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Good Governance

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1. Character traits associated with ethical leadership include:a. Integrityb. Honestyc. Trustworthinessd. All of the aboveAnswer D:All of the above2. In the interview process questions that are not related to the persons ability to do the job should be avoided, including questions regarding the following subjects:a. Marital statusb. Agec. Religiond. All of the aboveAnswer D:All of the above3. In general terms, the duties expected of a professional are the maintenance of what five terms?a. Doubt, objectivity, competence, expectations, and virtueb. Security, integrity, competence, expectations, and judgmentc. Objectivity, integrity, competence, confidentiality, and disciplined. Due care, honesty, planning, fiduciary duty, and ethical conflict resolution

Answer: c. Objectivity, integrity, competence, confidentiality, and discipline4. Due to financial scandals in 2002, the United State Federal Legislature created what Board?a. Sarbanes-Oxleyb. PCAOBc. AICPAd. TSBPAAnswer:b. PCAOB5. According to the Senate Subcommittee that investigated Enron, the duties of the Board of Directors of a listed company includea. reviewing the listed companys overall business strategyb. selecting and compensating the listed companys senior executivesc. evaluating the listed companys outside auditord. overseeing the preparation of the listed companys financial statementse. all of the above

Answer:E. all of the above6. Which cultural value is more typically associated with Japan?a. Personal Rightsb. Obligation to Saviorc. Obligation to companyd. Religious Values

Answer:c. Obligation to company7. Which of the following is not an essential feature of a profession according to the Brooks text?a. Extensive trainingb. Provision of important services to societyc. High compensationd. training and skills largely intellectual in nature

Answer:d. training and skills largely intellectual in nature8. What are considered core values of the accounting profession?a. Integrityb. Objectivity, based upon independent judgmentc. Confidentialityd. Competencee. All the above

Answer:e. All the above9. Of the following, which is the most important aspect of a corporate ethics culture?a. Formal Ethics Codeb. Ethics Credoc. Ethics Communicationd. Ethical leadership by executives commonly called tone at the topAnswer:d. Ethical leadership by executives commonly called tone at the top

10. Corporations expect that a professional accountant in its employ will perform fiduciary duties with which of the following qualities?a. Competenceb. Integrityc. Confidentialityd. Objectivitye. All of the above

Answer:e. All of the above11. Key decisions driving hiring and firing decisions should be based upon:a. Marital Statusb. National Origin and Racec. Aged. Religione. Job performance and ability to do the job

Answer:e. Job performance and ability to do the job12. Facilitating payments as defined by the FCPA are problematic because the paymentsa. Add to the cost of doing businessb. Undermine merit based purchasingc. Risk possible negative consequences from competing stakeholdersd. All of the above

Answer:d. All of the above13. Directors and executives have found that support of stakeholders is essential to the optimal achievement ofa. Medium-term corporate objectivesb. Long-term corporate objectivesc. Short-term corporate objectivesd. All of the abovee. a and b

Answer:b. Long-term corporate objectives14. According to Kohlberg, this is the stage where moral individuals develop a principled conscience and adhere to moral and social codes because the codes are the moral principles that guide society.a. Firstb. Middlec. Fifthd. Sixthe. All the above

Answer:c. Fifth(In Stage five (social contract driven), the world is viewed as holding different opinions, rights and values. Such perspectives should be mutually respected as unique to each person or community. Laws are regarded as social contracts rather than rigid edicts. Those that do not promote the general welfare should be changed when necessary to meet the greatest good for the greatest number of people)15. General Values found in the majority of Professional Codes of Ethics that Accountants are to follow includea. Professional competenceb. Due professional carec. Proper supervisiond. All of the abovee. None of the aboveAnswer:d. All of the above16. Behavior that is uncivil does not include:a. Slamming doorsb. Profanityc. Throwing objectsd. None of the above

