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101. |
Codes of conduct and codes of ethics |
A. | are formal statements that describe what an organization expects of its employees. |
B. | become necessary only after a company has been in legal trouble. |
C. | are designed for top executives and managers, not regular employees. |
D. | rarely become an effective component of the ethics and compliance program. |
Answer» A. are formal statements that describe what an organization expects of its employees. |
102. |
Which of the following is NOT one of the primary elements of a strong organizational compliance program? |
A. | A written code of conduct |
B. | An ethics officer |
C. | Significant financial expenditures |
D. | A formal ethics training program |
Answer» C. Significant financial expenditures |
103. |
______________ are standards of behaviour that groups expect of their members. |
A. | Codes of conduct. |
B. | Group values. |
C. | Group norms. |
D. | Organizational norms. |
Answer» C. Group norms. |
104. |
In a ______________ organization, decision making is delegated as far down the chain of command as possible. |
A. | Decentralized |
B. | Creative |
C. | Flexible |
D. | Centralized |
Answer» D. Centralized |
105. |
____________ refers to a strategic process involving stakeholder assessment to create long-term relationships with customers, while maintaining, supporting, and enhancing the natural environment. |
A. | Eco-strategy |
B. | Green marketing |
C. | Superfund reauthorization |
D. | Recycle and reprocess management |
Answer» B. Green marketing |
106. |
The hand-of-government refers to the |
A. | ability of the government to interfere in business negotiations |
B. | role of corporations to be profitable within the law |
C. | effect of national politics on business decisions |
D. | impact of changing government regulations |
Answer» B. role of corporations to be profitable within the law |
107. |
An organisation's obligation to act to protect and improve society's welfare as well as its own interests is referred to as |
A. | organisational social responsibility |
B. | organisational social responsiveness |
C. | corporate obligation |
D. | business ethics |
Answer» A. organisational social responsibility |
108. |
The view that business exists at society's pleasure and businesses should meet public expectations of social responsibility is the |
A. | iron law of responsibility argument |
B. | enlightened self-interest argument |
C. | capacity argument |
D. | anti-freeloader argument |
Answer» B. enlightened self-interest argument |
109. |
Managerial ethics can be characterised by all of the following levels except |
A. | immoral management |
B. | amoral management |
C. | demoral management |
D. | moral management |
Answer» C. demoral management |
110. |
Which of the following is not one the underlying principles of the corporate governance Combined Code of Practice? |
A. | Openness |
B. | Integrity |
C. | Accountability |
D. | acceptability |
Answer» D. acceptability |
111. |
External audit of the accounts of a limited company is required |
A. | because it is demanded by the company’s bankers |
B. | by the Companies Act 2006 |
C. | at the discretion of the shareholders |
D. | to detect fraud |
Answer» B. by the Companies Act 2006 |
112. |
Directors’ responsibilities are unlikely to include. |
A. | a fiduciary duty |
B. | a duty to keep proper accounting records |
C. | a duty to propose high dividends for shareholders |
D. | a duty of care |
Answer» C. a duty to propose high dividends for shareholders |
113. |
A company may become insolvent if it |
A. | has negative working capital |
B. | cannot meet its budgeted level of profit |
C. | makes a loss |
D. | cannot pay creditors in full after realisation of its assets |
Answer» D. cannot pay creditors in full after realisation of its assets |
114. |
A director of a limited company may not be liable for wrongful trading if he or she |
A. | took every step to minimise the potential loss to creditors |
B. | increased the valuation of its inventories to cover any potential shortfall |
C. | introduced into the balance sheet an asset based on a valuation of its brands sufficient to meet any shortfall |
D. | brought in some expected sales from next year into the current year |
Answer» A. took every step to minimise the potential loss to creditors |
115. |
Fraudulent trading may be |
A. | a civil offence committed by any employee |
B. | a criminal offence committed only by directors of a limited company |
