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Accounting Final Exam Guide Test Bank

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Question;Chapter 1Multiple Choice Questions;Examining the interests of stakeholders is probably required;for;A value that is almost universally respected by stakeholder;groups is;Companies attempt to manage the risk of something happening that;will have a negative or positive impact on the company?s objectives, such as;Credit risksLitigation riskReputation riskEthics risksAll of the above;Most large corporations do not consider these risks in a broad;and comprehensive way;Operational risksReputational risksCredit risksMarket risksEthics risks;The following are examples of ethics risks faced by employees;Honesty and integrityFairness and compassionIntegrity and responsibilityFairness and integrityResponsibility and honesty;Not reporting environmental issues is an example of;Lack of transparencyLack of integrityLack of accuracyAll of the aboveNone of the above;Incomplete disclosure of the company?s revenue recognition;policy is an example of;Lack of transparencyLack of integrityLack of accuracyAll of the aboveNone of the above;This philosophical approach requires that an ethical decision;depends upon the duty, rights, and justice involved;ConsequentialismVirtue ethicsDuty ethicsRighteousnessDeontology;The Moral Standards Approach focuses on the following dimensions;of the impact of a proposed action;Net benefit to society, fair to all stakeholders, whether it is;rightNet benefit to society and;whether it is legalNet benefit to society, fair to all stakeholders, whether it is;legalFair to most stakeholders and whether it is rightNet benefit to society, fair to most stakeholders, whether it is;right;Effective crisis management could represent;An opportunity to avoid costsAn opportunity to change employee?s perspectives on riskAn opportunity to enhance the company?s reputationAll of the aboveNone of the above;Chapter 2 Multiple Choice Questions;In order to ensure an investment-grade credit rating, Enron;began to emphasize the following three actions:Reducing accruals, increasing cash flow, and lowering debtSmoothing accruals, increasing cash flow, and lowering debtIncreasing cash flow, lowering debt, and smoothing earningsIncreasing cash flow, lowering earnings and decreasing option;expenseIncreasing cash flow, lowering debt, and decreasing option expense;At the time of Enron?s collapse, the prevailing treatment for;employee stock option expense was;Record stock options only when and if exercised, at exercise;priceRecord all stock options when issued, at exercise priceRecord all stock options at market priceRecord stock options only when exercised at market priceRecord not exercised options at market price;Which of the following was not a conflict of interest;that Arthur Andersen?s personnel encountered?Auditing their own work as SPE consultantsLosing a very large clientA partner reviewed another partner?s workInternal debates about Enron?s questionable accounting;treatments were not discussed with the audit committeeAudit staff leaving the firm to work for Enron;Which of the following was not among Arthur Andersen?s;shortcomings in conducting Enron?s audit?Lack of competenceFailure of quality control standardsMisunderstanding of auditor?s fiduciary roleInconclusive testing of controlInsufficient information provided by Enron?s staff;In general terms, WorldCom overstated its reported net income;by;Generating false expensesBooking false revenueCapitalizing line costsAmortizing line costs quicker than allowed under GAAPRecognizing future period?s revenue;Chapter 3 Multiple Choice Questions;This philosopher argued that self-interest motivates people to;form peaceful civil societies;Adam SmithJohn LockeThomas HobbesJeremy BenthamJohn Rawls;Two weaknesses of the following approach are (1) it is difficult;to determine who demonstrates integrity in the workplace, and (2) it is difficult to choose between;compassion and not betraying somebody?s trust:DeontologyDistributive JusticeUtilitarianismMoral ImaginationVirtue Ethics;This approach presupposes that happiness, utility, pleasure;pain and anguish can be quantified:DeontologyDistributive JusticeUtilitarianismMoral ImaginationVirtue Ethics;This philosopher argued that social and economic inequalities;are just if these inequalities are to everyone?s benefit;Adam SmithJohn LockeThomas HobbesJeremy BenthamJohn Rawls;According to distributive justice theory, there are three main;criteria for determining the just distribution;Need, fairness, and meritNeed, arithmetic equality, and meritOpportunity, fairness, and meritOpportunity, fairness, and arithmetic equalityNeed, arithmetic equality, and equivalence;Chapter 4 Multiple Choice Questions;These costs can be measured indirectly by using costs incurred;in similar circumstances or mirror image alternatives:SurrogatesExternalitiesFuture impactsCollateral damagesEthical costs;This approach incorporates;the expected future impacts of a decision into the analysis;Virtue ethicsConsequentialismCost-benefit analysisRisk-benefit analysisAll of the above;(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, I?ve added a replacement question;at the end.);These values are the combinations of a value and the probability;of its occurrence;Probable valuesCommon valuesPresent valuesExpected valuesRisk-adjusted values;Which of the following is not one of the 5 questions in;Graham Tucker?s original approach to ethical decision making?;Is it profitableIs it right?Is it fair?Is it legal?Does it demonstrate the virtues expected?;The following three standards make up the moral standards;approach;Utilitarian, Individual rights, and JusticeUtilitarian, Individual rights, and FairnessLegal, Individual rights, and JusticeUtilitarian, Moral rights, and JusticeLegal, Moral rights, and Justice;Pastin?s approach adds the following concepts to stakeholder;impact analysis;Rule ethicsGround rule ethicsEnd-point ethicsSocial contract ethicsAll of the above;The following approach does not specifically incorporate;a thorough review of the motivation for the decisions involved, or the virtues;or character traits expected;5-question approachMoral standards approachPastin?s approachAll of the above(a) and (b) only;Lack of awareness