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Ethical Obligations and Decision Making in Accounting Steven Mintz 5th Edition- Test Bank
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Chapter 2 Cognitive Processes and Ethical Decision Making in Accounting
1) When Sally is asked why she should share her toys with her sister, she responds by saying “Because my mom says I have to and if I don’t I’ll go to time-out.” In which stage of moral development is Sally?
- A) Conventional Morality
- B) Nonconventional Morality
- C) Postconventional Morality
- D) Preconventional Morality
Answer: D
Difficulty: 1 Easy
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
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2) In reference to Rest’s four-component Model of Morality, which component reflects an individual’s willingness to place ethical values ahead of non-ethical values that relate to self-interest?
- A) Moral Character
- B) Moral Motivation
- C) Moral Sympathy
- D) Moral Judgment
Answer: B
Difficulty: 1 Easy
Topic: Rest’s Four-Component Model of Ethical Decision Making
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
3) The cognitive development approach refers to:
- A) The thought process followed in one’s moral development
- B) The method of moral reasoning used in decision making
- C) The exercise of professional judgment in decision making
- D) The approach to giving voice to one’s values
Answer: A
Difficulty: 2 Medium
Topic: Kohlberg’s Stages of Moral Development
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
4) Kohlberg’s model can best be described as:
- A) The various phases in one’s moral development and related levels of moral reasoning
- B) A model of ethical action that is based on the belief that one will not report incidents of wrongdoing if they believe others will report it
- C) A predictive tool to determine how a person will reason ethically based on one’s views on diversity
- D) A model of age-specific levels of moral reasoning
Answer: A
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
5) In the “Heinz and the Drug” case described in the chapter, if Heinz was reasoning at stage 5 he might decide to steal the drug based on which of the following reasoning?
- A) Heinz should steal the medicine, because he will be much happier if he saves his wife, even if he will have to serve a prison sentence.
- B) Heinz should steal the medicine, because his wife expects it.
- C) Heinz should steal the medicine, because the law prohibits exceptions.
- D) Heinz should steal the medicine, because everyone has a right to live, regardless of the law.
Answer: D
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
6) Which of the following might NOT describe Heinz’s thought process in deciding whether to steal the drug if he were at stage 6?
- A) Heinz should steal the medicine, because everyone has a right to live, regardless of the law.
- B) Heinz should steal the medicine, because saving a human life is a more fundamental value than the property rights of another person.
- C) Heinz should not steal the medicine, because that violates the golden rule of honesty and respect.
- D) Heinz should not steal the medicine, because the scientist has a right to fair compensation.
Answer: D
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
7) In stage 1 of Kohlberg’s model, ethical reasoning is motivated by:
- A) Fear of punishment
- B) Satisfaction of one’s needs
- C) Following the law
- D) Acting based on universal ethical principles
Answer: A
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
8) In stage 3 of Kohlberg’s model, ethical reasoning is motivated by:
- A) Satisfaction of one’s needs
- B) Acting in the best interests of others
- C) Upholding the rights, values, and legal contracts of society
- D) Acting based on universal principles
Answer: B
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
9) In stage 5 of Kohlberg’s model, ethical reasoning is motivated by:
- A) Acting in the best interests of others
- B) Following the law
- C) Upholding the rights, values, and legal contracts of society
- D) Acting based on universal principles
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
10) Individuals who reason at stage 6 incorporate ethical reasoning based on:
- A) The morality of law and duty to the social order
- B) A rational calculation of benefits and harms to society
- C) Universal ethical principles
- D) All of the above
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
11) A client asks his accountant to ignore a mistake which overstated the accounts receivable account. The accountant decides that the accounts receivable account has to be corrected to state the correct amount based on the current accounting rules. Which stage of Kohlberg’ Stages of Moral Development is the accounting reasoning?
