Accounting Final Exam Guide Test Bank

Accounting Final Exam Guide Test Bank

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Chapter 1Multiple Choice Questions



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  1. Examining the interests of stakeholders is probably required
for:
    

    

    

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  1. A value that is almost universally respected by stakeholder
groups is:









  1. Companies attempt to manage the risk of something happening that
will have a negative or positive impact on the company’s objectives, such as:






    1. Credit risks
    2. Litigation risk
    3. Reputation risk
    4. Ethics risks
    5. All of the above




















  1. Most large corporations do not consider these risks in a broad
and comprehensive way:






    1. Operational risks
    2. Reputational risks
    3. Credit risks
    4. Market risks
    5. Ethics risks




















  1. The following are examples of ethics risks faced by employees:






    1. Honesty and integrity
    2. Fairness and compassion
    3. Integrity and responsibility
    4. Fairness and integrity
    5. Responsibility and honesty




















  1. Not reporting environmental issues is an example of:






    1. Lack of transparency
    2. Lack of integrity
    3. Lack of accuracy
    4. All of the above
    5. None of the above




















  1. Incomplete disclosure of the company’s revenue recognition
policy is an example of:






    1. Lack of transparency
    2. Lack of integrity
    3. Lack of accuracy
    4. All of the above
    5. None of the above




















  1. This philosophical approach requires that an ethical decision
depends upon the duty, rights, and justice involved:






    1. Consequentialism
    2. Virtue ethics
    3. Duty ethics
    4. Righteousness
    5. Deontology




















  1. The Moral Standards Approach focuses on the following dimensions
of the impact of a proposed action:






    1. Net benefit to society, fair to all stakeholders, whether it is
right
    2. Net benefit to society and
whether it is legal
    3. Net benefit to society, fair to all stakeholders, whether it is
legal
    4. Fair to most stakeholders and whether it is right
    5. Net benefit to society, fair to most stakeholders, whether it is
right























  1. Effective crisis management could represent:






    1. An opportunity to avoid costs
    2. An opportunity to change employee’s perspectives on risk
    3. An opportunity to enhance the company’s reputation
    4. All of the above
    5. None of the above























Chapter 2 Multiple Choice Questions



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  1. In order to ensure an investment-grade credit rating, Enron
began to emphasize the following three actions:
    1. Reducing accruals, increasing cash flow, and lowering debt
    2. Smoothing accruals, increasing cash flow, and lowering debt
    3. Increasing cash flow, lowering debt, and smoothing earnings
    4. Increasing cash flow, lowering earnings and decreasing option
expense
    5. Increasing cash flow, lowering debt, and decreasing option expense






























  1. At the time of Enron’s collapse, the prevailing treatment for
employee stock option expense was:






    1. Record stock options only when and if exercised, at exercise
price
    2. Record all stock options when issued, at exercise price
    3. Record all stock options at market price
    4. Record stock options only when exercised at market price
    5. Record not exercised options at market price




















  1. Which of the following was not a conflict of interest
that Arthur Andersen’s personnel encountered?
    1. Auditing their own work as SPE consultants
    2. Losing a very large client
    3. A partner reviewed another partner’s work
    4. Internal debates about Enron’s questionable accounting
treatments were not discussed with the audit committee
    5. Audit staff leaving the firm to work for Enron
























  1. Which of the following was not among Arthur Andersen’s
shortcomings in conducting Enron’s audit?
    1. Lack of competence
    2. Failure of quality control standards
    3. Misunderstanding of auditor’s fiduciary role
    4. Inconclusive testing of control
    5. Insufficient information provided by Enron’s staff



























  1. In general terms, WorldCom overstated its reported net income
by:






    1. Generating false expenses
    2. Booking false revenue
    3. Capitalizing line costs
    4. Amortizing line costs quicker than allowed under GAAP
    5. Recognizing future period’s revenue
































Chapter 3 Multiple Choice Questions



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  1. This philosopher argued that self-interest motivates people to
form peaceful civil societies:






    1. Adam Smith
    2. John Locke
    3. Thomas Hobbes
    4. Jeremy Bentham
    5. John Rawls























  1. 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:
    1. Deontology
    2. Distributive Justice
    3. Utilitarianism
    4. Moral Imagination
    5. Virtue Ethics



























  1. This approach presupposes that happiness, utility, pleasure,
pain and anguish can be quantified:
    1. Deontology
    2. Distributive Justice
    3. Utilitarianism
    4. Moral Imagination
    5. Virtue Ethics
























