Full file at ://fratstock.eu/sample/Test-Bank-Dynamic-Business... · 2017. 5. 8. · 24. What do the letters "WPH" mean in reference to the "WPH Framework for Business Ethics" discussed

Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime

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Chapter 02

Business Ethics and White-Collar Crime

True / False Questions

1. Ethical conversation is primarily about finding the one and only right thing to do.

True False

2. The social responsibility of business consists only of the expectations employees have of

employers.

True False

3. Business ethics is the application of ethics to the special problems and opportunities

experienced by business people.

True False

4. In some countries businesses must pay bribes in order to receive legitimate supplies.

True False

5. The definition of stakeholder is the same as the definition of shareholder.

True False

6. The community in which a firm operates would not be considered a stakeholder of the

firm.

True False

7. In an ethical analysis using the WPH Framework referenced in the text, owners are the

most important stakeholders and should receive the greatest consideration in decision

making.

True False


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8. The primary purpose of criminal law is to compensate a victim.

True False

9. Under our criminal laws that exist today, white-collar crime is not punishable by

imprisonment.

True False

10. Congress amended the Foreign Corrupt Practices Act to conform to the Anti-Bribery

Convention adopted by the Organization for Economic Cooperation and Development.

True False

11. In general, China punishes embezzlement less severely than the U.S.

True False

12. Under the common law, a corporation could not be considered a criminal because it was

not an actual person and, thus, did not have a mind.

True False

13. Under current law, corporations cannot be held criminally accountable for strict-liability

offenses.

True False

14. Ethical relativism is a theory of ethics that denies the existence of objective moral

standards.

True False

15. Situational ethics is the same thing as ethical relativism.

True False


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16. Absolutism is also referred to as ethical fundamentalism.

True False

17. Consequentialism provides a rigid set of rules to follow regardless of the situation.

True False

18. Rule utililtarianism tells business managers to examine all the potential actions in each

situation and choose the action that yields the greatest amount of pleasure over pain for all

involved.

True False

19. Utilitarianism is a form of consequentialism.

True False

20. Deontology consists of acting on the basis of the recognition that certain actions are right

or wrong, regardless of their consequences.

True False

Multiple Choice Questions

21. Which of the following is the study and practice of decisions about what is good, or

right?

A. Morals

B. Ethics

C. Consequences

D. Law

E. Business


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22. A local Chamber of Commerce plans a seminar on "the social responsibility of business."

What does that term reference?

A. The responsibility of business to make profit for shareholders.

B. The responsibility of business to have annual meetings.

C. The expectations that the community imposes on firms doing business inside its borders.

D. The expectations of employees regarding wage rates.

E. The expectations of management in regard to adequate utility resources.

23. As pointed out in the text section "Business Ethics and Italian Taxes" which of the

following is true regarding the application of ethics in a global context?

A. While ethical considerations may vary, the enforcement of laws remains the same from

country to country.

B. Ethical considerations vary from country to country as do practices of law enforcement.

C. Ethical considerations do not vary from country to country although rules for law

enforcement do vary.

D. The Italian government seeks to discuss taxes after returns are filed because

underestimating profits is rarely a problem there.

E. The Italian government seeks to discuss taxes before returns are filed because


24. What do the letters "WPH" mean in reference to the "WPH Framework for Business

Ethics" discussed in the text?

A. Who, Purpose, and How

B. When, Plan, and How

C. Why, Procedure, and Hope

D. Where, Plan, and Hope

E. Where, Procedure, and How

25. Which of the following are stakeholders of a business?

A. Shareholders

B. Employees

C. Customers

D. Management

E. All the above


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26. Which of the following is true under the WPH process of ethical decision making?

A. The interest of management is ranked higher than that of employees when decisions are

made.

B. The interest of owners is ranked higher than that of both employees and management when

decisions are made.

C. When decisions are made, the interest of the community as a whole is considered last.

D. The interest of management is ranked higher than that of employees when decisions are

made, but the interest of owners is ranked higher than the interest of any group.

E. None of the above are true.

27. What are some examples of purpose in the WPH process of ethical decision making?

A. Freedom

B. Security

C. Efficiency

D. Freedom and security, but not efficiency

E. Freedom, security and efficiency

28. Which of the following is a part of the "how" in the WPH process of decision making?

A. Public disclosure

B. Customer satisfaction

C. Profit maximization

D. Whistle-blowing

E. All the above

29. Positive abstractions that capture our sense of what is good or desirable are called

______.

A. Ethical ideas

B. Values

C. Conscience demands

D. Desirable principles

E. Action goals


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30. The idea that we should interact with other people in a manner consistent with the manner

in which we would like for them to interact with us is called ______.

A. The Equalization Rule

B. The Ethical Realization Rule

C. The Silver Rule

D. The Golden Rule

E. The Ten Commandments Rule

31. The "public disclosure" test for ethical behavior is sometimes referred to as the ______

test.

A. Television

B. Powell

C. Self-conscious

D. Golden

E. Primary

32. The ______ for ethical behavior seeks consideration of what the world would be like if a

decision is copied by everyone else.

A. Golden Rule

B. Universalization test

C. Public Disclosure

D. Relevant Disclosure

E. World Rule

33. Which of the following is true regarding the universalization test for ethical behavior?

A. It is the same as the public disclosure test.

B. It has been discredited.

C. It is the same as the golden rule test.

D. It has been enacted into law by federal law.

E. None of the above.


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34. Which of the following is the term that describes wrongful behavior in a criminal action?

A. Mens rea.

B. Actus reus.

C. Res judicata.

D. Stare decisis.


35. Which of the following is a term describing the wrongful state of mind needed for a

criminal action?

A. Mens rea.

B. Actus reus.

C. Res judicata.

D. Stare decisis.

E. None of the above

36. Strict liability is a term used to describe which of the following:

A. Liability without fault.

B. Negligence.

C. Actus reus.

D. Intentional wrongdoing.

E. Recklessness.

37. Which of the following is an example of the imposition of strict liability?

A. A robber pulls a gun to rob a bank teller.

B. A burglar breaks into a home to steal jewelry.

C. A business sells cigarettes to a minor.

D. A minor shoplifts in a department store.

E. An adult shoplifts in a department store.

38. Which of the following is punishable by imprisonment for more than one year or death?

A. Misdemeanor.

B. Felony.

C. Petty offenses.

D. Tort offenses.

E. Any business related crime.


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39. Which of the following are less serious crimes punishable by fines or imprisonment of

less than one year?

A. Misdemeanor.

B. Felony.

C. Petty offenses.

D. Tort offenses.

E. Any business related crime

40. Which of the following are minor offenses usually punishable by a jail sentence of less

than six months or a small fine with an example being violation of a building code?