C. | a civil and a criminal offence committed only by directors of a limited company |
D. | a civil and a criminal offence committed by any employee |
Answer» D. a civil and a criminal offence committed by any employee |
116. |
Disqualification of directors may result from breaches under the |
A. | Sale of Goods Act 1979 |
B. | Financial Services Act 1986 |
C. | Companies Act 2006 and Insolvency Act 1986 |
D. | Health and Safety at Work Act 1974 |
Answer» C. Companies Act 2006 and Insolvency Act 1986 |
117. |
Directors may not be disqualified for |
A. | continuing to trade when the company is insolvent |
B. | persistent breaches of company legislation |
C. | paying inadequate attention to the company finances |
D. | being convicted of drunken driving |
Answer» D. being convicted of drunken driving |
118. |
Which of the following actions will not help directors to protect themselves from noncompliance with their obligations and responsibilities? |
A. | keeping themselves fully informed about company affairs |
B. | ensuring that regular management accounts are prepared by the company |
C. | seeking professional help |
D. | including a disclaimer clause in their service contracts |
Answer» D. including a disclaimer clause in their service contracts |
119. |
Co-ording to Cadbury (2002), corporate governance is an issue of power and: |
A. | Rights |
B. | Accountability |
C. | Profit |
D. | Appropriability |
Answer» B. Accountability |
120. |
The OECD argues that corporate governance problems arise because: |
A. | Ownership and control is separated |
B. | Managers always act in their own self interest |
C. | Profit maximization is the main objective of organizations |
D. | Stakeholders have differing levels of power |
Answer» A. Ownership and control is separated |
121. |
The Institute of Chartered Accountants in England and Wales considers argue that one particular stakeholder group should have primacy over all other groups. Which stakeholder group are they referring to? |
A. | Customers |
B. | Managers |
C. | Shareholders |
D. | Society |
Answer» C. Shareholders |
122. |
An organization that is owned by shareholders but managed by agents on their behalf is conventionally known as the modern: |
A. | Conglomerate |
B. | Corporation |
C. | Company |
D. | Firm |
Answer» B. Corporation |
123. |
The modern corporation has four characteristics. These are limited liability, legal personality, centralized management and: |
A. | Fiduciary duty |
B. | Stakeholders |
C. | Shareholders |
D. | Transferability |
Answer» D. Transferability |
124. |
What makes a corporation distinct from a partnership? |
A. | If the members of a corporation die, the corporation remains in existence providing it has capital |
B. | If the members of a corporation die, the corporation ceases to exist |
C. | A corporation cannot own property |
D. | A corporation cannot be held responsible for the illegal acts of its employees |
Answer» A. If the members of a corporation die, the corporation remains in existence providing it has capital |
125. |
The term 'asymmetry of information' means information in a corporation is: |
A. | Transferable to all stakeholders |
B. | Not transferable to all stakeholders |
C. | Not equally transparent to all stakeholders |
D. | Equally transparent to all stakeholders |
Answer» C. Not equally transparent to all stakeholders |
126. |
The view that sees profit maximization as the main objective is known as: |
A. | Shareholder theory |
B. | Principal-agent problem |
C. | Stakeholder theory |
D. | Corporation theory |
Answer» C. Stakeholder theory |
127. |
Where an organization takes into account the effect its strategic decisions have on society, this is known as: |
A. | Corporate governance |
B. | Business policy |
C. | Business ethics |
D. | Corporate social responsibility |
Answer» D. Corporate social responsibility |
128. |
Which intervention resulted from the Enron scandal? |
A. | The Hampel Committee |
B. | The Sarbannes-Oxley Act |
C. | The Greenbury Committee |
D. | The Cadbury Committee |
Answer» B. The Sarbannes-Oxley Act |
129. |
Executive pay in the UK was reviewed by: |
A. | The Greenbury Committee |
B. | The Hampel Committee |
C. | The Cadbury Committee |
D. | The Higgs Committee |
Answer» A. The Greenbury Committee |
130. |
In Japan, some corporations operate within the philosophy of 'kyosei'. The term 'kyosei' means: |
A. | No man shall be richer than another man |
B. | All stakeholders are equal |
C. | Living and working for the common good |
