ch 5

Question 1

Insider trading can be defined as which of the following?
a. The practice of offering something (often money) in order to gain an illicit advantage from someone in
authority
b. The collection and analysis of information on markets, technologies, customers, and competitors, as well as on
socioeconomic and external political trend
c. The process of dishonestly creating, distributing, promoting, and pricing products
d. Exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely
e. The buying or selling of stocks by insiders who possess information that is not yet public

Answer 1

e. The buying or selling of stocks by insiders who possess information that is not yet public

Question 1

An ethical issue is defined as a problem, situation, or opportunity that _______.
a. has no correct answer
b. harms the environment
c. requires society as a whole to choose among several actions that must be evaluated as right or wrong
d. requires an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical
e. is a trade-off between equity and efficiency

Answer 1

d. requires an individual, group, or organization to choose among several actions that must be evaluated as right
or wrong, ethical or unethical

Question 2

is an important element of virtue and is defined as being whole, sound, and in an unimpaired
condition?

Answer 2

Integrity

Question 3

A secret agreement between two or more parties for a fraudulent, illegal, or deceitful purpose is known as

Answer 3

collusion

Question 4

When an employee sorts through a competing business’s trash to see if there are any documents that could reveal secret
information, this is an example of a misuse

Answer 4

Corporate intelligence

Question 5

Issues related to fairness and honesty may arise because business is often regarded as which of the following?
a. A legal case where everything must be done to the letter of the law
b. A contest with the most ethical firm “winning”
c. A guerilla war where businesses seek to destroy each other
d. A game governed by its own rules rather than those of society
e. A game governed by social values

Answer 5

d. A game governed by its own rules rather than those of society

Question 6

War metaphors are common in business. Why can this kind of mindset be dangerous for business leaders?

Answer 6

Because it may foster the idea that anything is acceptable in business

Question 7

Conflicts of interest arise when an individual must choose between which of the following?
a. To advance their own personal interests, those of the organization, or those of some other group
b. To advance the interests of the organization or those of society
c. To communicate in ways that deceive, manipulate, or conceal facts in order to harm others or to be honest
d. To carry out an assignment they perceive to be unethical or to act ethically
e. To report an unethical coworker to internal leadership or outside authorities

Answer 7

a. To advance their own personal interests, those of the organization, or those of some other group

Question 8

The offering of something of value in order to gain an illicit advantage is known as

Answer 8

bribery

Question 9

respond to potential damage is known as

Answer 9

Crisis management

Question 10

Any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression is known as

Answer 10

Fraud

Question 11

If a message has a tendency to mislead, confuse, or deceive the public, it is considered

Answer 11

an implied falsity

Question 12

When a restaurant claims that it sells the world’s best cup of coffee, it could be accused of

Answer 12

Puffery

Question 13

Optimization is defined as which of the following?
a. The quality of being just, equitable, and impartial
b. A trade-off between equity and efficiency
c. An interchange of giving and receiving in social relationships
d. How wealth or income is distributed between employees within a company
e. A lack of integrity, incomplete disclosure, and an unwillingness to tell the truth

Answer 13

b. A trade-off between equity and efficiency

Question 14

types of misconduct is personal in nature but is generally committed in the belief that the
action is furthering organization goals

Answer 14

Lying to employees

Question 15

An activity is probably ethical if which of the following is true?
a. It is approved of by most members of an organization and is customary in the industry.
b. It is approved of by no one in the organization, but has been carried out in the industry before.
c. It is customary in the industry.
d. It does not violate any laws.
e. It does not make consumers feel cheated, deceived, or manipulated.

Answer 15

a. It is approved of by most members of an organization and is customary in the industry.

Question 16

What is the first step toward understanding business ethics?

Answer 16

Develop ethical issue awareness.

Question 17

is associated with a person who understands right/wrong behavior but uses tricks to obtain an
unfair advantage?

Answer 17

Guile

Question 18

When does the ethical decision-making process begin?
a. With a conflict of interest
b. When an individual experiences a conflict between his or her values and those of his or her firm
c. When stakeholders trigger ethical issue awareness and individuals openly discuss it with others
d. With a conflict in values
e. When an individual experiences a conflict between his or her values and those of society

Answer 18

c. When stakeholders trigger ethical issue awareness and individuals openly discuss it with others

Question 19

Twenty-seven states have introduced the Healthy Workplace Bill to consider ways to combat

Answer 19

Bullying

Question 20

Accountants must abide by a strict code of ethics that defines their responsibilities to

Answer 20

Both their clients and the public interest

Question 21

Which of the following statements best describes affirmative action programs?
a. Affirmative action programs require quotas to govern employment decisions.
b. Affirmative action programs have eliminated discrimination in employment.
c. Affirmative action programs are required in all organizations by law.
d. Affirmative action programs involve efforts to recruit, hire, train, and promote qualified individuals from
groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics.
e. Affirmative action programs have fallen out of favor because they have been proven to result in reverse
discrimination against nonminorities who are the most qualified for the position.

Answer 21

d. Affirmative action programs involve efforts to recruit, hire, train, and promote qualified individuals from
groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics.

Question 22

Which of the following is a question you need to ask when you suspect that workplace bullying has occurred?
a. Has your boss given you a raise within the last year?
b. Is your supervisor requiring impossible things from you without training?
c. Are you attending all meetings called by your supervisor?
d. Have you refused to work, talk, or socialize with others?
e. Do you interfere with other employees’ work?

