Ethics and Professionalism in Accounting

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AC 216 – Ethics and Professionalism in Accounting
Exam #1

Name SOLUTIONS

Part I. Multiple Choice (2 pts each, 40 pts total)

Instructions: Select the one best answer to each question.

1. The insufficient anchor adjustment cognitive bias refers to: a. placing too much significance on the average value. b. placing significance on an erroneous prior value.
c. overconfidence in one’s decision based on insufficient information. d. placing too much significance on a value which is the hardest to recall.

2. Which of the following characteristics typifies a complicated environment? a. good practice.
b. process reengineering.
c. exclusive use of experts.
d. best practice.

“c” arguably makes sense but the word “exclusive” makes it less than the best answer.

3.Which of the following statements is correct:
a. Problems can be universally agreed upon, while issues are subject to greater depth of debate. b. Problems and issues are both always universally agreed upon. c. Issues can be universally agreed upon, while problems are subject to greater depth of debate.

d. Problems are exactly the same as issues.

4. Deciding whether to use strawberry or grape jam on one’s sandwich is: a. not a moral issue because no real decision needs to be made. b. a moral issue because a choice between alternatives is required. c. not a moral issue because no component of harm exists. d. a moral issue because consequences are important.

5. Ksenia believes that success is under her own control. She most likely has a/an: a. high internal locus of control
b. high external locus of control
c. high locus of control
d. a lack of locus of control

6. Kohlberg’s theories on ethical awareness state that:
a. differing levels of ethical awareness exist.
b. locus of control determines one’s level of ethical awareness. c. most individuals reach a “stage 3” level of ethical awareness. d. both A and C are correct.

7. Which of the following statements regarding Trevino’s eight steps to ethical decision making are incorrect? a. The framework starts off with mechanical steps followed by personal ones. b. Identification of stakeholders and weighing alternatives are two separate steps. c. In real life decision making, not all eight steps are always followed. d. The role of intuition is not considered.

8. Which of the following ethical approaches is considered to be a mixed framework?
a. Kant ethics.
b. Sidgwick’s dualism.
c. Love ethic.
d. Existentialism.

9.The Existentialism approach is similar to the egoism approach in what regard? a. Both are teleological approaches.
b. Both are deontological approaches.
c. Both have a narrow individual focus.
d. Both balance individual and group considerations.

10.Which of the following statements is correct?
a. Business ethics deals exclusively with the theory behind right and wrong. b. Business ethics deals with the application of standards of right and wrong. c. Ethics and law are synonymous.

d. Ethics and morality are exactly the same since both deal with application of right and wrong.

11.Which of the following describes law and ethics.
a. They are exactly the same.
b. Some legal actions may not be ethical.
c. All ethical actions are also legal.
d. All legal actions are also ethical.

12.According to the textbook and class discussion, U.S. Federal Sentencing Guidelines: a. Treat all firms equally despite their attempts to act ethically. b. Increase the severity of penalties for firms that tried to act ethically but failed to do so. c. Attempt to reduce the severity of penalties when a firm has tried to act ethically. d. Treat misconduct as a clear cut...
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