Business Ethics 100 MCQs with Answers

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1.) Usually an ethical dilemma can be resolved with a satisfactory answer to the problem.

TRUE

FALSE

2.) The first step in resolving an ethical dilemma is to analyze the consequences.

TRUE

FALSE

3.) Due to aggressive competitors, Joe Smith feels pressured to lie to an important customer to keep the customer. He feels they will never discover the truth. With this ethical dilemma, the first thing Joe must do is analyze the actions without thinking about consequences.

TRUE

FALSE

4.) The final step in solving an ethical dilemma is to evaluate the results of your decision.

TRUE

FALSE

5.) Arthur Dobrin identified 15 questions you should consider when resolving an ethical dilemma.

TRUE

FALSE

6.) The process of ethical reasoning involves looking at the available information and then drawing conclusions based on that information in relation to our own ethical standards.

TRUE

FALSE

7.) Preconventional is the lowest level of Lawrence Kohlberg’s stages of ethical reasoning.

TRUE

FALSE

8.) The first stage of Lawrence Kohlberg’s stages of ethical reasoning is preconventional.

TRUE

FALSE

9.) The third stage of Kohlberg’s stages of ethical reasoning is law and order.

TRUE

FALSE

10.) In the third stage of Kohlberg’s stages of ethical reasoning, a person is focused on meeting the expectations of friends and coworkers and how something will affect their life.

TRUE

FALSE

11.) Because of the Sarbanes-Oxley Act, today, when employees are asked to do something that conflicts with their own personal values, seldom is the guidance from companies a series of clichés.

TRUE

FALSE

12.) “Do what’s legal” is an ethical cliché.

TRUE

FALSE

13.) Over the last four decades, corporate ethics has remained in the organizational mainstream.

TRUE

FALSE

14.) In resolving a truth versus loyalty dilemma, you must decide whether the decision will have short-term or long-term consequences.

TRUE

FALSE

15.) In resolving a justice versus mercy dilemma, you must answer whether you perceive the issue as a question of dispensing justice or mercy.

TRUE

FALSE

16.) An ethical dilemma is a situation in which there is a “right” versus “right” answer.

TRUE

FALSE

17.) Once you have reached a decision as to the type of conflict you are facing, the three resolution principles are: ends-based, rules-based, and the Golden Rule.

TRUE

FALSE

18.) If you utilize the rules-based resolution principle, you would consider which decision would provide the greatest good for the greatest number of people.

TRUE

FALSE

19.) If you utilize the Golden Rule resolution principle, you would utilize the principle: do unto others as you would have them do unto you.

TRUE

FALSE

20.) Andrew Young’s statement, “Nothing is illegal if a hundred businessmen decide to do it” is one of the commonly held rationalizations that can lead to misconduct.

TRUE

FALSE

21.) The accounting function is the certification of an organization’s financial statements as being accurate.

TRUE

FALSE

22.) Internal auditors provide counsel for improving controls, processes and procedures, performance, and risk management.

TRUE

FALSE

23.) The accounting profession is governed by a set of laws and established legal precedents.

TRUE

FALSE

24.) GAAP are accepted principles utilized as standard operating procedures within the industry.

TRUE

FALSE

25.) GAAP, like any operating standard, are open to interpretation and abuse.

TRUE

FALSE

26.) Corporations try to manage their expansion at a steady rate of growth.

TRUE

FALSE

27.) When corporations grow too quickly or steadily from year to year, investors may see them as in danger of falling behind their competition.

TRUE

FALSE

28.) It is legal to defer receipts from one quarter to the next to manage your tax liability.

TRUE

FALSE

29.) A set of accurate financial statements that present an organization as financially stable, operationally efficient, and positioned for strong future growth can do a great deal to enhance the reputation and goodwill of an organization.

TRUE

FALSE

30.) When a company’s financial statements have been certified by an objective third party to be “clean,” that certification is meant to be for the company’s benefit.

TRUE

FALSE

31.) A situation where one relationship or obligation places you in direct conflict with an existing relationship or obligation refers to value chain interest.

TRUE

FALSE

32.) Ethical CSR is the purest or most legitimate type of CSR in which organizations pursue a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to do the right thing for all their stakeholders.

TRUE

FALSE

33.) Ethical CSR is the purest or most legitimate type of CSR.

TRUE

FALSE

34.) Altruistic CSR is a philanthropic approach to CSR, in which organizations underwrite specific initiatives to give back to the company’s local community or to designated national or international programs.

TRUE

FALSE

35.) Economic CSR is the purest or most legitimate type of CSR.

TRUE

FALSE

36.) Altruistic CSR takes a philanthropic approach by giving back to the local community or to designated national or international programs.