A. Insignificant offenses.

B. Felony.

C. Petty offenses.

D. Tort offenses.


41. Which of the following serves to combat bribery of foreign officials?

A. The Foreign Official Bribery Act

B. The International Bribery Prohibition Act

C. The Fair Business Act

D. The International Fair Business Practices Act

E. The Foreign Corrupt Practices Act

42. Which of the following is the making of threats for the purpose of obtaining money or

property?

A. Bribery

B. Criminal Fraud

C. Extortion

D. Both A and C

E. Importation


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43. Which of the following is the making of an entry into the books of a bank or corporation

that is designed to represent the existence of funds that do not exist?

A. False entries

B. Defalcation

C. False pretenses

D. Ponzi scheme

E. Pretexting

44. Which of the following is a false document or sign of existence used to perpetrate fraud,

such as making counterfeit money?

A. False entries

B. False token

C. False pretenses

D. Ponzi scheme

E. Pretexting

45. Which of the following is the misappropriation of trust funds or money held in a fiduciary

capacity?

A. False entries

B. Defalcation

C. False pretenses

D. Ponzi scheme

E. Pretexting

46. Which of the following is an investment swindle in which high profits are promised from

fictitious sources and early investors are paid off with funds raised from later investors?

A. False entries

B. False token

C. False pretenses

D. Ponzi scheme

E. Pretexting


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47. Zack, the president of ABC Company, falsified documents to make it appear as if he had

been granted stock options on certain dates, and he selected the dates after the fact, picking

dates on which the stock price was low. Which of the following offenses, if any, did he

commit?

A. Insider trading

B. Pretexting

C. Defalcation

D. Stock option back-dating

E. He did not commit any offense

48. Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is

simply taking money for subscriptions and has absolutely no intention of ever arranging for

the provision of magazines. Which of the following offenses, if any, has he committed?

A. Defalcation

B. False entry

C. False token

D. False pretenses

E. Ponzi scheme

49. Which of the following is using fraudulent means to obtain information about someone's

phone use?

A. Pretexting

B. Ponzi scheme

C. False pretenses

D. False token

E. Defalcation

50. Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank

account. Instead of placing the money into the customer's account, Ben puts it into his pocket.

Which of the following offenses has he committed?

A. Forgery

B. False entries

C. False token

D. Embezzlement

E. Both false token and embezzlement


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51. Which of the following is a person who illegally accesses or enters another person's or a

company's computer system to obtain information or to steal money?

A. Backer

B. Reacher

C. Hacker

D. Trespasser

E. Illicit user

52. Which of the following is true regarding corporate executives being held personally liable

for business crime?

A. Corporate executives may never be held personally liable for a business crime.

B. Corporate executives may only be held personally liable for a business crime if they

benefited personally from their actions in executing the business crime.

C. Corporate executives may be found personally liable for a business crime regardless of

whether the business crime was committed for personal benefit or for the benefit of the

corporation.

D. A court may not assess criminal liability on a corporate executive unless the executive

directly engaged in the specific criminal violation.

E. Criminal liability may not be assessed against a corporate executive unless the executive

directly engaged in the criminal activity and also profited directly and personally from the

criminal activity

53. Which amendment provides the right to a speedy and public trial?

A. The Second Amendment.

B. The Third Amendment.

C. The Fourth Amendment.

D. The Fifth Amendment.

E. The Sixth Amendment.

54. Which of the following is true regarding the Fourteenth Amendment?

A. It is part of the Bill of Rights.

B. Its safeguards only apply at the federal level.

C. It extends most constitutional rights to defendants at the state level.

D. It is a part of the Bill of Rights, its protections apply at the federal level, and its protections

also apply at the state level.

E. It is not a part of the Bill of Rights, and its protections apply only at the federal level.


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55. Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that

there is ________ that a suspect committed or is planning to commit a crime.

A. Likely cause

B. Suspected cause

C. Certainty

D. Probable cause

E. Information

56. Of which of the following must a defendant be informed before questioning?

A. That the defendant must answer questions or there will be a presumption of guilt at trial.

B. That statements made to law enforcement before arraignment may not be used against the

defendant in court.

C. That the defendant has the right to consult an attorney before speaking to the police.

D. That unless the defendant can afford any attorney, the defendant will not have an attorney.

E. That the right to an attorney does not begin until after the defendant is arraigned.

57. Which of the following occurs when a defendant makes a first appearance?

A. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest.

B. A magistrate determines whether there was probable cause for the arrest.

C. A magistrate determines whether the defendant was properly booked.

D. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest

and also whether the defendant was properly booked.


58. Which of the following is a plea in which the defendant does not admit guilty but agrees

not to contest the charges?

A. Petit defense.

B. Information.

C. Nolo contendere.

D. Sine qua non.

E. Plea avoidance.


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59. A judge reports that a jury was "hung". What does the judge mean?

A. That the jury wanted to hang the defendant by imposing a heavy sentence.

B. That the jury wanted to hang the prosecutor for unjustly charging the defendant.

C. That the jury could not reach a decision.

D. That the jury had waited an excessive amount of time before reaching a verdict.

E. That the jury had waited an excessive amount of time before retiring for the evening.

60. Which of the following is a federal law that has been somewhat successful in the battle

against business-related crimes?

A. The Racketeer Influenced and Corruption Organizations Act.

B. The False Claims Act.

C. The Sarbanes-Oxley Act of 2002.

D. All of the above.


61. Which of the following was created specifically to combat white-collar crime?




D. The White-Collar Enforcement Act.


62. Courts have defined a pattern of racketeering under RICO as more than _______

action[s].

A. One

B. Two

C. Three

D. Four

E. None of the above. There is no requirement of more than one action


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63. Carla learns that her employer, a healthcare facility, is committing fraud against the

government by filing false Medicare claims. Under which of the following might she obtain a

portion of any recovery obtained by the government?

A. RICO.



D. The Medicare Recovery Act.

E. The Healthcare Fraud Act.

64. Which of the following was passed largely in response to business scandals of the 2000's,

such as Enron?

A. RICO.





65. Under the Sarbanes-Oxley Act of 2002, it is a felony for an auditor to willfully fail to

maintain proper records of audits and work papers for at least _____ years.

A. Two

B. Three

C. Four

D. Five

E. Ten

66. The ethical theory that requires that we evaluate the morality of an action by imagining

ourselves in the position of the person facing the ethical dilemma is called ______.

A. Situational ethics

B. Ethical relativism

C. Absolutism

D. Consequentialism

E. Relativity ethics


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67. How is absolutism different from ethical relativism and situational ethics?