- A) Stage 2
- B) Stage 3
- C) Stage 4
- D) Stage 5
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
12) The ethical domain in accounting and auditing refers to:
- A) The important constituent groups affected by accounting and auditing work
- B) The stages of the moral development of accountants and auditors
- C) The decision making process followed by accountants and auditors
- D) The rules of conduct in the AICPA Code of Professional Conduct
Answer: A
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
13) The results of studies indicate that CPAs reason primarily at:
- A) Stages 1 and 2
- B) Stages 2 and 3
- C) Stages 3 and 4
- D) Stages 4 and 5
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-01 Analyze the thought process involved in making decisions and taking ethical action.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
14) Rest’s “Four Component Model of Morality” can best be described as:
- A) A model of moral development based on one’s diversity perspective
- B) A model of the relationship between ethical action and one’s level of moral development
- C) A model of moral judgment based on one’s possession of certain virtues of behavior
- D) An approach to ethical decision making based on prescribed steps in making ethical decisions
Answer: B
Difficulty: 2 Medium
Topic: Rest’s Four-Component Model of Ethical Decision Making
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
15) Assume you were assigned a term paper and decided to surf the web to identify a provider of papers for a fee. You chose what you thought was the best paper available. With respect to Rest’s model of morality it can be said that:
- A) Your actions lack moral sensitivity
- B) Your actions are based on moral judgments
- C) You are making judgments based on expectations of your peer group
- D) You have made a decision based on the common good
Answer: A
Difficulty: 2 Medium
Topic: Rest’s Four-Component Model of Ethical Decision Making
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
16) Yvonne is preparing a tax return for Jack. Jack wants to claim his nephew as a dependent even though he does not meet the criteria. Jack says if Yvonne does not list his nephew as a dependent, he will fire her and find a new tax accountant. Yvonne refuses because it is illegal to claim a dependent that does not meet the qualifications. Based on Yvonne’s decision, she is likely reasoning at which stage of Kohlberg’s moral development model?
- A) Stage 2
- B) Stage 3
- C) Stage 4
- D) Stage 5
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
17) James Rest’s model of ethical action involves four components inherent to the ethical decision-making process. Which of the following relates to a person’s moral judgment of what ought to be done?
- A) Interpreting a situation as a moral dilemma
- B) Willingness to place ethical values ahead of non-ethical values
- C) Intention to act ethically aligning to his values
- D) Outcome of one’s prescriptive reasoning
Answer: D
Difficulty: 2 Medium
Topic: Rest’s Four-Component Model of Ethical Decision Making
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
18) Thorne’s “Integrated Model of Ethical Decision Making” can best be described as:
- A) A depiction of a model of moral development
- B) A depiction of how the Principles in the AICPA Code of Professional Conduct influences decision making
- C) A model of the role of virtue in decision making
- D) A model of the role of moral development and virtue in decision making
Answer: D
Difficulty: 2 Medium
Topic: Aligning Ethical Behavior and Ethical Intent: Virtue-Based Decision Making
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
19) In Thorne’s model of ethical decision making, the instrumental virtues relate to:
- A) Moral sensitivity
- B) Ethical reasoning
- C) Ethical motivation
- D) Ethical character
Answer: D
Difficulty: 2 Medium
Topic: Aligning Ethical Behavior and Ethical Intent: Virtue-Based Decision Making
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
20) A criticism of the Kohlberg model is that it:
- A) Suggests that people continue to change their decision priorities over time.
- B) Considers development of moral reasoning necessary to be a moral person.
- C) Makes deontological ethics superior to other ethical perspectives.
- D) Considers all complexities of decision-making and behavior.
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg’s Stages of Moral Development
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
21) Using the conventional level of moral reasoning which is most likely the rationalization to Heinz’s dilemma?
- A) Saving a life is more important than keeping the law.
- B) The needs of society are considered most.
- C) The needs of the wife needing the drug is considered most.
- D) The needs of the husband making the decision is considered most.