Answer:d. None of the above17. A conflict of interest occurs when:a. The defense against influences is managed to ensure that all employees are aware of the existence and consequences.b. When the independent judgment of a person is swayed, or might be swayed, from making decisions in the best interest of others who are relying on the judgment.c. Guidelines prove helpful to specify when it may be acceptable to give or accept a gift or preferential treatment.d. All of the above.e. None of the above.Answer:b. When the independent judgment of a person is swayed, or might be swayed, from making decisions in the best interest of others who are relying on the judgment.18. Expectations for behavior of professional accountants are and will be embodied in:a. Court decisionsb. Commonly understood standards of practicec. Research studies and articlesd. Regulators guidelinese. All of the above

Answer:e. All of the above19. Which of the following are the rationalizations of unethical actions according to Joseph Heath?a. Denial of responsibilityb. Denial of injuryc. Appeal to higher loyaltiesd. Denial by the victime. All of the above20. A typical board of directors duties includes all of the following except:a. Reviewing the companys overall business strategyb. Evaluating the companys outside auditorc. Overseeing the day-to-day activities of the companyd. Monitoring company performance

Answer:c. Overseeing the day-to-day activities of the company21. Which of the following factors isnot consideredby the U.S. Department of Justice when deciding when to prosecute directors with non-compliance with SOX requirements?a. Whether the compliance program is substantive or just a paper shamb. If there is staff sufficient to monitor and audit the compliance programc. Whether management is enforcing the programd. The size of the public company and its related ability to implement the programe. All of the above

Answer: d. The size of the public company and its related ability to implement the program22. Professional accountants are best suited to play the dominant or supporting roles in design, preparation and management of a variety of areas that are vital to corporate governance including all of the following except:a. Ethical corporate cultureb. Stakeholder interests assessmentc. Tax planningd. Ethics rick management systems

Answer:c. Tax planning23.The following matters make up the fraud triangle excepta. Knowledge or capabilityb. Motivec. Rationalizationd. OpportunityAnswer:a. Knowledge or capability24.Under state laws, directors should act in good faith and in the best interest of the corporation and its shareholders. Courts generally discuss a number of different types of fiduciary obligations. Select out of the following the answer(s) that would best describe the directors fiduciary obligations.a. The duty of obedience requires a director to avoid committing beyond the scope of the powers of a corporation as defined by its charterb. The duty of loyalty dictates that a director must not allow his personal interest to prevail over the interests of the corporationc. The duty of care requires a director to be diligent and prudent in managing the corporations affairsd. All of the aboveAnswer:d. All of the above25.Which of the following is not a guideline for acceptance of gifts or preferential treatment discussed in the Brooks text?a. What is the FMV?b. Is it nominal or substantial?c. Is it legal?d. What are the circumstances?e. What is the companys policy?

Answer: a. What is the FMV?

26. The professional accountant should be dedicated to serving the public interest. To achieve this the IFAC Code of Ethics for Professional Accountants indicates compliance with 5 fundamental principles. These five principles area. Objectivity, Independence, Professional Behavior, Integrity, and Due Careb. Objectivity, Reliability, Professional Appearance, Integrity, and Independence of Mindc. Integrity, Objectivity, Professional Behavior, Competence, and Confidentialityd. None of the above

Answer:c. Integrity, Objectivity, Professional Behavior, Competence, and Confidentiality27. Which of the following is a false statement concerningCircular 230lists of best practices?a. Cash IRS checks on behalf of clientsb. Provide the highest level of quality, professional care, acting fairly, and with integrityc. Avoid conflicts of interest when representing more than one clientd. Not advise the client to take a patently improper or frivolous positionAnswer:a. Cash IRS checks on behalf of clients28.Which of the following is an element in the fraud triangle?a. Motiveb. Rationalizationc. Opportunityd. All of the aboveAnswer:d. All of the above29. Which of the following is a false statement?a. Conflict of interests have been a subject of extreme importance in recent scandals in which employees, agents and professionals failed to exercise proper judgment on behalf of their principals.b. A conflict of interest occurs when the independent judgment of a person is swayed, or might be swayed, from making decisions in the best interest of others who are relying on that judgment.c. A professional accountant is expected to make judgments that are in the public interest.d. An executive is not expected to make judgments in the best interest of the company.

Answer: d. An executive is not expected to make judgments in the best interest of the company.30. In Maslows Hierarchy of Needs,