A. It applies utilitarianism.

B. It holds that a cost-benefit analysis should be applied.

C. It holds that whether an action is moral does not depend on the perspective of the person

facing the ethical dilemma.

D. It applies virtue ethics.

E. It applies corporate ethics principles.

68. Which of the following describes the theory of ethical relativism?

A. Its only principle is the denial of the existence of objective moral standards.

B. It holds that individuals must evaluate actions on the basis of what they feel is best for

themselves based upon objective moral standards.

C. It holds that since morality is relative, we have a basis upon which to criticize the behavior

of others as immoral.

D. It denies the existence of objective moral standards, it holds that individuals must evaluate

actions on the basis of what they feel is best for themselves, but it does not hold that morality

is relative.

E. It denies the existence of objective moral standards; it holds that individuals must evaluate

actions on the basis of what they feel is best for themselves; and it holds that since morality is

relative, no one can criticize another's behavior as immoral.

69. What is another name for absolutism?

A. Ethical fundamentalism


C. Virtue ethics

D. Rule utilitarianism

E. Ethics of care

70. Which of the following is an ethical school of thought that denies the existence of

objective moral standards?

A. Absolutism

B. Deontology

C. Categorical Imperative

D. Uncertainty of Thought



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71. Which of the following is true under the ethical theory of absolutism?

A. It requires that individuals defer to a set of rules to guide them and holds that all rational

individuals will agree on the appropriate set of rules to follow.

B. It requires that all individuals decide for themselves what is ethical depending on the

circumstances.

C. It requires that all individuals in a community agree on an appropriate set of ethical rules,

but recognizes that individuals outside the community may have a different set of ethical

rules.

D. It holds that individuals should decide ethical principles based on their upbringing but not

upon the situation itself.

E. It requires that individuals defer to a set of rules to guide them but recognizes that people

may disagree about which rules to follow.

72. What is the basis of consequentialism?

A. Deontology

B. Categorical imperatives

C. Inquiry into the consequences

D. Disregard of consequences

E. Act utilitarianism

73. Kantian ethics is involved with which of the following ethical theories?

A. Deontology

B. Act utilitarianism

C. Rule utilitarianism

D. Absolutism

E. Situational ethics

74. What is a difficulty with the application of virtue ethics?

A. The applicable categorical imperatives.

B. The lack of agreement about the meaning of "the good life."

C. The applicable principle of rights.

D. The ethics of care analysis.

E. Both the applicable categorical imperatives and the lack of agreement about the meaning of

"the good life."


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75. ______ adherents believe that when one individual, the caregiver, meets the needs of one

other person, the cared-for party, the caregiver is helping to meet the needs of all the

individuals who fall within the cared-for party's web of care.

A. Deontology

B. Utilitarianism

C. Absolutism

D. Virtue ethics

E. Ethics of care

76. An ethical theory that urges managers to take those actions that provide the greatest

pleasure after having subtracted the pain or harm associated with the action is question is

called _____.

A. Deontology

B. Utilitarianism

C. Kantian ethics

D. Absolutism

E. Ethical relativism

77. A business manager who deceives everyone because the manager believes the deception

maximizes pleasure over pain in a given situation is acting consistently with which ethical

theory?

A. Act deontology


C. Act utilitarianism

D. Ethical fundamentalism

E. Rule utilitarianism

78. A business manager who considers it wrong to terminate a person whose spouse has

terminal cancer because a firm has an obligation to support its employees when they are

vulnerable is acting consistently with which ethical theory?

A. Deontology






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79. Which of the following theories is a form of consequentialism?

A. Deontology

B. Ethical relevance

C. Utilitarianism


E. Ethical Relativism

80. A reference to "Kantian ethics" most likely involves which of the following theories?

A. Deontology


C. Utilitarianism



81. A person who believes that they should not cheat on a drug test because if everyone did

so, the drug test would be meaningless is applying a[n] ______.

A. Ethics of care

B. Virtual analysis

C. Cost-benefit analysis

D. Fundamentalist approach

E. Categorical imperative

82. Which of the following helps explain why the principle of deontology may be difficult to

apply?

A. People disagree about what duties we owe to one another.

B. People disagree about whether consequences are positive or negative.

C. People disagree about the ethics of care.

D. People disagree about what duties we owe to one another and also people disagree about

whether consequences are positive or negative.

E. People disagree about what duties we owe to one another, people disagree about whether

consequences are positive or negative, and also people disagree about the ethics of care.


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83. The ethical system in which the development of virtues, or positive character trains such

as courage, justice, and truthfulness, is the basis for morality is called ______.

A. Absolutism decision

B. Virtual analysis

C. Virtue ethics



84. The ______ holds that the right course of action is the option most consistent with the

building and maintaining of human relationships.

A. Ethics of Care

B. Principle of virtue ethics

C. Deontology

D. Act utilitarianism


Connie, the president of a company that makes paper, has a new interest in the environment.

She recently went to a seminar on environmental dangers and has decided to take steps to

clean things up. She started at home and has now felt compelled to change things at work.

Connie had to face the fact that her company has been cheating and is not in compliance with

applicable environmental regulations due to dumping in the nearby river. Her company has

never been cited, however, because it employs a very large number of people in the

community, including the mayor's wife and the chief-of-police's brother. On her mission to

clean things up, Connie has decided to go even further than the law requires and install the

very latest environmental protections. When she announced her plan, the chair of the

company's board of directors, Brooke, had a meeting with Connie. Brooke told Connie to

analyze the situation carefully because the cost of the additional equipment would mean no

dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that

installing all the new equipment would result in higher prices for the company's paper

produce and could bankrupt the company because of foreign competition. Brooke hinted that

Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a

minimal standard of ethics.


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85. Which of the following is the minimal standard that a business must beet in a

consideration of business ethics suggested by Brooke?

A. Decisions must be legal.

B. Decisions must meet the criteria of a follower of the WPH Framework for Business Ethics.

C. Decisions must meet the requirements of the most important stakeholders.

D. Decisions must receive a majority vote of acceptance by employees.

E. Both that decisions must be legal ad that decisions receive a majority vote of acceptance by

employees.

86. Which of the following would be a stakeholder in the above company?

A. The community only

B. The shareholders only

C. Future generations only

D. The community and shareholders only

E. The community, shareholders, and future generations

87. Connie decides to go forward with her plan to clean things up under the theory that she

wants to treat others in the same manner that she wants to be treated. Under Connie's theory,

if she did not understand the importance of the environmental improvements, she would want

them to be thrust upon her. Connie's idea is best referred to as ______.

A. The Golden Rule

B. The Disclosure Principle

C. The Help Peers Test

D. The Sarbanes-Oxley Rule

E. The Greenhouse Rule

Sally is the vice president at Big Name Cosmetics company. Through important and material

nonpublic information, she learns that the company is soon going to purchase a smaller chain

of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point.