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
22) Thomas Jones’s research looked at the characteristics of a moral issue to develop the moral intensity model. The model includes six dimensions. Which of the following are NOT included in those dimensions?
- A) Concentration and probability of effect
- B) Social Consensus
- C) Proximity and magnitude of consequences
- D) Reasoning and values-based decision-making
Answer: D
Difficulty: 2 Medium
Topic: Moral Intensity
Learning Objective: 02-03 Distinguish between equity, diversity, and inclusion.
Bloom’s: Apply
AACSB: Ethics
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23) In Thomas Jones’ model of moral intensity it can be said about accounting that:
- A) There is a link between the stage of moral development and ethical reasoning
- B) The link between social consensus and ethical decision making exists because accounting is a community with shared values and beliefs
- C) The link between probability of effect and ethical decision making exists because in accounting the amount of time to the consequences of the actions are considered
- D) There is a link between moral judgment and moral action
Answer: B
Difficulty: 2 Medium
Topic: Moral Intensity
Learning Objective: 02-03 Distinguish between equity, diversity, and inclusion.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
24) The philosophical methods of moral reasoning suggest that once we have ascertained the facts, we should ask ourselves certain questions when trying to resolve a moral issue. Which of the following is NOT one of those questions?
- A) Which course of action maximizes my net benefits?
- B) Which course of action develops moral virtues?
- C) Which course of action advances the common good?
- D) What benefits and what harms will each course of action produce and which alternative will lead to the best overall consequences?
Answer: A
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
25) According to Kidder, which of the following is least likely to be a step or checkpoint in ethical decision-making guidelines?
- A) Recognize there is an ethical issue
- B) Determine the actor
- C) Test for wrong issues
- D) Look for a third way
Answer: C
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
26) What is an important part in making an ethical choice, according to Kidder?
- A) Knowledge
- B) Loyalty
- C) Courage
- D) Trustworthiness
Answer: C
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
27) In his evaluation of Kidder’s model, Johnson points out that:
- A) It is not easy to determine who has responsibility for solving a problem
- B) A time constraint prevents making timely decisions
- C) Decisions lead to action
- D) We cannot apply lessons learned in one dilemma to future problems
Answer: A
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
28) Which of the following connect the integrated ethical decision-making process with Rest’s framework?
- A) Identify the ethical and professional issues and ethical behavior
- B) Identify and evaluate alternate courses of actions and ethical sensitivity
- C) Reflect on the moral intensity and virtues that enable action and ethical intent
- D) Take action and ethical judgment
Answer: C
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
29) Wanda is faced with an ethical dilemma. She knows her supervisor, the CFO, wants to accelerate the recoding of revenue to an earlier period to “make the numbers,” but Wanda is convinced this would violate GAAP. If Wanda reasons at stage 4 of Kohlberg’s model she is most likely to:
- A) Make a decision based on what is in her own best interests
- B) Consider the interests of the stakeholders but decide based on what is in her best interests
- C) Refuse to record the transaction as desired by the CFO
- D) Inform the board of directors of the difference of opinion with the CFO
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
30) Keesha is the CEO of a publicly-owned company. She was informed by the CFO that the company’s earnings were down 30 percent from the prior year due to the recession. The company’s stock price has declined by 20 percent. The CFO comes up with a scheme to hide debt and inflate revenues by selling underperforming assets to a special purpose entity affiliated with the company. Keesha is concerned about possible effects on the creditors but ultimately she agrees to the accounting. Keesha is reasoning at:
- A) Stage 1
- B) Stage 2
- C) Stage 3
- D) Stage 4
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
31) Rosie is the external auditor of Texas Two Steps, a privately-owned dance company in Texas. Rosie believes the owner of the company is skimming cash off the top. She approaches the owner who explains that the money will be replaced in the following month after he refinances his house. Rosie accepts the owner’s explanation but reclassifies the expenditure as a receivable of the company from the owner. Rosie’s reasoning best reflects:
- A) Stage 1
- B) Stage 2
- C) Stage 3
- D) Stage 4
Answer: D
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-04 Describe Kohlbergs stages of moral development.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
32) Steve is in charge of accounting for the purchase of equipment at Cal Works, Inc. The company has a policy that all expenditures greater than $1,000 (1% of total expenditures) have to be capitalized; less than $1,000 expensed. Steve is under pressure to report high earnings. He takes one $600 and $900 expenditure, adds them together, and records a capital expenditure for $1,500. Which of the following reasons and rationalizations might Steve use for his action:
- A) One-time request
- B) Standard Practice
- C) Representational faithfulness
- D) Materiality
Answer: D
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-10 Describe the Giving Voice to Values technique and apply it to a case study.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
33) Role expectation or approval from others is a motive for doing right in which stage of Kohlberg’s moral reasoning?