Answer 22

b. Is your supervisor requiring impossible things from you without training?

Question 23

is associated with a hostile workplace where someone considered a target is threatened,
harassed, belittled, or verbally abused?

Answer 23

Bullying

Question 24

Which of the following statements regarding abusive and intimidating behavior is true? a. Enduring abusive behavior is necessary to get ahead. b. Most abusive or intimidating behavior constitutes sexual harassment. c. An organization cannot grow if the manager is intimidating. d. Not everyone agrees on what constitutes abusive behavior. e. Abusive behavior like bullying is illegal in the workplace.

Answer 24

d. Not everyone agrees on what constitutes abusive behavior.

Question 25

The Age Discrimination in Employment Act specifically outlaws hiring practices that discriminate against people who are _______. a. under the age of 18 b. between the ages of 16 and 20 c. aged 40 and older d. between the ages of 39 and 69 e. younger than 18 and older than 39

Answer 25

c. aged 40 and older

Question 26

the most common ethical problem for employees?

Answer 26

Abusive or intimidating behavior

Question 27

makes it illegal for individuals, firms, or third parties doing business in American markets to “make payments to foreign government officials to assist in obtaining or retaining business”? Title VII of the Civil Rights Act

Answer 27

U.S. Foreign Corrupt Practices Act (FCPA)

Question 28

A salesperson told a client who was not an IT expert that the new software systems were much better than the client’s existing ones. To be convincing, the salesperson used a great deal of technical jargon that the client did not really understand. The salesperson did this intentionally to confuse the client. This example illustrates

Answer 28

Noise

Question 29

one of the three criteria that must be met to constitute a hostile work environment?

Answer 29

The conduct was unwelcome

Question 30

An interchange of giving and receiving in social relationships is known as

Answer 30

reciprocity

Question 31

A company can be sued for discrimination if it does which of the following? a. Unilaterally abuses or intimidates its employees b. Creates an anticompetitive corporate culture c. Discharges a minority individual, but has a just cause for doing so d. Uses age as a hiring or firing criterion e. Has more men than women on staff

Answer 31

d. Uses age as a hiring or firing criterion

Question 32

Which of the following is true of affirmative action programs? a. They involve the promotion of unqualified employees. b. They are not imposed by federal law on employers. c. They are not very commonly used anymore because of reverse discrimination concerns. d. They only involve the training of individuals. e. They involve the recruitment, hiring, promotion, and training of qualified individuals.

Answer 32

e. They involve the recruitment, hiring, promotion, and training of qualified individuals.

Question 33

Which type of fraud involves intentional deception on the part of an individual or group in order to derive an unfair economic advantage over an organization?

Answer 33

Consumer

Question 34

Which type of fraudulent activity could involve a consumer staging an accident in order to seek damages?

Answer 34

Duplicity

Question 35

Which type of fraudulent activity involves an employee who assists a consumer in committing the fraud?

Answer 35

Collusion

Question 36

In the past, bond ratings agencies were paid by the organizations that they rated, so organizations would shop around for the agency that gave them the best rating. This led to the agencies being accused of having which of the following?

Answer 36

Conflicts of interest

Question 37

are used to obtain or retain business and are not generally considered illegal in the United States?

Answer 37

Facilitation payments

Question 38

requires an individual to choose among several actions that have negative outcomes?

Answer 38

An ethical dilemma

Question 39

Which of the following best describes a dual relationship? a. Any repeated, unwanted behavior of a sexual nature perpetrated upon one individual by another b. A sexual relationship between an employee and his or her immediate superior c. A relationship in which both parties consented but then one party later claims sexual harassment d. A situation in which a manager convinces his or her employee to engage in a sexual relationship in exchange for incentives e. A personal, loving, and/or sexual relationship with someone with whom you share professional responsibilities

Answer 39

e. A personal, loving, and/or sexual relationship with someone with whom you share professional responsibilities

Question 40

An employee can only successfully accuse a co-worker of sexual harassment if it seriously affected their psychological well-being or caused physical injury. a. True b. False

Answer 40

False

Question 41

The three fundamental elements of honesty, integrity, and equality are ones that motivate people to be fair. a. True b. False

Answer 41

False

Question 42

Omission lying is intentionally not informing others of any differences, problems, safety warnings, or negative issues relating to a product or company that significantly affect awareness, intention, or behavior. a. True b. False

Answer 42

True

Question 43

Examples of consumer fraud include shoplifting, collusion, guile, and duplicity. a. True b. False

Answer 43

True

Question 44

Creating a perception or belief by words that intentionally deceives someone is related to

Answer 44

Lying by commission

Question 45

Which of the following types of misconduct involves a corporation’s financial reports, in which companies provide important information on which investors and others base decisions involving millions of dollars?

Answer 45

Accounting fraud

Question 46

When someone looks over an employee’s shoulder while the employee types a password, they are engaging in a behavior known as

Answer 46

shoulder surfing

Question 47

refers to the process of dishonestly creating, distributing, promoting, and pricing products?

Answer 47

Marketing fraud

Question 48

Which of the following methods of corporate espionage involves tricking individuals into revealing their passwords or other valuable corporate information?

Answer 48

Social engineering