Sally immediately buys a number of shares of her company's stock. She also tells her friend

Alice about the expected purchase of stores. Alice wanted to purchase stock in the company

but lacked the funds with which to do so. Although she did not have the funds in Bank A,

Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed

to write a check on Bank B to cover the purchase of the stock. She hoped that she would have

sufficient funds to deposit before the check was presented for payment.


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88. Which offense is Sally guilty of, if any, in purchasing stock of her company?

A. Insider trading

B. Tipping

C. Insider misappropriation

D. Extortion

E. She is guilty of no offense

89. Of which of the following, if any, is Sally guilty of by providing information to Alice

regarding the purchase?

A. She is guilty of an insider-trading violation by tipping the information.

B. She is guilty of an insider-trading violation by being tipped.

C. She is guilty of an insider-trading violation by both tipping and being tipped.

D. She is guilty of criminal extortion.

E. She is not guilty of any offense.

90. Of which of the following offenses, if any, is Alice guilty of by buying stock?

A. She is guilty of insider-trading because she tipped information.

B. She is guilty of an insider-trading violation because she traded on tipped information.

C. She is guilty of extortion.

D. She is guilty of larceny.


91. Of what offense, if any, is Alice guilty of by her method of payment?

A. Ponzi scheme

B. Insider-trading scheming

C. Pretexting

D. Check defalcation

E. Check kiting


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Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr.

Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money

by selling people a wristband that allegedly places pressure on a nerve that signals hunger

resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not

really work, people who want to lose weight and look good in their bathing suits will do

anything and that it sells like hotcakes. Slick Slim tells Dr. Fred that he will pay Dr. Fred five

dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to

patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of

the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then

proceeds to bill Medicare for office consultations he has with patients when they come in to

purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his

alimony obligations within just a few months. Unfortunately, as patients begin to see that they

are not having any weight loss, he has been receiving numerous complaints, and a friend of

his told him that he could even be facing some criminal prosecution.

92. By mailing correspondence to patients encouraging purchase of the band, which of the

following offenses, if any, did Dr. Fred commit?

A. False pretenses

B. False entry

C. Defalcation

D. Mail fraud

E. He is not guilty of any offense

93. Which of the following offenses, if any, did Dr. Fred commit when he used UPS to send

correspondence and samples of the bands to patients?

A. False pretenses

B. False entry

C. Defalcation

D. Mail fraud

E. None of the above. He is possible guilty of some state law offense, but mail fraud requires

the use of the U.S. mails.


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94. By which of the following acts, if any, did Dr. Fred commit healthcare fraud?

A. Dr. Fred did not commit any acts of healthcare fraud.

B. By the submission of false claims to Medicare only.

C. By the receipt of kick-backs from Slick Slim only.

D. By the submission of false claims to Medicare and also by the receipt of kick-backs from

Slick Slim.

E. By submitting false claims to Medicare, by receiving kick-backs from Slick Slim, and also

by merely discussing the matter with Slick Slim.

Richard, who just started at his new job as an assistant manager at a fast-food restaurant,

wants to make a good impression. He thinks that things are going great. On only the second

day on the job, however, he sees his boss Jill, the manager, slink out of the restaurant with a

big box of hamburger that she puts in her car and then speeds away. Richard is fairly certain

that she did not pay for the hamburger. Richard asks advice of his best friend, Bruce; his

girlfriend, Sally; his sister, Jenny; and his dad, Frank. Bruce says that there are no real

objective standards and that Richard should just decide what is best for himself. Sally tells

Richard to focus on the consequences. She tells him that it will do no real harm for Richard to

keep his mouth shut because the fast-food restaurant is making plenty of money and probably

does not pay the Jill enough anyway. Plus, getting in trouble with Jill could cause problems at

work, and if Richard loses his job, Richard and Sally might have to put off their marriage.

Jenny says that on balance the greatest good would be to tell on Jill because stealing does not

generally produce the greatest satisfaction. Richard's dad says that as a matter of principle, of

course, Richard should tell on Jill because stealing is simply wrong.

95. Which of the following theories most accurately fits the advice given by Bruce?

A. Deontology



D. Ethical relativism

E. Virtue ethics

96. Which of the following theories most accurately fits the advice given by Sally?

A. Deontology




E. Virtue ethics


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97. Which of the following theories most accurately fits the advice given by Jenny?

A. Deontology




E. Virtue ethics

98. Which of the following theories most accurately fits the advice given by Frank?

A. Deontology




E. Virtue ethics

Essay Questions

99. Assume you are hired as the president of a new company. Write a code of ethics for the

firm.


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100. Sally is the president of AAA Components, a company that makes small parts for the

automotive industry. Customers of AAA components are primarily auto manufacturers.

Sally's cousin, Frank, works at the company as a sales representative. A promotion to sales

manager is open. Frank has applied and so has Susan, another sales representative. While both

Frank and Susan are good employees, they are skilled in different areas. Susan is excellent

with technology, with placing orders, and she does an excellent job in following through with

order deficiencies. Frank, on the other hand, is better with customer relations, and customers

seem to like him better. Sally would like to promote Frank but she has two concerns. Her first

concern is that she does not want it to be perceived because Frank is family that she is being

unfair. Her second concern is that she has a suspicion that some customers are somewhat

prejudiced against Susan because she is female. Most customers with whom the sales

representatives deal are male, and Sally suspects that they may give Frank more consideration

than Sally. Define and discuss the WPH framework for business ethics, and within that

framework propose a solution. Be sure to fully address the populations, purposes, and

guidelines included within "W," "P," and "H."

101. List the elements necessary to establish bribery of a public official:

102. Discuss the four alternative ways to punish white-collar criminals discussed in the text.

Discuss the pros and cons of each.


2-26

103. Define the term "criminal fraud" and discuss the three elements generally involved in

establishing criminal fraud.

104. Set forth the basic belief of the following ethical principles:

(a). Ethical relativism

(b). Situational ethics

(c). Consequentialiam

(d). Deontology

(e). Virtue ethics

(f). Ethics of care

105. Milly's best friend and roommate, Sarah, is getting ready for a big date. Sarah had her

hair and nails done, bought a new dress, and spent two hours getting ready. Just as Milly sees

Sarah's date coming down the street, Sarah comes out and asks Milly how she looks.

Unfortunately, the stylish did a terrible job, the nails are an odd shade of purple, and the new

dress is extremely unflattering. Sarah has no time in which to change. Discuss what Milly

would say and why under the following principles:

(a). Deontology

(b). Act utilitarianism

(c). Rule utilitarianism

(d). Virtue ethics


2-27

106. Define virtue ethics and the ethics of care, and contrast virtue ethics with the ethics of

care.


