Professional Ethic- Chap 1

The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as:

• Credibility gap

• Expectations gap

• Audit gap

• Stewardship gap

• None of the above.

Which of the following is not a trend described in Chapter 1 as having an impact on the ethics of business?

• Directors’ legal liability

• Management’s stated intention to protect reputation

• Auditors’ legal liability

• Management’s assertions to shareholders on the adequacy of internal controls

• Management’s stated intention to manage risk.

Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts?

• Corporate annual report

• Corporate social responsibility report

• Corporate quarterly report

• Corporate stakeholder report

• Corporate ethics committee report

Professional Accountants, in their fiduciary role, owe their primary loyalty to:

• The accounting profession

• The client

• The general public

• Government regulations

• All of the above.

Ethical corporate behavior is expected to lead to:

• Higher profitability in the short-term

• Higher profitability both in the short-term and long-term

• Lower profitability in the long-term

• Higher profitability in the long-term

• Lower profitability both in the short-term and long-term

Examining the interests of stakeholders is probably required for:

• High short-term profits

• Optimal medium and longer-term profits

• Continuing support from stakeholder groups

• Effective risk management

• All of the above.

A value that is almost universally respected by stakeholder groups is:

• Super norm

• Alfa norm

• Value norm

• Hypernorm

• General norm

Since the mid-1990s, both management and auditors have become increasingly:

• Profit management oriented

• Ethics oriented

• Value management oriented

• Risk management oriented

• Marketing oriented.

The following are determinants of reputation:

• Trustworthiness and Responsibility

• Credibility, Responsibility and Relevance

• Responsibility and Impartiality

• Relevance and Impartiality

• Relevance, Credibility and Responsibility

The following would be a key control function of the Board of Directors:

• Set guidance and boundaries

• Appoint CEO

• Approve the sale of company’s assets

• Decide on the company’s auditor

• All of the above