- A) Fairness to others
- B) Obedience
- C) Social contract
- D) Law and order
Answer: A
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-01 Analyze the thought process involved in making decisions and taking ethical action.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
34) Carpendale suggests that moral reasoning is viewed as a process of coordinating all perspectives involved in a moral dilemma. Moral reasoning takes place in which of the following steps in Rest’s Model?
- A) Moral sensitivity
- B) Moral development
- C) Moral judgment
- D) Moral character
Answer: C
Difficulty: 1 Easy
Topic: Rest’s Four-Component Model of Ethical Decision Making
Learning Objective: 02-02 Explain how our thoughts might bias our decision-making process.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
35) What should be the first step in decision making when faced with an ethical dilemma?
- A) Choose an ethical theory to follow
- B) Discuss with others your options
- C) Get the facts surrounding the problem
- D) Determine consequences
Answer: C
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
36) Daniel Kahneman’s System 1 thinking is described by all of the following except for:
- A) Automatic
- B) Emotional
- C) Intuitive
- D) Reflective
Answer: D
Difficulty: 2 Medium
Topic: Behavioral Ethics
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
37) Which of the following statements best describes System 2 thinking?
- A) System 2 operates automatically and quickly, with little or no effort and no sense of voluntary control
- B) System 2 allocates attention to the effortful mental activities that demand it, including complex computations
- C) An example System 2 thinking is detecting that one object is more distant than another
- D) An example of System 2 thinking is effortlessly originating impressions and feelings about an event
Answer: B
Difficulty: 2 Medium
Topic: Behavioral Ethics
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
38) Cognitive dissonance creates a problem that can be described as:
- A) Inconsistency between thoughts and beliefs and our intended actions
- B) Consistency between thoughts and beliefs and our intended actions
- C) Reducing the importance of the beliefs and attitudes on our actions
- D) Acquiring new information that outweighs the dissonant beliefs
Answer: A
Difficulty: 2 Medium
Topic: Behavioral Ethics
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
39) An example from the book of someone who may have experienced cognitive dissonance is:
- A) Joe Paterno
- B) Cynthia Cooper
- C) Betty Vinson
- D) Richard Scrushy
Answer: C
Difficulty: 2 Medium
Topic: Behavioral Ethics
Learning Objective: 02-06 Explain Rests model and how its components influence ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
40) Which of the following characteristics is NOT part of the behavioral approach, Giving Voice to Values?
- A) Used post-decision-making
- B) Capacity to express one’s values
- C) Employs traditional philosophical reasoning
- D) Counteracts reasons and rationalizations
Answer: C
Difficulty: 2 Medium
Topic: Giving Voice to Values
Learning Objective: 02-07 Describe the link between moral intensity and ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
41) In using the GVV framework, questions to pose for dealing with the opposing points of view include all of the following except:
- A) What is the way to appeal all parties?
- B) What is at stake for the key parties?
- C) What is your most powerful and persuasive response you need to address?
- D) What levers can you to influence others?