2-28

Chapter 02 Business Ethics and White-Collar Crime Answer Key

True / False Questions

1. (p. 12) Ethical conversation is primarily about finding the one and only right thing to do.

FALSE

AACSB: Ethics Bloom's: Comprehension

Learning Objective: 2-1

Level of difficulty: Easy Topic: Business Ethics and Social Responsibility

2. (p. 13) The social responsibility of business consists only of the expectations employees have

of employers.

FALSE

AACSB: Ethics Bloom's: Knowledge


Level of difficulty: Medium Topic: Business Ethics and Social Responsibility

3. (p. 12) Business ethics is the application of ethics to the special problems and opportunities

experienced by business people.

TRUE

AACSB: Ethics

Bloom's: Knowledge


Level of difficulty: Medium

Topic: Business Ethics and Social Responsibility


2-29

4. (p. 13) In some countries businesses must pay bribes in order to receive legitimate supplies.

TRUE

AACSB: Ethics

Bloom's: Knowledge

Learning Objective: 2-1 Level of difficulty: Medium

Topic: Business Law and Business Ethics

5. (p. 15) The definition of stakeholder is the same as the definition of shareholder.

FALSE



Level of difficulty: Easy Topic: The WPH Framework for Business Ethics

6. (p. 15) The community in which a firm operates would not be considered a stakeholder of the

firm.

FALSE



Level of difficulty: Easy Topic: The WPH Framework for Business Ethics

7. (p. 15) In an ethical analysis using the WPH Framework referenced in the text, owners are the

most important stakeholders and should receive the greatest consideration in decision

making.

FALSE

AACSB: Ethics

Bloom's: Comprehension Learning Objective: 2-3


Topic: The WPH Framework for Business Ethics


2-30

8. (p. 17) The primary purpose of criminal law is to compensate a victim.

FALSE

AACSB: Reflective Thinking

Bloom's: Comprehension

Learning Objective: 2-4 Level of difficulty: Easy

Topic: Elements of a Crime

9. (p. 18) Under our criminal laws that exist today, white-collar crime is not punishable by

imprisonment.

FALSE

AACSB: Analytic Bloom's: Knowledge


Level of difficulty: Easy Topic: Elements of a Crime

10. (p. 20) Congress amended the Foreign Corrupt Practices Act to conform to the Anti-Bribery

Convention adopted by the Organization for Economic Cooperation and Development.

TRUE



Level of difficulty: Hard Topic: Specific White-Collar Crimes

11. (p. 25) In general, China punishes embezzlement less severely than the U.S.

FALSE

AACSB: Diversity



Topic: Specific White-Collar Crimes


2-31

12. (p. 27) Under the common law, a corporation could not be considered a criminal because it

was not an actual person and, thus, did not have a mind.

TRUE

AACSB: Analytic

Bloom's: Knowledge


Topic: Corporate Criminal Liability

13. (p. 27) Under current law, corporations cannot be held criminally accountable for strict-

liability offenses.

FALSE



Level of difficulty: Medium Topic: Corporate Criminal Liability

14. (p. 39) Ethical relativism is a theory of ethics that denies the existence of objective moral

standards.

TRUE



Level of difficulty: Medium Topic: Theories of Business Ethics

15. (p. 39) Situational ethics is the same thing as ethical relativism.

FALSE

AACSB: Ethics



Topic: Theories of Business Ethics


2-32

16. (p. 39) Absolutism is also referred to as ethical fundamentalism.

TRUE

AACSB: Ethics

Bloom's: Knowledge



17. (p. 39) Consequentialism provides a rigid set of rules to follow regardless of the situation.

FALSE




18. (p. 40) Rule utililtarianism tells business managers to examine all the potential actions in

each situation and choose the action that yields the greatest amount of pleasure over pain for

all involved.

FALSE




19. (p. 39) Utilitarianism is a form of consequentialism.

TRUE

AACSB: Ethics

Bloom's: Knowledge Learning Objective: 2-1




2-33

20. (p. 40) Deontology consists of acting on the basis of the recognition that certain actions are

right or wrong, regardless of their consequences.

TRUE

AACSB: Ethics

Bloom's: Knowledge



Multiple Choice Questions

21. (p. 12) Which of the following is the study and practice of decisions about what is good, or

right?

A. Morals

B. Ethics

C. Consequences

D. Law

E. Business

AACSB: Ethics



Topic: Business Ethics and Social Responsibility

22. (p. 13) A local Chamber of Commerce plans a seminar on "the social responsibility of

business." What does that term reference?

A. The responsibility of business to make profit for shareholders.

B. The responsibility of business to have annual meetings.

C. The expectations that the community imposes on firms doing business inside its borders.

D. The expectations of employees regarding wage rates.

E. The expectations of management in regard to adequate utility resources.

AACSB: Analytic Bloom's: Analysis


Level of difficulty: Medium Topic: Business Ethics and Social Responsibility


2-34

23. (p. 14) As pointed out in the text section "Business Ethics and Italian Taxes" which of the

following is true regarding the application of ethics in a global context?

A. While ethical considerations may vary, the enforcement of laws remains the same from

country to country.

B. Ethical considerations vary from country to country as do practices of law enforcement.

C. Ethical considerations do not vary from country to country although rules for law

enforcement do vary.

D. The Italian government seeks to discuss taxes after returns are filed because


E. The Italian government seeks to discuss taxes before returns are filed because


AACSB: Diversity


Learning Objective: 2-2 Level of difficulty: Hard


24. (p. 15) What do the letters "WPH" mean in reference to the "WPH Framework for Business

Ethics" discussed in the text?

A. Who, Purpose, and How

B. When, Plan, and How

C. Why, Procedure, and Hope

D. Where, Plan, and Hope

E. Where, Procedure, and How

AACSB: Ethics

Bloom's: Knowledge




2-35

25. (p. 15) Which of the following are stakeholders of a business?

A. Shareholders

B. Employees

C. Customers

D. Management

E. All the above

AACSB: Ethics




26. (p. 15) Which of the following is true under the WPH process of ethical decision making?

A. The interest of management is ranked higher than that of employees when decisions are

made.

B. The interest of owners is ranked higher than that of both employees and management when

decisions are made.

C. When decisions are made, the interest of the community as a whole is considered last.

D. The interest of management is ranked higher than that of employees when decisions are

made, but the interest of owners is ranked higher than the interest of any group.

E. None of the above are true.

AACSB: Ethics




27. (p. 15) What are some examples of purpose in the WPH process of ethical decision making?

