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1. Enron's executives' creation of partnerships that allowed Enron to keep liabilities off the balance sheet yet generate income that could be recognized in the current period could be described as an example of:

A. Rule utilitarianism.

B .Act utilitarianism.

C. Profit maximization.

D. Kant's categorical imperative

2. Who are the "stakeholders" that a corporate manager should not consider when making a management decision?

A. Owners of shares of stock in the corporation

B. Employees of the corporation

C. The community in which the corporation operates

D. Corporate manager's family

3. I am entitled to a job, a place to live, food, and health care regardless of how hard I work, how motivated I am to work to earn those things." This is:

A. Rights Theory

B. Justice Theory

C. Utilitarianism

D. Profit Maximization

4. Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX) of 2002?

A. The Act calls for increased oversight responsibilities for boards of directors.

B. The Act has resulted in increased penalties for financial fraud by top management.

C. The Act calls for decreased independence of outside auditors reviewing corporate financial statements.

D. The Act is meant to decrease the likelihood of unethical corporate behavior

5. An "argumentum ad populum" used in an argument is:

A. a wrong conclusion that does not follow from the facts or premises set out.

B. a wrong conclusion based on a false analogy.

C. a wrong conclusion that relies on the idea that a popular belief is true.

D. a wrong conclusion based on an attack against the speaker, not his/her reasoning.

6. The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:

A. A CFO must be a CPA or CMA.

B. The audit committee of the board of directors of a company must hire, compensate, and terminate the public accounting firm that audits the company's financial reports.

C. Severe penalties are established for altering or destroying documents that may eventually be used in an official proceeding.

D. Both the CEO and CFO must certify in writing that their company's financial statements and accompanying disclosures fairly represent the results of operations.

7. Which of the following is not the prescribed guideline for ethical decision making?

A.What facts impact my decision?

B.What are the alternatives?

C. What factors appeal to pity?

D.How do the alternatives impact the decision maker

8. Debra is talking to Alex, her stockbroker. Debra asks Alex if she can trust his advice to purchase Acme Co. stock. Alex replies: "Of course you can." Debra asks: "Why can I trust you?" Alex says with a smile, "because I am a trustworthy person." Alex is engaging in:

A. circular reasoning.

B. a bandwagon fallacy.

C. argumentum ad baculum.

D.criminal sanctions to curb irresponsible corporate behavior

9. The Institute of Management Accountants' Statement of Ethical Professional Practice states that when faced with significant ethical issues, management accountants should first:

A. discuss such problems with the immediate superior except when it appears that the superior is involved.

B. clarify relevant concepts by confidential discussion with an objective advisor to obtain an understanding of possible courses of action.

C. follow the established policies of the organization bearing on the resolution of such conflict.

D. submit an informative memorandum describing the ethical issue to an appropriate representative of the organization and resign if no action is taken as a result of the memorandum.

10. Mary Tudor decides to use insider information to sell stock. She justifies this decision by saying that if she did not do this, she will lose money and have to cut down on her staff which will hurt her employees. This defense best illustrates

A. profit maximization

B. rights theory

C .Kant's categorical imperative.

D. Stakeholder theory

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