  1. This philosopher argued that social and economic inequalities
are just if these inequalities are to everyone’s benefit:






    1. Adam Smith
    2. John Locke
    3. Thomas Hobbes
    4. Jeremy Bentham
    5. John Rawls




















  1. According to distributive justice theory, there are three main
criteria for determining the just distribution:






    1. Need, fairness, and merit
    2. Need, arithmetic equality, and merit
    3. Opportunity, fairness, and merit
    4. Opportunity, fairness, and arithmetic equality
    5. Need, arithmetic equality, and equivalence




















Chapter 4 Multiple Choice Questions



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  1. These costs can be measured indirectly by using costs incurred
in similar circumstances or mirror image alternatives:
    1. Surrogates
    2. Externalities
    3. Future impacts
    4. Collateral damages
    5. Ethical costs



























  1. This approach incorporates
the expected future impacts of a decision into the analysis:






    1. Virtue ethics
    2. Consequentialism
    3. Cost-benefit analysis
    4. Risk-benefit analysis
    5. All 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.)






  1. These values are the combinations of a value and the probability
of its occurrence:






    1. Probable values
    2. Common values
    3. Present values
    4. Expected values
    5. Risk-adjusted values




















  1. Which of the following is not one of the 5 questions in
Graham Tucker’s original approach to ethical decision making?






    1. Is it profitable
    2. Is it right?
    3. Is it fair?
    4. Is it legal?
    5. Does it demonstrate the virtues expected?




















  1. The following three standards make up the moral standards
approach:






    1. Utilitarian, Individual rights, and Justice
    2. Utilitarian, Individual rights, and Fairness
    3. Legal, Individual rights, and Justice
    4. Utilitarian, Moral rights, and Justice
    5. Legal, Moral rights, and Justice




















  1. Pastin’s approach adds the following concepts to stakeholder
impact analysis:






    1. Rule ethics
    2. Ground rule ethics
    3. End-point ethics
    4. Social contract ethics
    5. All of the above




















  1. The following approach does not specifically incorporate
a thorough review of the motivation for the decisions involved, or the virtues
or character traits expected:






    1. 5-question approach
    2. Moral standards approach
    3. Pastin’s approach
    4. All of the above
    5. (a) and (b) only




















  1. Lack of awareness of the following problem results in executives
not attributing enough value to the use of an environmental resource:






    1. Commons problem
    2. Ethics problem
    3. Value problem
    4. Risk-assessment problem
    5. Moral problem




















  1. If a decision is expected to be unfair to a particular
stakeholder group, the decision may be improved by:






    1. Using stakeholder analysis
    2. Using a decision making approach
    3. Increasing the compensation to that stakeholder group
    4. Increasing the compensation to all stakeholder groups
    5. All of the above



















  1. Which of the following is not an example of a common
ethical decision-making pitfall?






    1. Conforming to an unethical corporate culture
    2. Focusing only on legalities
    3. Conflicts of interests
    4. Failure to identify all stakeholder groups
    5. None of the above



















  1. Failure to identify all relevant stakeholder groups for a proper
stakeholder impact analysis may be the result of:
    1. Bias
    2. Conforming to an unethical corporate culture
    3. Conflicts of interests
    4. Failure to consider the motivation for the decision
    5. All of the above
























  1. Completing the following steps in this order provides a sound
basis for challenging a proposed decision:






    1. Identify facts and stakeholders, rank stakeholders and their
interests, and assess the impact of the proposed action
    2. Identify a proper ethical decision framework, rank stakeholders
and their interests, and assess the impact of the proposed action
    3. Rank stakeholders and their interests, identify facts and stakeholders,
and assess the impact of the proposed action
    4. Identify a proper ethical decision framework, identify facts and
stakeholders, and assess the impact of the proposed action
    5. Rank stakeholders and their interests, identify a proper ethical
decision framework, and assess the impact of the proposed action




















  1. Frequently, decision makers have been subject to unreasonable
expectations and unrealistic deadlines, this is an example of:






    1. Conforming to an unethical corporate culture
    2. Focusing only on legalities
    3. Conflicts of interests
    4. Failure to identify all stakeholder groups
    5. Failure to rank stakeholder interests
















Chapter 5 Multiple Choice Questions



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  1. Corporations are now increasingly realizing that they are
accountable:






    1. Legally to shareholders
    2. Legally to all stakeholders
    3. Strategically to additional stakeholders
    4. (a) and (b)
    5. (a) and (c)




