A. Freedom

B. Security

C. Efficiency

D. Freedom and security, but not efficiency

E. Freedom, security and efficiency



Level of difficulty: Hard Topic: The WPH Framework for Business Ethics


2-36

28. (p. 15) Which of the following is a part of the "how" in the WPH process of decision

making?

A. Public disclosure

B. Customer satisfaction

C. Profit maximization

D. Whistle-blowing

E. All the above

AACSB: Ethics



Level of difficulty: Hard


29. (p. 15) Positive abstractions that capture our sense of what is good or desirable are called

______.

A. Ethical ideas

B. Values

C. Conscience demands

D. Desirable principles

E. Action goals

AACSB: Ethics




30. (p. 16) The idea that we should interact with other people in a manner consistent with the

manner in which we would like for them to interact with us is called ______.

A. The Equalization Rule

B. The Ethical Realization Rule

C. The Silver Rule

D. The Golden Rule

E. The Ten Commandments Rule



Level of difficulty: Medium Topic: The WPH Framework for Business Ethics


2-37

31. (p. 16) The "public disclosure" test for ethical behavior is sometimes referred to as the

______ test.

A. Television

B. Powell

C. Self-conscious

D. Golden

E. Primary

AACSB: Ethics

Bloom's: Knowledge




32. (p. 17) The ______ for ethical behavior seeks consideration of what the world would be like

if a decision is copied by everyone else.

A. Golden Rule

B. Universalization test

C. Public Disclosure

D. Relevant Disclosure

E. World Rule

AACSB: Ethics

Bloom's: Knowledge



33. (p. 17) Which of the following is true regarding the universalization test for ethical

behavior?

A. It is the same as the public disclosure test.

B. It has been discredited.

C. It is the same as the golden rule test.

D. It has been enacted into law by federal law.




Level of difficulty: Medium Topic: The WPH Framework for Business Ethics


2-38

34. (p. 17) Which of the following is the term that describes wrongful behavior in a criminal

action?

A. Mens rea.

B. Actus reus.

C. Res judicata.

D. Stare decisis.


AACSB: Analytic

Bloom's: Knowledge



Topic: White Collar Crime

35. (p. 17) Which of the following is a term describing the wrongful state of mind needed for a

criminal action?

A. Mens rea.

B. Actus reus.

C. Res judicata.

D. Stare decisis.


AACSB: Analytic

Bloom's: Knowledge



36. (p. 17) Strict liability is a term used to describe which of the following:

A. Liability without fault.

B. Negligence.

C. Actus reus.

D. Intentional wrongdoing.

E. Recklessness.



Level of difficulty: Easy Topic: White Collar Crime


2-39

37. (p. 17) Which of the following is an example of the imposition of strict liability?

A. A robber pulls a gun to rob a bank teller.

B. A burglar breaks into a home to steal jewelry.

C. A business sells cigarettes to a minor.

D. A minor shoplifts in a department store.

E. An adult shoplifts in a department store.

AACSB: Analytic




38. (p. 17) Which of the following is punishable by imprisonment for more than one year or

death?

A. Misdemeanor.

B. Felony.

C. Petty offenses.

D. Tort offenses.

E. Any business related crime.

AACSB: Analytic




39. (p. 17-18) Which of the following are less serious crimes punishable by fines or

imprisonment of less than one year?

A. Misdemeanor.

B. Felony.

C. Petty offenses.

D. Tort offenses.


AACSB: Analytic Bloom's: Comprehension




2-40

40. (p. 18) Which of the following are minor offenses usually punishable by a jail sentence of

less than six months or a small fine with an example being violation of a building code?

A. Insignificant offenses.

B. Felony.

C. Petty offenses.

D. Tort offenses.


AACSB: Analytic



Level of difficulty: Easy


41. (p. 20) Which of the following serves to combat bribery of foreign officials?

A. The Foreign Official Bribery Act

B. The International Bribery Prohibition Act

C. The Fair Business Act

D. The International Fair Business Practices Act

E. The Foreign Corrupt Practices Act

AACSB: Analytic

Bloom's: Knowledge



42. (p. 20) Which of the following is the making of threats for the purpose of obtaining money

or property?

A. Bribery

B. Criminal Fraud

C. Extortion

D. Both A and C

E. Importation



Level of difficulty: Medium Topic: White Collar Crime


2-41

43. (p. 21) Which of the following is the making of an entry into the books of a bank or

corporation that is designed to represent the existence of funds that do not exist?

A. False entries

B. Defalcation

C. False pretenses

D. Ponzi scheme

E. Pretexting

AACSB: Analytic



Level of difficulty: Difficult


44. (p. 21) Which of the following is a false document or sign of existence used to perpetrate

fraud, such as making counterfeit money?

A. False entries

B. False token

C. False pretenses

D. Ponzi scheme

E. Pretexting

AACSB: Analytic


Learning Objective: 2-5 Level of difficulty: Difficult


45. (p. 17) Which of the following is the misappropriation of trust funds or money held in a

fiduciary capacity?

A. False entries

B. Defalcation

C. False pretenses

D. Ponzi scheme

E. Pretexting



Level of difficulty: Difficult Topic: White Collar Crime


2-42

46. (p. 17) Which of the following is an investment swindle in which high profits are promised

from fictitious sources and early investors are paid off with funds raised from later investors?

A. False entries

B. False token

C. False pretenses

D. Ponzi scheme

E. Pretexting

AACSB: Analytic



Level of difficulty: Difficult


47. (p. 21) Zack, the president of ABC Company, falsified documents to make it appear as if he

had been granted stock options on certain dates, and he selected the dates after the fact,

picking dates on which the stock price was low. Which of the following offenses, if any, did

he commit?

A. Insider trading

B. Pretexting

C. Defalcation

D. Stock option back-dating

E. He did not commit any offense

AACSB: Analytic

Bloom's: Analysis




2-43

48. (p. 21-22) Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he

is simply taking money for subscriptions and has absolutely no intention of ever arranging for

the provision of magazines. Which of the following offenses, if any, has he committed?

A. Defalcation

B. False entry

C. False token

D. False pretenses

E. Ponzi scheme

AACSB: Analytic

Bloom's: Analysis



49. (p. 23) Which of the following is using fraudulent means to obtain information about

someone's phone use?

A. Pretexting

B. Ponzi scheme

C. False pretenses

D. False token

E. Defalcation

AACSB: Analytic

Bloom's: Analysis



50. (p. 23) Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank

account. Instead of placing the money into the customer's account, Ben puts it into his pocket.

Which of the following offenses has he committed?

A. Forgery

B. False entries

C. False token

D. Embezzlement

E. Both false token and embezzlement

AACSB: Analytic Bloom's: Analysis




2-44

51. (p. 25) Which of the following is a person who illegally accesses or enters another person's

or a company's computer system to obtain information or to steal money?

