Question

12. Which of the following is most reflective of ethical egoism?

a. Michelle reported fraud she had discovered because she believes that lying is always wrong.

b. Shan agreed to coach as many CPA candidates as possible, in spite of his busy schedule.

c. Jeff inflated his division's sales to get a bigger bonus for himself. (answer)

d. In making ethical decisions, Annie strives to be true to her basic ethical nature.

13. Which of the following violates the generally accepted auditing standard indicated?

a. Evidence: An auditor used last year's report as the only evidence for the current year's report. (answer)

b. Consistency: An auditor explained inconsistencies between a client's application of GAAP over the last two years.

c. Opinion: Auditors issued an adverse report on financial statements.

d. All of these violate the standards indicated.

14. Lenise laid out three potential responses for a violation of her company's ethics code. Based on the Langenderfer and Rockness model, what should she do next?

a. Speculate about what will happen for each of the three responses. (answer)

b.Determine if her company's ethics code is based primarily on ethical egoism or some other school of ethical thought.

c. Talk with a trusted co-worker.

d. Determine who will be affected by each potential response.

15. ___ was turned in by his sons for a Ponzi scheme.

a. Victor Vroom

b. Charles Ponzi

c. Bernie Madoff(answer)

d. Jeff Skilling

Answer 1

12. Answer is c) Jeff inflated his division's sales to get a bigger bonus for himself.

Reason- Ethical Egoism states that whatever maximises one's personal benefit is right.

13. Answer is a) Evidence: An auditor used last year's report as the only evidence for the current year's report.

Reason- Only last year's financial statement cannot act as an evidence, there should be proper evidences collected in respect of every head of balance sheet that should be attached with financial statements

14. Answer is a) Speculate about what will happen for each of the three responses.

Reason- Langenderfer and Rockness model states that firstly determine the fact, what, who, where, when and how

15. Answer is c) Bernie Madoff