of the following problem results in executives;not attributing enough value to the use of an environmental resource;Commons problemEthics problemValue problemRisk-assessment problemMoral problem;If a decision is expected to be unfair to a particular;stakeholder group, the decision may be improved by;Using stakeholder analysisUsing a decision making approachIncreasing the compensation to that stakeholder groupIncreasing the compensation to all stakeholder groupsAll of the above;Which of the following is not an example of a common;ethical decision-making pitfall?;Conforming to an unethical corporate cultureFocusing only on legalitiesConflicts of interestsFailure to identify all stakeholder groupsNone of the above;Failure to identify all relevant stakeholder groups for a proper;stakeholder impact analysis may be the result of:BiasConforming to an unethical corporate cultureConflicts of interestsFailure to consider the motivation for the decisionAll of the above;Completing the following steps in this order provides a sound;basis for challenging a proposed decision;Identify facts and stakeholders, rank stakeholders and their;interests, and assess the impact of the proposed actionIdentify a proper ethical decision framework, rank stakeholders;and their interests, and assess the impact of the proposed actionRank stakeholders and their interests, identify facts and stakeholders;and assess the impact of the proposed actionIdentify a proper ethical decision framework, identify facts and;stakeholders, and assess the impact of the proposed actionRank stakeholders and their interests, identify a proper ethical;decision framework, and assess the impact of the proposed action;Frequently, decision makers have been subject to unreasonable;expectations and unrealistic deadlines, this is an example of;Conforming to an unethical corporate cultureFocusing only on legalitiesConflicts of interestsFailure to identify all stakeholder groupsFailure to rank stakeholder interests;Chapter 5 Multiple Choice Questions;Corporations are now increasingly realizing that they are;accountable;Legally to shareholdersLegally to all stakeholdersStrategically to additional stakeholders(a) and (b)(a) and (c);The company?s internal auditors and the Ethics Officer should;report:Day-to-day to the CEODay-to-day to the Audit Committee of the Board of DirectorsRegularly to the Audit Committee of the Board of Directors;without management being present(a) and (c)(a) and (b)Experience has revealed that, to be effective, a code must be;reinforced by:Tone at the topEthics officer and internal auditorsA comprehensive ethical culturePrinciples, rules and examplesAll of the aboveWhich of the following is not an ethics risk management;principle?Normal definitions of risk are too narrow for stakeholder;accountabilityAssign responsibility, develop follow-up processes and board;reviewDiscovery and remediation are essentialThe code of ethics must be reviewed by independent partiesAn ethics risk exists when expectations of stakeholders may not;be metA conflict of interest exists when a given decision maker (D);and another person (P) are in the following situation:D has to exercise judgement in P?s behalfP has to exercise judgement in D?s behalfD has a special interest that interferes with proper judgement(a) and (b)(a) and (c)A potential conflict of interest exists when a given decision;maker (D) and another person (P) are in the following situation:P has a special interest that interferes with proper judgementD may have to exercise judgement in P?s behalfD has a special interest that interferes with proper judgement(a) and (b)(b) and (c)This is the preferred approach to deal with conflicts of;interestsManagementDisclosureRemediationAvoidanceAwarenessA fundamental problem examined by agency theory is how it is;possible to align:Shareholders? and stakeholders? goalsManager?s and stakeholders? goalsShareholders? and managers? goalsPrincipal?s and shareholders? goalsAgent?s and stakeholders? goalsThe 20/60/20 rule states that the total percent of employees who;could commit a fraudulent act is:20%60%80%100%None of the aboveWhich of the following is not a characteristic identified by;forensic experts in prospective fraud situations?High intelligenceGreedNeed for whatever is takenOpportunity to take advantageLow probability of being caughtThe primary focus of a compliance-based ethics program is:Preventing, detecting and punishing violations of the lawDefine organizational values and encourage employee commitmentImprove image and relationship with stakeholdersProtect management from blameAll of the aboveThe primary focus of an integrity-based ethics program is:Preventing, detecting and punishing violations of the lawDefine organizational values and encourage employee commitmentImprove image and relationship with stakeholdersProtect management from blameAll of the aboveThe most important factor in encouraging employee observance to;an ethics program is that employees perceive that it is;Compliance-based;Value-based;Achievement oriented;Stakeholder-based;Externally oriented;Building trust within an organization can have favourable impact;on employee?s willingness to share information and ideas in a process of:Ethical awarenessEthical awakeningEthical renewalEthical wave None of the aboveA Conference Board survey identified the following rationale for;developing codes of ethics:Make employees aware that adherence is critical to bottom-line;successProvide a statement of do?s and don?tsDiscuss what is expected in stakeholder relationshipsEstablish values and missionAll of the aboveThis code deals with ethics principles plus additional examples:CredoCode of ethicsCode of conductCode of practiceAll of the aboveWhich of the following is not a mechanism for monitoring;a code of ethics?Ethics audit or internal audit proceduresReviews by legal departmentAwards and bonusesAnnual sign-off by employeesEmployee surveysWhich of the following is not an example of emerging;public accountability standards or initiatives?SOX-404GRIAA-1000FTSE4GoodAll of the aboveSOX imposed the following new penalties for executives:FinesSuspensionCriminal prosecution for executivesReturn of ill-gotten gainsAll of the above

 

Paper#42704 | Written in 18-Jul-2015

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