Accounting Ethics
Textbook Exam Questions
Course Introduction
Accounting Ethics explores the fundamental principles and ethical standards that guide the accounting profession. The course examines the role of ethics in professional judgment and decision-making, emphasizing issues such as integrity, objectivity, confidentiality, and professional conduct. Students analyze real-world cases involving ethical dilemmas, fraud, and corporate governance, gaining insight into regulatory frameworks and the responsibilities of accountants to stakeholders and society. By the end of the course, students will be equipped to recognize ethical challenges in accounting practices and apply ethical reasoning to resolve complex issues in their professional careers.
Recommended Textbook
Business and Professional Ethics for Directors Executives and Accountants 8th Edition by Leonard Available Study Resources on Quizplus
8 Chapters
160 Verified Questions
160 Flashcards
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Chapter 1: Ethics Expectations
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Sample Questions
Q1) Not reporting environmental issues is an example of A) lack of transparency.
B) lack of integrity.
C) lack of accuracy.
D) All of these are correct.
E) None of these are correct.
Answer: B
Q2) A value that is almost universally respected by stakeholder groups is a
A) super norm.
B) alfa norm.
C) value norm.
D) hypernorm.
E) general norm.
Answer: D
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Chapter 2: Ethics & Governance Scandals
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Sample Questions
Q1) Which of the following financial crises or fiascos were NOT related to the Subprime Lending Crisis?
A) Bear Stearns
B) Lehman Brothers
C) Bernie Madoff
D) Galleon Group
E) Bernie Madoff and Galleon Group
Answer: E
Q2) As a result of the spectacular stock market crash in 1929, the government enacted the Securities Act of 1933, the Securities Act of 1934, as well as which of the following acts?
A) Glass-Steagall Act
B) Investment Advisers Act
C) Gramm-Leach-Bliley Act
D) Davis-Bacon Act
E) Both the Glass-Steagall Act and the Investment Advisers Act
Answer: E
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Chapter 3: Philosophers Contributions
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Sample Questions
Q1) Which theory is concerned with the motivation of the decision maker rather than the consequences of the decision?
A) deontology
B) distributive justice
C) utilitarianism
D) moral imagination
E) virtue ethics
Answer: A
Q2) Which philosopher argued that self-interest leads to economic cooperation?
A) Adam Smith
B) John Locke
C) Thomas Hobbes
D) Jeremy Bentham
E) John Rawls
Answer: A
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Chapter 4: Practical Ethical Decision Making
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Sample Questions
Q1) Failure to identify all relevant stakeholder groups for a proper stakeholder impact analysis may be the result of
A) bias.
B) conforming to an unethical corporate culture.
C) conflicts of interests.
D) failure to consider the motivation for the decision.
E) All of these are correct.
Q2) Which of these values are the combinations of a value and the probability of its occurrence?
A) probable values
B) common values
C) present values
D) expected values
E) risk-adjusted values
Q3) What is the most common measure of shareholder well-being?
A) profit or loss
B) profit or loss plus externalities
C) profit or loss plus cost-benefit analysis
D) profit or loss plus risk-benefit analysis
E) All of these are correct.
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Chapter 5: Corporate Ethical Governance & Accountability
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Sample Questions
Q1) The most important factor in encouraging employee observance to an ethics program is that employees perceive that it is
A) compliance-based.
B) values-based.
C) achievement-oriented.
D) stakeholder-based.
E) externally oriented.
Q2) Which of the following is NOT a mechanism for monitoring a code of ethics?
A) ethics audit or internal audit procedures
B) reviews by legal department
C) awards and bonuses
D) annual sign-off by employees
E) employee surveys
Q3) Which code deals with ethics principles plus additional examples?
A) credo
B) code of ethics
C) code of conduct
D) code of practice
E) All of these are correct.
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Page 7
Chapter 6: Professional Accounting in the Public Interest
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Sample Questions
Q1) Using partners who do not report to audit partners for the provision of non-assurance services to an assurance client would be an example of
A) safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation.
B) safeguards reducing the risk of conflict of interest within a client.
C) safeguards reducing the risk of conflict of interest within a professional accounting firm.
D) safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation, and safeguards reducing the risk of conflict of interest within a professional accounting firm.
E) All of these are correct.
Q2) Professional accountants, in their fiduciary role, owe primary loyalty to A) the accounting profession.
B) the client.
C) the public interest.
D) government regulations.
E) All of these are correct.
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Chapter 7: Managing Ethics Risks & Opportunities
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Sample Questions
Q1) 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 day's bills. He thinks it is fine to do so because every day there are two or three customers that pay more than they should. This type of rationalization is based on
A) everyone else is doing it.
B) denial of the victim.
C) condemnation of the condemners.
D) appeal to higher loyalties.
E) entitlement.
Q2) Most damage is usually done during which phase of a crisis?
A) pre-crisis
B) reputation restoration
C) controlled
D) uncontrolled
E) post-crisis
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Chapter 8: Subprime Lending Fiasco Ethics Issues
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Sample Questions
Q1) A fundamental problem with Goldman Sachs' GSAMP Trust was that A) loans were given to people with poor credit histories.
B) homeowners' equity in the securitized mortgages was less than 1 percent on average.
C) loans were given to people with no income.
D) a sizeable portion of the securitized loans had little or no documentation.
E) All of these are correct.
Q2) The 1999 Gramm-Leach-Bliley Act allowed banks to
A) engage in subprime lending.
B) sell insurance.
C) become more involved in investment bank activities.
D) underwrite government bonds.
E) choose between commercial and investment bank activities.
Q3) Which of these regulators were aware of the problem and tried to blow the whistle in 2003?
A) Security and Exchange Commission and Federal Reserve Board
B) Iowa and North Carolina State Attorneys
C) Office of the Comptroller of the Currency and Office of Thrift Supervision
D) federal banking regulators
E) None of these are correct.
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Page 10