D. | If the corporation is bad, society is bad |
Answer» C. Living and working for the common good |
131. |
When managerial self-dealings are excessive and left unchecked, |
A. | they can have serious negative effects on share values |
B. | they can impede the proper functions of capital markets. |
C. | they can impede such measures as GDP growth. |
D. | all of the above |
Answer» D. all of the above |
132. |
Corporate governance structure |
A. | varies a great deal across countries. |
B. | has become homogenized following the integration of capital markets. |
C. | has become homogenized due to cross-listing of shares of many public corporations. |
D. | none of the above |
Answer» A. varies a great deal across countries. |
133. |
In a public company with diffused ownership, the board of directors is entrusted with |
A. | monitoring the auditors and safeguarding the interests of shareholders. |
B. | monitoring the shareholders and safeguarding the interests of management. |
C. | monitoring the management and safeguarding the interests of shareholders. |
D. | none of the above |
Answer» C. monitoring the management and safeguarding the interests of shareholders. |
134. |
The key weakness of the public corporation is |
A. | too many shareholders, which makes it difficult to make corporate decision. |
B. | relatively high corporate income tax rates. |
C. | conflicts of interest between managers and shareholders. |
D. | conflicts of interests between shareholders and bondholders. |
Answer» C. conflicts of interest between managers and shareholders. |
135. |
When company ownership is diffuse, |
A. | a "free rider" problem discourages shareholder activism. |
B. | the large number of shareholders ensures strong monitoring of managerial behavior because with a large enough group, there's almost always someone who will to incur the costs of monitoring management. |
C. | few shareholders have a strong enough incentive to incur the costs of monitoring management. |
D. | both a) and c) are correct |
Answer» D. both a) and c) are correct |
136. |
In many countries with concentrated ownership |
A. | the conflicts of interest between shareholders and managers are worse than in countries with diffuse ownership of firms. |
B. | the conflicts of interest are greater between large controlling shareholders and small outside shareholders than between managers and shareholders. |
C. | the conflicts of interest are greater between managers and shareholders than between large controlling shareholders and small outside shareholders. |
D. | corporate forms of business organization with concentrated ownership are rare. |
Answer» B. the conflicts of interest are greater between large controlling shareholders and small outside shareholders than between managers and shareholders. |
137. |
In what country do the three largest shareholders control, on average, about 60 percent of the shares of a public company? |
A. | United States |
B. | Canada |
C. | Great Britain |
D. | Italy |
Answer» D. Italy |
138. |
The public corporation |
A. | is jointly owned by a (potentially) large number of shareholders. |
B. | offers shareholders limited liability. |
C. | separates the ownership and control of a firm's assets. |
D. | all of the above |
Answer» D. all of the above |
139. |
Periodic ethics audits |
A. | Are required by the Indian stock exchange |
B. | A method of fostering ethics |
C. | A method of quantitative assessment |
D. | Always use external consultants |
Answer» B. A method of fostering ethics |
140. |
Political intrusion into business |
A. | May be desirable in some circumstances |
B. | Is anathema |
C. | Politics should have no say in how business is conducted |
D. | state legislation over-rides Federal Legislation |
Answer» A. May be desirable in some circumstances |
141. |
The reach of codes is |
A. | Restricted to those obliged to conform by virtue of membership |
B. | Applicable to all |
C. | Applicable to the public only |
D. | the same as the reach of the law |
Answer» A. Restricted to those obliged to conform by virtue of membership |
142. |
East India Company |
A. | Was always a management agency for the British government |
B. | had a continuous trade monopoly until 1873 |
C. | Went out of existence at the time of Indian independence |
D. | Largely set commercial and management practices for India |
Answer» D. Largely set commercial and management practices for India |
143. |
Quantification in ethics may be done by |
A. | Putting monetary value on prospective actions |
B. | Comparing the value of one action with another |