TRUE

FALSE

37.) When Home Depot announced a direct cash donation of $1.5 million to support the relief and rebuilding efforts in areas devastated by Hurricane Katrina, this is an example of Economic CSR.

TRUE

FALSE

38.) When an organization uses strategic CSR, it faces the smallest risk of being perceived as using self-serving behavior.

TRUE

FALSE

39.) Strategic CSR targets programs that will generate the most positive publicity or goodwill for the organization.

TRUE

FALSE

40.) In contrast to the alleged immorality of altruistic CSR, critics argue that strategic CSR is ethically commendable since these initiatives benefit stakeholders while meeting fiduciary obligations to the company’s shareholders.

TRUE

FALSE

41.) One question in Salmon’s 22-question checklist includes: Is there one outside director for every insider?

TRUE

FALSE

42.) Simply having the mechanisms in place will, in itself, guarantee good governance.

TRUE

FALSE

43.) Enron maintained an audit committee consisting exclusively of nonexecutives.

TRUE

FALSE

44.) Enron maintained an audit committee consisting exclusively of nonexecutives, and the independent directors were not affiliated with organizations that benefited directly from Enron’s operations.

TRUE

FALSE

45.) A fiduciary responsibility is ultimately based on trust.

TRUE

FALSE

46.) A fiduciary responsibility is not a difficult trait to test when you are hiring a manager or enforcing, once that manager is in place.

TRUE

FALSE

47.) The base fine will normally be the greatest of: the monetary gain to the organization from the offense, the monetary loss from the offense caused by the organization to the extent the loss was caused knowingly, intentionally, or recklessly, or the amount determined by a judge based upon an FSGO table.

TRUE

FALSE

48.) The culpability score of the FSGO is the calculation of the degree of blame or guilt used as a multiplier of up to four times the base fine.

TRUE

FALSE

49.) One of the factors that can increase a culpability score is an organization’s effective program to prevent and detect violations of law.

TRUE

FALSE

50.) One of the factors that can increase a culpability score is that an organization willfully obstructed justice.

TRUE

FALSE

51.) In certain cases, a judge has the discretion to impose a “death penalty,” where the fine is set high enough to match all the organization’s assets.

TRUE

FALSE

52.) In certain cases, a judge has the discretion to impose a “death penalty;” when this is warranted the organization was operating primarily for a criminal purpose.

TRUE

FALSE

53.) Delegation of substantial discretionary authority is one step the FSGO prescribes to organizations in order to create an effective compliance program that minimizes its culpability score.

TRUE

FALSE

54.) The FSGO has prescribed ten steps for an effective compliance program.

TRUE

FALSE

55.) The first step of an effective compliance program, as prescribed by the FSGO, is management oversight.

TRUE

FALSE

56.) The three modifications to the guidelines to change corporate compliance programs are: requiring companies to periodically evaluate the effectiveness of their compliance programs, requiring evidence of actively promoting ethical conduct rather than just complying with legal obligations, and defining accountability more clearly.

TRUE

FALSE

57.) The Sarbanes-Oxley Act contains four sections, or title, and almost 30 subsections covering every aspect of the financial management of businesses.

TRUE

FALSE

58.) The Sarbanes-Oxley Act is a legislative response to the corporate accounting scandals and covers the financial management of businesses.

TRUE

FALSE

59.) The creation of the PCAOB as an independent oversight body was an attempt to reestablish the perceived independence of auditing companies that faced serious questioning after several corporate scandals.

TRUE

FALSE

60.) The Sarbanes-Oxley Act helps an organization create an ethical corporate culture.

TRUE

FALSE

61.) Prior to 2002, legal protection for whistleblowers did not exist.

TRUE

FALSE

62.) Since the Sarbanes-Oxley Act of 2002, Congress has taken an integrated approach to the matter of whistle-blowing by prohibiting retaliation against whistleblowers and by encouraging the act of whistle-blowing itself.

TRUE

FALSE

63.) The Sarbanes-Oxley Act of 2002 requires public companies not only to adopt a code of business ethics, but also to set up an internal apparatus to receive, review, and solicit employee reports concerning fraud and/or ethical violations.

TRUE

FALSE

64.) Employees who prevail in whistle-blower cases are entitled to damages, which include double their back pay.

TRUE

FALSE

65.) A whistleblower hotline can only be successful if trust exists between employees and their employer.

TRUE

FALSE

66.) Companies should be prompt and provide a thorough investigation of all complaints in today’s legal environment.

TRUE

FALSE

67.) If the investigation is perceived to be half-hearted or there is even the remotest suggestion of a cover-up, then the hotline will definitely never ring again.

