Test Prep - Chapter 1Multiple Choice Questions _ 1)...

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Chapter 1Multiple Choice Questions ___________________________________________________ 1) Examining the interests of stakeholders is probably required for: a. High short-term profits 2) A value that is almost universally respected by stakeholder groups is: a. Hypernorm 3) Companies attempt to manage the risk of something happening that will have a negative or positive impact on the company’s objectives, such as: a. Credit risks b. Litigation risk c. Reputation risk d. Ethics risks e. All of the above ANSWER: e 4) Most large corporations do not consider these risks in a broad and comprehensive way: a. Operational risks b. Reputational risks c. Credit risks d. Market risks e. Ethics risks ANSWER: e 5) The following are examples of ethics risks faced by employees: a. Honesty and integrity b. Fairness and compassion c. Integrity and responsibility d. Fairness and integrity e. Responsibility and honesty ANSWER: b Page 1
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6) Not reporting environmental issues is an example of: a. Lack of transparency b. Lack of integrity c. Lack of accuracy d. All of the above e. None of the above ANSWER: b 7) Incomplete disclosure of the company’s revenue recognition policy is an example of: a. Lack of transparency b. Lack of integrity c. Lack of accuracy d. All of the above e. None of the above ANSWER: a 8) This philosophical approach requires that an ethical decision depends upon the duty, rights, and justice involved: a. Consequentialism b. Virtue ethics c. Duty ethics d. Righteousness e. Deontology ANSWER: e 9) The Moral Standards Approach focuses on the following dimensions of the impact of a proposed action: a. Net benefit to society, fair to all stakeholders, whether it is right b. Net benefit to society and whether it is legal c. Net benefit to society, fair to all stakeholders, whether it is legal d. Fair to most stakeholders and whether it is right e. Net benefit to society, fair to most stakeholders, whether it is right ANSWER: a 10) Effective crisis management could represent: a. An opportunity to avoid costs b. An opportunity to change employee’s perspectives on risk c. An opportunity to enhance the company’s reputation Page 2
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d. All of the above e. None of the above ANSWER: c Chapter 2 Multiple Choice Questions _______________________ 11) In order to ensure an investment-grade credit rating, Enron began to emphasize the following three actions: a. Reducing accruals, increasing cash flow, and lowering debt b. Smoothing accruals, increasing cash flow, and lowering debt c. Increasing cash flow, lowering debt, and smoothing earnings d. Increasing cash flow, lowering earnings and decreasing option expense e. Increasing cash flow, lowering debt, and decreasing option expense ANSWER: c 12) At the time of Enron’s collapse, the prevailing treatment for employee stock option expense was: a. Record stock options only when and if exercised, at exercise price b. Record all stock options when issued, at exercise price c. Record all stock options at market price
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Test Prep - Chapter 1Multiple Choice Questions _ 1)...

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