  1. The company’s internal auditors and the Ethics Officer should
report:
    1. Day-to-day to the CEO
    2. Day-to-day to the Audit Committee of the Board of Directors
    3. Regularly to the Audit Committee of the Board of Directors
without management being present
    4. (a) and (c)
    5. (a) and (b)
  2. Experience has revealed that, to be effective, a code must be
reinforced by:
    1. Tone at the top
    2. Ethics officer and internal auditors
    3. A comprehensive ethical culture
    4. Principles, rules and examples
    5. All of the above
  3. Which of the following is not an ethics risk management
principle?
    1. Normal definitions of risk are too narrow for stakeholder
accountability
    2. Assign responsibility, develop follow-up processes and board
review
    3. Discovery and remediation are essential
    4. The code of ethics must be reviewed by independent parties
    5. An ethics risk exists when expectations of stakeholders may not
be met
  4. A conflict of interest exists when a given decision maker (D)
and another person (P) are in the following situation:
    1. D has to exercise judgement in P’s behalf
    2. P has to exercise judgement in D’s behalf
    3. D has a special interest that interferes with proper judgement
    4. (a) and (b)
    5. (a) and (c)
  5. A potential conflict of interest exists when a given decision
maker (D) and another person (P) are in the following situation:
    1. P has a special interest that interferes with proper judgement
    2. D may have to exercise judgement in P’s behalf
    3. D has a special interest that interferes with proper judgement
    4. (a) and (b)
    5. (b) and (c)
  6. This is the preferred approach to deal with conflicts of
interests
    1. Management
    2. Disclosure
    3. Remediation
    4. Avoidance
    5. Awareness
  7. A fundamental problem examined by agency theory is how it is
possible to align:
    1. Shareholders’ and stakeholders’ goals
    2. Manager’s and stakeholders’ goals
    3. Shareholders’ and managers’ goals
    4. Principal’s and shareholders’ goals
    5. Agent’s and stakeholders’ goals
  8. The 20/60/20 rule states that the total percent of employees who
could commit a fraudulent act is:
    1. 20%
    2. 60%
    3. 80%
    4. 100%
    5. None of the above
  9. Which of the following is not a characteristic identified by
forensic experts in prospective fraud situations?
    1. High intelligence
    2. Greed
    3. Need for whatever is taken
    4. Opportunity to take advantage
    5. Low probability of being caught
  10. The primary focus of a compliance-based ethics program is:
    1. Preventing, detecting and punishing violations of the law
    2. Define organizational values and encourage employee commitment
    3. Improve image and relationship with stakeholders
    4. Protect management from blame
    5. All of the above
  11. The primary focus of an integrity-based ethics program is:
    1. Preventing, detecting and punishing violations of the law
    2. Define organizational values and encourage employee commitment
    3. Improve image and relationship with stakeholders
    4. Protect management from blame
    5. All of the above
  12. The most important factor in encouraging employee observance to
an ethics program is that employees perceive that it is:



































































































































































































































    

  1. Compliance-based
    2. 

  2. Value-based
    3. 

  3. Achievement oriented
    4. 

  4. Stakeholder-based
    5. 

  5. Externally oriented
    6. 













  1. Building trust within an organization can have favourable impact
on employee’s willingness to share information and ideas in a process of:
    1. Ethical awareness
    2. Ethical awakening
    3. Ethical renewal
    4. Ethical wave 
    5. None of the above
  2. A Conference Board survey identified the following rationale for
developing codes of ethics:
    1. Make employees aware that adherence is critical to bottom-line
success
    2. Provide a statement of do’s and don’ts
    3. Discuss what is expected in stakeholder relationships
    4. Establish values and mission
    5. All of the above
  3. This code deals with ethics principles plus additional examples:
    1. Credo
    2. Code of ethics
    3. Code of conduct
    4. Code of practice
    5. All of the above
  4. Which of the following is not a mechanism for monitoring
a code of ethics?
    1. Ethics audit or internal audit procedures
    2. Reviews by legal department
    3. Awards and bonuses
    4. Annual sign-off by employees
    5. Employee surveys
  5. Which of the following is not an example of emerging
public accountability standards or initiatives?
    1. SOX-404
    2. GRI
    3. AA-1000
    4. FTSE4Good
    5. All of the above
  6. SOX imposed the following new penalties for executives:
    1. Fines
    2. Suspension
    3. Criminal prosecution for executives
    4. Return of ill-gotten gains
    5. All of the above













	
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