C. | Both A and B |
D. | Neither A or B |
Answer» C. Both A and B |
144. |
When communicating a code of conduct |
A. | Focus on values that should guide decision making |
B. | Provide the same code of conduct to all departments regardless of its length. |
C. | Refrain from changing the code of conduct regularly |
D. | Fewer employees will read the code if it is short |
Answer» A. Focus on values that should guide decision making |
145. |
The __________ approach to formal corporate ethics initiatives is proactive and inspirational. |
A. | Rules |
B. | Compliance |
C. | Principles |
D. | Values |
Answer» D. Values |
146. |
The _________ approach to formal corporate ethics initiatives focuses on meeting required behavior norms or obeying the letter of the law |
A. | Rules |
B. | Compliance |
C. | Principles |
D. | Values |
Answer» B. Compliance |
147. |
Which of the following is associated with the classical view of social responsibility? |
A. | economist Robert Reich |
B. | concern for social welfare |
C. | stockholder financial return |
D. | voluntary activities |
Answer» C. stockholder financial return |
148. |
How many stages are in the model of an organization social responsibility progression? |
A. | 3 |
B. | 4 |
C. | 5 |
D. | 6 |
Answer» B. 4 |
149. |
The belief that a firm pursuit of social goals would give them too much power is known as what argument in opposition to a firm being socially responsible? |
A. | Costs |
B. | lack of skills |
C. | lack of broad public support |
D. | too much power |
Answer» D. too much power |
150. |
Social obligation is the obligation of a business to meet its _______________. |
A. | social and technological responsibilities |
B. | economic and legal responsibilities |
C. | technological and economic responsibilities |
D. | economic and social responsibilities |
Answer» B. economic and legal responsibilities |
151. |
Under the concept of social obligation, the organization ________________. |
A. | does what it can to meet the law, and a little bit more for stakeholders |
B. | fulfills its obligation to the stakeholders, which makes it fulfill the law, too |
C. | does the minimum required by law |
D. | fulfills its obligation to the law and its stakeholders |
Answer» C. does the minimum required by law |
152. |
Social responsiveness refers to the capacity of a firm to adapt to changing _________________. |
A. | societal conditions |
B. | organizational conditions |
C. | societal leaders |
D. | organizational managers |
Answer» A. societal conditions |
153. |
Applying social criteria to an investment decision refers to ________________. |
A. | socioeconomic view |
B. | social responsiveness |
C. | social responsibility |
D. | social screening |
Answer» D. social screening |
154. |
Which of the following is a basic definition of ethics? |
A. | moral guidelines for behavior |
B. | rules for acknowledging the spirit of the law |
C. | rules or principles that define right and wrong conduct |
D. | principles for legal and moral development |
Answer» C. rules or principles that define right and wrong conduct |
155. |
Reasoning at the ______________ level of moral development indicates that moral values reside in maintaining the conventional order and the expectations of others. |
A. | Preconventional |
B. | Conventional |
C. | Principled |
D. | arrival |
Answer» B. Conventional |
156. |
A personality measure of person’s convictions is _______________. |
A. | moral development |
B. | ego strength |
C. | locus of control |
D. | social desirability |
Answer» B. ego strength |
157. |
Which of the following organizational structural characteristics would most likely result in managerial ethical behavior? |
A. | few job descriptions |
B. | formal rules |
C. | mixed messages from authority figures |
D. | All of these |
Answer» B. formal rules |
158. |
Global organizations must __________ their ethical guidelines so that employees know what is expected of them while working in a foreign location |
A. | Clarify |
B. | Provide |
C. | Establish |
D. | broaden |
Answer» A. Clarify |
159. |
_____________ is a document that outlines principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption. |
A. | A code of ethics |
B. | The Global Compact |
C. | The Foreign Corrupt Practices Act |
D. | Global Ethics |
Answer» B. The Global Compact |
160. |
A _____________ is a formal statement of an organization primary values and the ethical rules it expects its employees to follow |
A. | mission statement |
B. | statement of purpose |