A. Backer

B. Reacher

C. Hacker

D. Trespasser

E. Illicit user

AACSB: Technology

Bloom's: Knowledge


Level of difficulty: Easy


52. (p. 27) Which of the following is true regarding corporate executives being held personally

liable for business crime?

A. Corporate executives may never be held personally liable for a business crime.

B. Corporate executives may only be held personally liable for a business crime if they

benefited personally from their actions in executing the business crime.

C. Corporate executives may be found personally liable for a business crime regardless of

whether the business crime was committed for personal benefit or for the benefit of the

corporation.

D. A court may not assess criminal liability on a corporate executive unless the executive

directly engaged in the specific criminal violation.

E. Criminal liability may not be assessed against a corporate executive unless the executive

directly engaged in the criminal activity and also profited directly and personally from the

criminal activity

AACSB: Analytic



Topic: Corporate Criminal Liability


2-45

53. (p. 29) Which amendment provides the right to a speedy and public trial?

A. The Second Amendment.

B. The Third Amendment.

C. The Fourth Amendment.

D. The Fifth Amendment.

E. The Sixth Amendment.

AACSB: Analytic



Topic: Criminal Procedure

54. (p. 29) Which of the following is true regarding the Fourteenth Amendment?

A. It is part of the Bill of Rights.

B. Its safeguards only apply at the federal level.

C. It extends most constitutional rights to defendants at the state level.

D. It is a part of the Bill of Rights, its protections apply at the federal level, and its protections

also apply at the state level.

E. It is not a part of the Bill of Rights, and its protections apply only at the federal level.

AACSB: Analytic




55. (p. 29) Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate

that there is ________ that a suspect committed or is planning to commit a crime.

A. Likely cause

B. Suspected cause

C. Certainty

D. Probable cause

E. Information



Level of difficulty: Easy Topic: Criminal Procedure


2-46

56. (p. 29) Of which of the following must a defendant be informed before questioning?

A. That the defendant must answer questions or there will be a presumption of guilt at trial.

B. That statements made to law enforcement before arraignment may not be used against the

defendant in court.

C. That the defendant has the right to consult an attorney before speaking to the police.

D. That unless the defendant can afford any attorney, the defendant will not have an attorney.

E. That the right to an attorney does not begin until after the defendant is arraigned.

AACSB: Analytic

Bloom's: Knowledge




57. (p. 30) Which of the following occurs when a defendant makes a first appearance?

A. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest.

B. A magistrate determines whether there was probable cause for the arrest.

C. A magistrate determines whether the defendant was properly booked.

D. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest

and also whether the defendant was properly booked.


AACSB: Analytic

Bloom's: Knowledge



58. (p. 30) Which of the following is a plea in which the defendant does not admit guilty but

agrees not to contest the charges?

A. Petit defense.

B. Information.

C. Nolo contendere.

D. Sine qua non.

E. Plea avoidance.



Level of difficulty: Medium Topic: Criminal Procedure


2-47

59. (p. 31) A judge reports that a jury was "hung". What does the judge mean?

A. That the jury wanted to hang the defendant by imposing a heavy sentence.

B. That the jury wanted to hang the prosecutor for unjustly charging the defendant.

C. That the jury could not reach a decision.

D. That the jury had waited an excessive amount of time before reaching a verdict.

E. That the jury had waited an excessive amount of time before retiring for the evening.

AACSB: Analytic

Bloom's: Knowledge



60. (p. 32) Which of the following is a federal law that has been somewhat successful in the

battle against business-related crimes?




D. All of the above.


AACSB: Analytic



Topic: Tools for Fighting Business Crime

61. (p. 32) Which of the following was created specifically to combat white-collar crime?




D. The White-Collar Enforcement Act.




Level of difficulty: Hard Topic: Tools for Fighting Business Crime


2-48

62. (p. 32) Courts have defined a pattern of racketeering under RICO as more than _______

action[s].

A. One

B. Two

C. Three

D. Four

E. None of the above. There is no requirement of more than one action

AACSB: Analytic





63. (p. 33) Carla learns that her employer, a healthcare facility, is committing fraud against the

government by filing false Medicare claims. Under which of the following might she obtain a

portion of any recovery obtained by the government?

A. RICO.





AACSB: Analytic

Bloom's: Analysis



64. (p. 34) Which of the following was passed largely in response to business scandals of the

2000's, such as Enron?

A. RICO.







Level of difficulty: Medium Topic: Tools for Fighting Business Crime


2-49

65. (p. 34) Under the Sarbanes-Oxley Act of 2002, it is a felony for an auditor to willfully fail to

maintain proper records of audits and work papers for at least _____ years.

A. Two

B. Three

C. Four

D. Five

E. Ten

AACSB: Analytic

Bloom's: Knowledge




66. (p. 39) The ethical theory that requires that we evaluate the morality of an action by

imagining ourselves in the position of the person facing the ethical dilemma is called ______.

A. Situational ethics


C. Absolutism

D. Consequentialism

E. Relativity ethics

AACSB: Ethics

Bloom's: Knowledge



67. (p. 39) How is absolutism different from ethical relativism and situational ethics?

A. It applies utilitarianism.

B. It holds that a cost-benefit analysis should be applied.

C. It holds that whether an action is moral does not depend on the perspective of the person

facing the ethical dilemma.

D. It applies virtue ethics.

E. It applies corporate ethics principles.





2-50

68. (p. 39) Which of the following describes the theory of ethical relativism?

A. Its only principle is the denial of the existence of objective moral standards.

B. It holds that individuals must evaluate actions on the basis of what they feel is best for

themselves based upon objective moral standards.

C. It holds that since morality is relative, we have a basis upon which to criticize the behavior

of others as immoral.

D. It denies the existence of objective moral standards, it holds that individuals must evaluate

actions on the basis of what they feel is best for themselves, but it does not hold that morality

is relative.

E. It denies the existence of objective moral standards; it holds that individuals must evaluate

actions on the basis of what they feel is best for themselves; and it holds that since morality is

relative, no one can criticize another's behavior as immoral.

AACSB: Ethics

Bloom's: Knowledge



69. (p. 39) What is another name for absolutism?

A. Ethical fundamentalism


C. Virtue ethics

D. Rule utilitarianism

E. Ethics of care

AACSB: Ethics

Bloom's: Knowledge




2-51

70. (p. 39-40) Which of the following is an ethical school of thought that denies the existence of

objective moral standards?

A. Absolutism

B. Deontology

C. Categorical Imperative

D. Uncertainty of Thought


AACSB: Ethics

Bloom's: Knowledge




71. (p. 39) Which of the following is true under the ethical theory of absolutism?