TRUE

FALSE

68.) In today’s environment, experts highly recommended that becoming a whistleblower and taking your story public should be a first resort.

TRUE

FALSE

69.) After blowing the whistle on fraud, 90 percent of the whistle-blowers were fired or demoted.

TR(E

FALSE

70.) After blowing the whistle on fraud, most of the whistle-blowers said they wouldn’t blow the whistle again.

TRUE

FALSE

71.) If an employee receives formal notification that the company will monitor all e-mail and Web activity, and that notification makes clear that his/her continued employment with the company depends on the employee’s agreement to abide by that monitoring, then the employee has given thick consent.

TRUE

FALSE

72.) When jobs are plentiful and an employee would have no difficulty finding another position, then the consent given to the monitoring policy is thin consent.

TRUE

FALSE

73.) Though employees may resent the availability of technology that allows employers to monitor every key stroke on their computers, it is often the documents written on their machines that do the most harm.

TRUE

FALSE

74.) Parties charged with vicarious liability are generally in a supervisory role over the person or parties personally responsible for the injury or damage.

TRUE

FALSE

75.) Implied liability is a legal concept that a party may be held responsible for injury or damage, even if that party was not actively involved in the incident.

TRUE

FALSE

76.) Cyber-liability applies to the existing legal concept of liability to a new world—computers.

TRUE

FALSE

77.) There are many parallels between George Orwell’s novel, 1984, and the current debate over the right to privacy in the workplace.

TRUE

FALSE

78.) The liability argument and the recent availability of capable technology may be driving this move towards an Orwellian work environment.

TRUE

FALSE

79.) “Thou shalt not use a computer to monitor employees” is one of the ten commandments of computer ethics.

TRUE

FALSE

80.) “Contribute to the host country’s development” and “Respect the human rights of your employees” are two of the guidelines for organizations offered by Richard DeGeorge.

TRUE

FALSE

81.) Richard DeGeorge’s guidelines present something of an ethical ideal that reveal some of the most severe transgressions which have brought negative attention to the ethical behavior of MNCs.

TRUE

FALSE

82.) In the pursuit of profit and continued expansion, MNCs have been guilty of bribery, pollution, false advertising, and questionable product quality.

TRUE

FALSE

83.) At this time, only a handful of global companies are large enough to have a dramatic impact on trade levels just with their own internal transactions.

TRUE

FALSE

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84.) Enforcing ethical behavior, once it crosses national boundaries, becomes extremely difficult.

TRUE

FALSE

85.) Enforcing a global ethical standard would require the United Nations to set acceptable standards of behavior and appropriate consequences for failing to abide by those standards.

TRUE

FALSE

86.) In 1999 the UN Global Compact became operational.

TRUE

FALSE

87.) The UN Global Compact is a voluntary corporate citizenship initiative endorsing 10 key principles that focus on four key areas of concern: the environment, anticorruption, the welfare of workers around the world, and global human rights.

TRUE

FALSE

88.) The UN Global Compact is a voluntary corporate citizenship initiative endorsing 12 key principles that focus on five key areas of concern.

TRUE

FALSE

89.) The Global Compact is a regulatory instrument, which is relied upon to police, enforce, and measure the behavior or actions of companies.

TRUE

FALSE

90.) Global Citizenship represents a commitment to promote good corporate citizenship, with a focus on four key areas.

TRUE

FALSE

91.) An ethics policy commits a company to doing the right thing for all of its stakeholders; so a company must share that message with all of its stakeholders.

TRUE

FALSE

92.) In order to build a reputation of trust and commitment to customers, a company should seldom share the message of doing the right thing for all of its stakeholders with some of its stakeholders outside the company.

TRUE

FALSE

93.) Any organization’s commitment to ethical performance must be watched constantly

TRUE

FALSE

94.) The continued growth of technology will present new situations for ethical dilemmas.

TRUE

FALSE

95.) Typically, it is difficult for the code of ethics to become taken for granted, so other business issues normally do not to take priority over the code.

TRUE

FALSE

96.) Smaller companies need to include their code of ethics as part of any strategic planning exercise to make sure it is as up to date as possible.

TRUE

FALSE

97.) Many organizations have been prompted to introduce or modify their code of ethics after witnessing other CEOs public embarrassment.

TRUE

FALSE

98.) A transparent organization tends to avoid open and honest communication with all stakeholders.

TRUE

FALSE

99.) True ethical policies are proactive when the company develops a clear sense of what it stands for as an ethical organization, the extent of the actions it will take to get there, and what ethics means to that company and its stakeholders.

TRUE

FALSE

100.) The student of ethics who has gotten this far deserves much praise!

TRUE

FALSE

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