financial transaction

means using or transferring illegally received funds in a financial transaction to conceal their source or ownership or to facilitate an illegal activity.

A
Money laundering
B
Electronic funds transfer
C
Counterfeiting
D
Unethical funds transfer
E
Gouging

Which of the following has the power to enact legally binding ground rules for international commerce and trade policy?

A
Caux Round Table
B
Global Sullivan Organization
C
Federal Trade Commission
D
Global Commerce Association
E
World Trade Organization

E
The primary responsibility of ensuring that ethical, legal, and social standards are adhered to within a business rests with

A
the investors.
B
the government.
C
the management board.
D
the employees.
E
the customers.

How can a company align the interests of its owners with those of its managers through executive compensation?

A
By significantly reducing executive pay across the board
B
By basing compensation on performance and achievement of goals
C
By setting executive compensation at a level equal to the industry average
D
By capping executive compensation at ten times that of the lowest-paid employee
E
By basing salaries on seniority within the company

The agency problem, wherein ownership and control of a corporation are separate, is associated with

A
the shareholder model of corporate governance.
B
the stakeholder model of corporate governance.
C
the ethical model of corporate governance.
D
the agency model of corporate governance.
E
the investor model of corporate governance.

Which of the following are typically not secondary stakeholders?

A
The media
B
Special-interest groups
C
Customers
D
Trade associations
E
None of the above

Assessment of corporate culture will help with all of the following except

A
identifying the goal/mission of the organization.
B
identifying the values that underlie the organizational functioning.
C
determining the issues that need prioritized attention.
D
determining the line of business.
E
identifying key stakeholders.

Those who have a claim on some aspect of a firm’s products, operations, markets, industry, or outcomes are known as

A
shareholders.
B
stockholders.
C
stakeholders.
D
claimholders.
E
special-interest groups.

A stakeholder orientation is not complete unless it includes

A
finance.
B
marketing.
C
special-interest groups.
D
activities that actually address stakeholder issues.
E
accounting.

Which of the following is not one of the four hierarchical levels of social responsibility?

A
Ethical
B
Economic
C
Communal
D
Philanthropic
E
Legal

The reputation of a company as a good corporate citizen is influenced by

A
the extent of geographic coverage of the company’s operations.
B
the width and depth of the product line offered.
C
whether the company is global or local.
D
the attitude and behavior of the company toward the community of which the company is part.
E
the industry the company is part of.

Fiduciaries are persons in positions of ___________ who use _________ and _________ in acting on behalf of the best interests of the ______________.

A
control; strategy; decisions; consumers
B
trust; due care; loyalty; organization
C
importance; power; market intelligence; shareholders
D
senior management; information; intelligence; community
E
decision making; caution; allegiance; stakeholders

The three main components of corporate governance are

A
accountability, oversight, and control.
B
responsibility, formalization, and influence.
C
audits, omissions, and checks.
D
community welfare, employee benefits, and shareholder wealth maximization.
E
adherence to legal, ethical, and economic standards.

A
Fostering ethical decision making within an organization requires improving the firm’s ethical standards and

A
conducting simulation exercises.
B
improving unethical persons.
C
terminating ethical persons.
D
terminating unethical persons.
E
securing ethical suppliers.

Which of the following statements about codes of conduct is false?

A
They are formal statements of what an organization expects in the way of ethical behavior.
B
They guarantee an ethical business climate.
C
They help employees determine what behaviors are acceptable.
D
They provide rules and guidelines for employees to follow.
E
They should be specific enough to be reasonably capable of preventing misconduct.

A(n) _____ orientation creates order by requiring that employees identify with and commit to specific required conduct, whereas a(n) _____ orientation strives to develop shared standards.

A
obedience; values
B
compliance; values
C
legal; values
D
values; compliance
E
values; obedience

At the heart of the Federal Sentencing Guidelines for Organizations is the

A
“tit-for-tat” philosophy.
B
Golden Rule philosophy.
C
Iron Rule philosophy.
D
carrot-and-stick philosophy.
E
utilitarian philosophy.

Which of the following places more pressure on ethics officers to monitor financial and sales reporting?

A
Sarbanes-Oxley Act
B
Federal Sentencing Guidelines for Employees
C
Ethics Officer Responsibility Act
D
Sherman Antitrust Act
E
Enron Financial Responsibility Act

All of the following are useful in monitoring ethical conduct and measuring the effectiveness of the ethical program except

A
observation of employees.
B
internal audits.
C
firing.
D
surveys.
E
reporting systems.

Which of the following is not a typical activity for an ethics officer?

A
Coordinating the U.S. Sentencing Commission annual ethics audit
B
Assessing needs and risks that the ethics program must address
C
Developing and distributing a code of ethics
D
Conducting ethics training programs
E
Monitoring and auditing ethical conduct

Which of the following is a common mistake made in implementing an ethics program?

A
Setting realistic and measurable program objectives
B
Developing materials that do not meet the needs of the average employee
C
Adapting a firm’s ethics program for its international operations
D
Allowing employees to practice the skills they learn in ethics training through case studies and/or group exercises
E
Management taking “ownership” of the ethics program

One of the most effective methods of ethics training is

A
videos that demonstrate ethical decisions in the real world.
B
religious training.
C
surveys.
D
exercises in resolving ethical dilemmas that relate to actual situations employees may face on the job.
E
lectures.

______serve as a central contact point where critical comments, dilemmas, and advice can be assigned to the person most capable of handling the specific case.

A
Training programs
B
Mission statements
C
Codes of conduct
D
Help lines
E
Boards of directors

An organizational ethics program should help reduce the possibility of penalties and

A
positive public reaction to misconduct.
B
negative public reaction to ethical conduct.
C
negative public reaction to misconduct.
D
positive public reaction to ethical conduct.
E
indifferent public reaction to conduct.

C