the least useful report of ethics risks and opportunities?
a.
b.
c.
d.
e.

By hypernorm value
By shareholder group
By product or service
By corporate objective
By reputation driver

ANSWER: b
11) Which the following best describes harassment?
a. Improper behaviour considered offensive by the victim, and the perpetrator knows that this is
an offensive behaviour
b. Improper behaviour considered offensive by society in general, and the perpetrator knows
that this is an offensive behaviour
c. Improper behaviour not considered offensive by the victim, and the perpetrator knows that
this is an offensive behaviour
d. Improper behaviour considered offensive by the victim, and the perpetrator does not know
that this is an offensive behaviour
e. Improper behaviour considered not offensive by the victim, and the perpetrator does not
know that this is an offensive behaviour
ANSWER: b
12) An employee in charge of counting and depositing cash holdings at end of the day urgently needs
some extra cash to pay her sons medical bills. Using the fraud triangle, this situation likely
constitutes:
a.
b.
c.
d.
e.

Motive
Rationalization
Opportunity
(a) and (b)
(a) and (c)

ANSWER: e
13) An employee in charge of the costumer service help line needs urgently some extra cash for paying
his sons hospital bills. Using the fraud triangle, this situation likely constitutes:
a.
b.
c.
d.
e.

Motive
Rationalization
Opportunity
(a) and (b)
(a) and (c)

ANSWER: a
14) An employee who thinks he is being treated unfairly because he is regularly working unpaid overtime
urgently, needs some extra cash. Using the fraud triangle, this situation likely constitutes:
Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010

a.
b.
c.
d.
e.

Motive
Rationalization
Opportunity
(a) and (b)
(a) and (c)

ANSWER: d
15) An employee in charge of the cash register at a busy restaurant steals small sums of money at the end
of the day whenever the cash in the register exceeds the sum of the days bills. He thinks it is fine to
do so because every day there are two or three costumers that pay more than they should. This type
of rationalization is based on:
a.
b.
c.
d.
e.

Everyone else is doing it

Denial of the victim
Condemnation of the condemners
Appeal to higher loyalties
Entitlement

ANSWER: b
16) An employee in charge of writing checks to suppliers in a manufacturing firm steals small sums of
money every month by writing himself a check for the total of the discounts he negotiates with the
companys suppliers. This type of rationalization is based on:
a.
b.
c.
d.
e.

Denial of responsibility
Denial of the victim
Condemnation of the condemners
Everyone else is doing it
Entitlement

ANSWER: e (the right answer could also be b)

17) An employee in charge of collecting tickets at the entrance of a movie theatre lets her friends enter
the theatre without paying for tickets. She thinks it is fine to do so because the employees at the
popcorn bar give free popcorn to their friends. This type of rationalization is because:
a.
b.
c.
d.
e.

Denial of responsibility
Denial of the victim
Everyone else is doing it
Appeal to higher loyalties
Entitlement

ANSWER: c
18) The following need is at the top of Maslows Hierarchy of Needs:
a. Esteem
b. Respect
c. Fulfillment
Business & Professional Ethics for Directors, Executives & Accountants, 5e,
L.J. Brooks & P. Dunn, Cengage Learning, 2010

d. Safety
e. Affinity
ANSWER: c
19) An important difference between anticipated and unanticipated crises is that:
a.
b.
c.
d.
e.

Unanticipated crises are easier to control than anticipated crises

Unanticipated crises have a less negative reputational impact than anticipated crises
Anticipated crises start much earlier than unanticipated crises
Anticipated crises are less costly than unanticipated crises
Anticipated crises have a longer uncontrolled period than unanticipated crises

ANSWER: d
20) Most of the damage is usually done in this phase of a crisis:
a.
b.
c.
d.
e.

Pre-crisis
Reputation restoration
Controlled
Uncontrolled
Post-crisis

ANSWER: d

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