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Exam 2: Business Ethics

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Question 51

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Which of the following is true regarding activities of the Public Company Accounting Oversight Board?

A) The Board ensures that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit, but it has no responsibility in regard to whistle-blowing protection.
B) The Board requires that companies devise a system that allows employees to report suspicions of unethical behavior, but it does not address financial reports prepared by auditors and public accounting firms.
C) The Board requires that the universalization test be used as the primary ethical guideline and also mandates protection for whistle-blowers who report suspicious activity involving financial reports.
D) The Board ensures that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit and also requires that companies devise a system that allows employees to report suspicions of unethical behavior.
E) The Public Company Accounting Oversight Board was abolished during the Obama administration and no longer exists.

F) B) and D)
G) C) and E)

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Question 52

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Which of the following is asserted by the principle of rights?

A) That whether a business decision is ethical depends on how the decision affects the rights of all involved.
B) That whether a business decision is ethical depends on how the decision affects the rights of stockholders without consideration of other stakeholders.
C) That whether a business decision is ethical depends on how the decision affects the rights of employees without consideration of other stakeholders.
D) That whether a business decision is ethical depends on how the decision affects the overall economy.
E) That whether a business decision is ethical depends on how the decision affects the rights of organized labor without consideration of other stakeholders.

F) B) and D)
G) C) and D)

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Question 53

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An ethical theory that urges managers to take those actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question is called ________.

How do law and business ethics relate to each other?

Which of the following is not a theory of business ethics.

[Environmental Concerns] Sana, the president of a company that makes paper, has an interest in the environment. She recently went to a seminar on environmental dangers and has decided to take steps to clean things up. She started at home and has now felt compelled to change things at work. Sana had to face the fact that her company has been cheating and is not in compliance with applicable environmental regulations due to dumping in a nearby river. Her company has never been cited because it employs a very large number of people in the community, including the mayor's husband and the chief-of-police's brother. On her mission to clean things up, Sana has decided to go even further than the law requires and implement the very latest environmental protections. When she announced her plan, the chair of the company's board of directors, Jessica, had a meeting with Sana. Jessica told Sana to analyze the situation carefully because the cost of the additional equipment would mean no dividend to shareholders and no raise for employees. Furthermore, Jessica told Sana that installing all the new equipment would result in higher prices for the company's paper product and could bankrupt the company because of foreign competition. Jessica hinted that Sana could be fired if she persisted. Jessica suggested that Sana should just be concerned with a minimal standard of ethics. Sana decides to go forward with her plan to clean things up under the theory that she wants to treat others in the same manner that she wants to be treated. Under Sana's theory, if she did not understand the importance of the environmental improvements, she would want them to be thrust upon her. -Which of these would be a stakeholder in the above company?

The argument that traditional moral hierarchies ignore relationships is a part of which theory of business ethics?

Which of the following is a consideration in meeting the minimal standard for a firm to be considered an ethical business?

[Environmental Concerns] Sana, the president of a company that makes paper, has an interest in the environment. She recently went to a seminar on environmental dangers and has decided to take steps to clean things up. She started at home and has now felt compelled to change things at work. Sana had to face the fact that her company has been cheating and is not in compliance with applicable environmental regulations due to dumping in a nearby river. Her company has never been cited because it employs a very large number of people in the community, including the mayor's husband and the chief-of-police's brother. On her mission to clean things up, Sana has decided to go even further than the law requires and implement the very latest environmental protections. When she announced her plan, the chair of the company's board of directors, Jessica, had a meeting with Sana. Jessica told Sana to analyze the situation carefully because the cost of the additional equipment would mean no dividend to shareholders and no raise for employees. Furthermore, Jessica told Sana that installing all the new equipment would result in higher prices for the company's paper product and could bankrupt the company because of foreign competition. Jessica hinted that Sana could be fired if she persisted. Jessica suggested that Sana should just be concerned with a minimal standard of ethics. Sana decides to go forward with her plan to clean things up under the theory that she wants to treat others in the same manner that she wants to be treated. Under Sana's theory, if she did not understand the importance of the environmental improvements, she would want them to be thrust upon her. -Which statement is true regarding meeting the minimal standard of business ethics suggested by Jessica?

[Fast Food Dilemma] Aiden, who just started at his new job as an assistant manager at a fast-food restaurant, wants to make a good impression. He thinks that things are going well. On only the second day on the job, however, he sees his manager, Debbie, slink out of the restaurant with a big box of hamburgers. She puts them in her car and speeds away. Aiden is fairly certain that Debbie did not pay for the hamburgers. Aiden asks advice of his best friend, Kyle; his girlfriend, Mia; his sister, Katie; and his dad, Joe. Kyle says that there are no real objective standards and that Aiden should just decide to do what is best for himself. Mia says that Aiden should think about the consequences and focus on the greatest benefit to all involved. She believes that it will do no real harm for Aiden to keep his mouth shut because the fast-food restaurant is making plenty of money and probably does not pay Debbie enough anyway. Plus, getting in trouble with Debbie could cause problems at work, and if Aiden loses his job, Aiden and Mia might have to put off their impending marriage. Katie says that on balance, following the rule of producing the greatest good would mean that he should report Debbie to her boss because stealing does not generally produce the greatest satisfaction. Aiden's dad says that as a matter of principle, Aiden should report Debbie to her boss because stealing is simply wrong. -Which theory most accurately fits the advice given by Katie?