C. | code of ethics |
D. | vision statement |
Answer» C. code of ethics |
161. |
CSR considers |
A. | Impact of the company’s actions on society. |
B. | Impact of company’s success. |
C. | Impact of company’s failure. |
D. | Impact of company’s wind up. |
Answer» A. Impact of the company’s actions on society. |
162. |
CSR includes |
A. | Economic responsibilities. |
B. | Legal responsibilities. |
C. | Ethical responsibilities. |
D. | Philanthropic responsibilities |
Answer» A. Economic responsibilities. |
163. |
Stakeholders are the individuals or groups that |
A. | Have an interest in and are affected by company’s actions. |
B. | Have a mere interest in an Organization. |
C. | Are affected by company’s actions |
D. | Above all. |
Answer» A. Have an interest in and are affected by company’s actions. |
164. |
Why, according to stakeholder theory, is it in companies' best interests to pay attention to their stakeholders? |
A. | If firms only act in their own self-interest employees may feel exploited. |
B. | If firms only act in their own self-interest government might put more regulation on them. |
C. | If firms only act in their own self-interest customers might not like the image that the company portray. |
D. | If firms only act in their own self-interest and inflict harm on stakeholders then society might withdraw its support. |
Answer» D. If firms only act in their own self-interest and inflict harm on stakeholders then society might withdraw its support. |
165. |
The ________ dimension of social responsibility refers to a business's societal contribution of time, money, and other resources. |
A. | Ethical |
B. | Philanthropic |
C. | Volunteerism |
D. | Strategic |
Answer» B. Philanthropic |
166. |
Better access to certain markets, differentiation of products, and the sale of pollution-control technology are ways in which better environmental performance can: |
A. | increase revenue |
B. | increase costs |
C. | decrease revenue |
D. | decrease costs |
Answer» A. increase revenue |
167. |
When a firm charges different prices to different groups of customers, it may be accused of: |
A. | cultural relativism |
B. | money laundering |
C. | facilitating payments |
D. | price discrimination |
Answer» A. cultural relativism |
168. |
The ability to interpret and adapt successfully to different national, organizational, and professional cultures is called: |
A. | national competitiveness. |
B. | global development. |
C. | cultural intelligence. |
D. | stakeholder sensitivity. |
Answer» C. cultural intelligence. |
169. |
In a ______________ organization, decision making is delegated as far down the chain of command as possible. |
A. | Decentralized |
B. | Creative |
C. | Flexible |
D. | Centralized |
Answer» D. Centralized |
170. |
An organisation's obligation to act to protect and improve society's welfare as well as its own interests is referred to as |
A. | organisational social responsibility |
B. | organisational social responsiveness |
C. | corporate obligation |
D. | business ethics |
Answer» A. organisational social responsibility |
171. |
Which of the following actions will not help directors to protect themselves from non-compliance with their obligations and responsibilities? |
A. | keeping themselves fully informed about company affairs |
B. | ensuring that regular management accounts are prepared by the company |
C. | seeking professional help |
D. | including a disclaimer clause in their service contracts |
Answer» D. including a disclaimer clause in their service contracts |
172. |
An organization that is owned by shareholders but managed by agents on their behalf is conventionally known as the modern: |
A. | Conglomerate |
B. | Corporation |
C. | Company |
D. | Firm |
Answer» B. Corporation |
173. |
The __________ approach to formal corporate ethics initiatives is proactive and inspirational. |
A. | Rules |
B. | Compliance |
C. | Principles |
D. | Values |
Answer» D. Values |
174. |
_____________ is a document that outlines principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption. |
A. | A code of ethics |
B. | The Global Compact |
C. | The Foreign Corrupt Practices Act |
D. | Global Ethics |
Answer» B. The Global Compact |
175. |
A _____________ is a formal statement of an organization primary values and the ethical rules it expects its employees to follow |
A. | mission statement |
B. | statement of purpose |
C. | code of ethics |
D. | vision statement |
Answer» C. code of ethics |
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