Ethics Midterm

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Class 2
The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as: Expectations gap
Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts? Corporate social responsibility report
According to the authors, ethical corporate behavior is expected to lead to: Higher profitability in the long-term
The following would be a key control function of the Board of Directors: All of the above
Professional Accountants, in their fiduciary role, owe their primary loyalty to: The general public
The following is the most important factor in having an effective ethical corporate culture: Tone at the top
Workplace ethics
A value that is almost universally respected by stakeholder groups is: Hypernorm (including honesty, compassion, predictability, fairness, integrity, and responsibility) (values that are respected by most groups or cultures around the world) Historically, most large corporations did not consider these risks in a broad and comprehensive way: Ethics risks

3. What could professional accountants have done to prevent the development of the credibility gap and the expectation gap? Expectations gap is used to describe the difference between what the public thinks it is getting in audited financial statements and what it is actually getting. On a broader basis, continuing financial malfeasance has led to a crisis of confidence over corporate reporting and governance. This lack of credibility has spread from the financial stewardship to encompass other spheres of corporate activity and has become known as the credibility gap. Engaged more in the due diligence process and ensure independence. NEED TO ADD MORE

4. Why might ethical corporate behavior lead to higher profitability Because attention to ethical concerns can keep corporations out of costly problems such as clean-up of pollution problems, fines, low morale, and loss of reputation and stakeholder support; and it can open up profitable opportunities such as developing green product lines; brand& reputation

6. How can corporations ensure that their employees behave ethically? By developing ethical corporate cultures based codes of conduct in place to provide guidance, training to provide awareness, understanding, monitoring to assure compliance, and rewards or sanctions to reinforce the desired behavior. Also, the top executives should set the best example possible (tone at the top is important).

7. Should executives and Directors be sent to jail for the acts of their corporation's employees? Yes, if they act negligently or without engaging in due diligence procedures which are designed to ensure that reasonable and proper actions are taken.

11. Why are philosophical approaches to ethical decision making relevant to modern corporations and professional accountants? The philosophical approaches to ethical decision making include utilitarianism, deontology, and virtue ethics. They are relevant because of the greater and growing ethical awareness, sensitivity and power of stakeholders that can make a difference to the reputations and fortunes of both companies and professional accountants. Laws and codes often silent. Make a well-rounded well decided decision.

13. Is a professional accountant a business person pursuing a profit or a fiduciary that is to act in the public interest?

Both, but when there is a conflict between these roles, the professional accountant must place fiduciary duty above personal profit. Otherwise the public interest will not be protected. Class 3
According to our authors, the first resource for guidance when a businessperson or a professional accountant faces an ethical problem should be: Corporate and professional codes of conduct
(why: may apply specifically to the problem at hand/ if not, typically provide principles, approaches and frameworks to make ethical...
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