Answer: A
Difficulty: 2 Medium
Topic: Giving Voice to Values
Learning Objective: 02-07 Describe the link between moral intensity and ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
42) In the A Team Player case discussed in the chapter, which is the primary reason and rationalization that Barbara may need to counter for not informing Jessica of the inventory deficiency?
- A) The inventory deficiency is immaterial.
- B) Not accounting for the inventory deficiency is standard practice.
- C) The inventory deficiency is not the team’s responsibility.
- D) The inventory deficiency is a one-time occurrence and will not happen again.
Answer: A
Difficulty: 2 Medium
Topic: Giving Voice to Values
Learning Objective: 02-07 Describe the link between moral intensity and ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
43) Which of the following is NOT one of the levers Larry Davis might use to convince Paul Jones about the rightness of his point of view in the Ace Manufacturing case discussed in the chapter?
- A) Davis can ask Paul Jones for supporting documentation to back up the coding of expenses to different accounts
- B) Davis can try to convince Paul that his actions are harmful to the company and potentially very embarrassing for his dad
- C) Davis can threaten to go to all the owners if Paul doesn’t admit the mistake and take corrective action
- D) Davis can threaten to go to the SEC to protect shareholder interests if Paul agrees to pay back the amounts taken out of the company and correct the accounting
Answer: D
Difficulty: 2 Medium
Topic: Ethical Decision-Making Models
Learning Objective: 02-05 Explain how cognitive processes influence ethical decision making in accounting.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
44) Assume your values conflict with what you are being asked to do. Under the Giving Voice to Values methodology which of the following statements reflects the thought process you might have in developing a game plan to voice your values?
- A) Use philosophical ethical theories to reason through alternative courses of action
- B) Use the ethical decision making model to evaluate the ethics of the situation
- C) Reflect on the objections that might be raised to your intended expressed views
- D) Use Systems 2 thinking to decide on a course of action
Answer: C
Difficulty: 2 Medium
Topic: Giving Voice to Values
Learning Objective: 02-07 Describe the link between moral intensity and ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
45) Gabby has just left a meeting with the partner in charge of an audit engagement and was told to ignore the typical year-end accrual entries because earnings are below financial analysts’ earnings expectations. Gabby knows this is wrong and wants to act on her values but she does not want to lose her job. What is the best thing for Gabby to do in this situation if she chooses to voice her values?
- A) Quit the firm
- B) Speak with the managing partner of the firm
- C) Inform the SEC of the difference
- D) All of the above
Answer: B
Difficulty: 2 Medium
Topic: Giving Voice to Values
Learning Objective: 02-07 Describe the link between moral intensity and ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
46) The ethical conflict in A Team Player can be described as:
- A) There is no conflict; Barbara and Diane both identify the deficiency.
- B) The conflict is between Diane and the rest of the audit team on whether there is a deficiency.
- C) The conflict is between Barbara and Haley, and the rest of the team as to whether or not to take the deficiency to Jessica, the audit senior.
- D) The conflict is between Barbara and the rest of the team as to whether or not to take the deficiency to Jessica, the audit senior.
Answer: C
Difficulty: 2 Medium
Topic: Kohlberg and the Cognitive Development Approach
Learning Objective: 02-01 Analyze the thought process involved in making decisions and taking ethical action.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
47) The ethical conflict Alex is facing in the FDA Liability Concerns can be best characterized as:
- A) Alex and Michael can’t convince Gregory of the extent of the problem caused by the listeria identified by the FDA.
- B) Alex wants to do the right thing by consumers of his salad oil products but Michael objects based on his cost benefit analysis.
- C) Alex and Michael want to make the plant seem as profitable as possible so the firm can do an IPO and cash out their shares but Gregory wants to inform the FDA of the extent of the listeria problem.
- D) Gregory and Michael are using cost-benefit analysis to pay fines and do the minimum for the FDA while Alex wants to comply fully.
Answer: B
Difficulty: 2 Medium
Topic: Giving Voice to Values
Learning Objective: 02-07 Describe the link between moral intensity and ethical decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
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