A. It requires that individuals defer to a set of rules to guide them and holds that all rational

individuals will agree on the appropriate set of rules to follow.

B. It requires that all individuals decide for themselves what is ethical depending on the

circumstances.

C. It requires that all individuals in a community agree on an appropriate set of ethical rules,

but recognizes that individuals outside the community may have a different set of ethical

rules.

D. It holds that individuals should decide ethical principles based on their upbringing but not

upon the situation itself.

E. It requires that individuals defer to a set of rules to guide them but recognizes that people

may disagree about which rules to follow.

AACSB: Ethics





2-52

72. (p. 39) What is the basis of consequentialism?

A. Deontology

B. Categorical imperatives

C. Inquiry into the consequences

D. Disregard of consequences

E. Act utilitarianism

AACSB: Ethics

Bloom's: Knowledge



73. (p. 40) Kantian ethics is involved with which of the following ethical theories?

A. Deontology



D. Absolutism

E. Situational ethics

AACSB: Ethics

Bloom's: Knowledge



74. (p. 40) What is a difficulty with the application of virtue ethics?

A. The applicable categorical imperatives.

B. The lack of agreement about the meaning of "the good life."

C. The applicable principle of rights.

D. The ethics of care analysis.

E. Both the applicable categorical imperatives and the lack of agreement about the meaning of

"the good life."





2-53

75. (p. 41-42) ______ adherents believe that when one individual, the caregiver, meets the needs

of one other person, the cared-for party, the caregiver is helping to meet the needs of all the

individuals who fall within the cared-for party's web of care.

A. Deontology

B. Utilitarianism

C. Absolutism

D. Virtue ethics

E. Ethics of care

AACSB: Ethics

Bloom's: Knowledge



76. (p. 39-40) An ethical theory that urges managers to take those actions that provide the greatest

pleasure after having subtracted the pain or harm associated with the action is question is

called _____.

A. Deontology

B. Utilitarianism

C. Kantian ethics

D. Absolutism

E. Ethical relativism

AACSB: Ethics

Bloom's: Knowledge




2-54

77. (p. 40) A business manager who deceives everyone because the manager believes the

deception maximizes pleasure over pain in a given situation is acting consistently with which

ethical theory?

A. Act deontology





AACSB: Ethics

Bloom's: Evaluation



78. (p. 40) A business manager who considers it wrong to terminate a person whose spouse has

terminal cancer because a firm has an obligation to support its employees when they are

vulnerable is acting consistently with which ethical theory?

A. Deontology





AACSB: Ethics

Bloom's: Evaluation



79. (p. 39) Which of the following theories is a form of consequentialism?

A. Deontology


C. Utilitarianism





Level of difficulty: Hard Topic: Theories of Business Ethics


2-55

80. (p. 40) A reference to "Kantian ethics" most likely involves which of the following

theories?

A. Deontology


C. Utilitarianism



AACSB: Ethics





81. (p. 40) A person who believes that they should not cheat on a drug test because if everyone

did so, the drug test would be meaningless is applying a[n] ______.

A. Ethics of care

B. Virtual analysis

C. Cost-benefit analysis



AACSB: Ethics




82. (p. 41) Which of the following helps explain why the principle of deontology may be

difficult to apply?

A. People disagree about what duties we owe to one another.

B. People disagree about whether consequences are positive or negative.

C. People disagree about the ethics of care.

D. People disagree about what duties we owe to one another and also people disagree about

whether consequences are positive or negative.

E. People disagree about what duties we owe to one another, people disagree about whether

consequences are positive or negative, and also people disagree about the ethics of care.





2-56

83. (p. 41) The ethical system in which the development of virtues, or positive character trains

such as courage, justice, and truthfulness, is the basis for morality is called ______.

A. Absolutism decision

B. Virtual analysis

C. Virtue ethics



AACSB: Ethics

Bloom's: Knowledge




84. (p. 41) The ______ holds that the right course of action is the option most consistent with the

building and maintaining of human relationships.

A. Ethics of Care

B. Principle of virtue ethics

C. Deontology

D. Act utilitarianism


AACSB: Ethics

Bloom's: Knowledge




2-57

Connie, the president of a company that makes paper, has a new interest in the environment.

She recently went to a seminar on environmental dangers and has decided to take steps to

clean things up. She started at home and has now felt compelled to change things at work.

Connie had to face the fact that her company has been cheating and is not in compliance with

applicable environmental regulations due to dumping in the nearby river. Her company has

never been cited, however, because it employs a very large number of people in the

community, including the mayor's wife and the chief-of-police's brother. On her mission to

clean things up, Connie has decided to go even further than the law requires and install the

very latest environmental protections. When she announced her plan, the chair of the

company's board of directors, Brooke, had a meeting with Connie. Brooke told Connie to

analyze the situation carefully because the cost of the additional equipment would mean no

dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that

installing all the new equipment would result in higher prices for the company's paper

produce and could bankrupt the company because of foreign competition. Brooke hinted that

Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a

minimal standard of ethics.

85. (p. 13) Which of the following is the minimal standard that a business must beet in a

consideration of business ethics suggested by Brooke?

A. Decisions must be legal.

B. Decisions must meet the criteria of a follower of the WPH Framework for Business Ethics.

C. Decisions must meet the requirements of the most important stakeholders.

D. Decisions must receive a majority vote of acceptance by employees.

E. Both that decisions must be legal ad that decisions receive a majority vote of acceptance by

employees.

AACSB: Ethics

Bloom's: Knowledge Learning Objective: 2-2




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86. (p. 15) Which of the following would be a stakeholder in the above company?

A. The community only

B. The shareholders only

C. Future generations only

D. The community and shareholders only

E. The community, shareholders, and future generations

AACSB: Ethics




87. (p. 16) Connie decides to go forward with her plan to clean things up under the theory that

she wants to treat others in the same manner that she wants to be treated. Under Connie's

theory, if she did not understand the importance of the environmental improvements, she

would want them to be thrust upon her. Connie's idea is best referred to as ______.

A. The Golden Rule

B. The Disclosure Principle

C. The Help Peers Test

D. The Sarbanes-Oxley Rule

E. The Greenhouse Rule

AACSB: Ethics

Bloom's: Analysis



Sally is the vice president at Big Name Cosmetics company. Through important and material

nonpublic information, she learns that the company is soon going to purchase a smaller chain

of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point.

Sally immediately buys a number of shares of her company's stock. She also tells her friend

Alice about the expected purchase of stores. Alice wanted to purchase stock in the company

but lacked the funds with which to do so. Although she did not have the funds in Bank A,

Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed

to write a check on Bank B to cover the purchase of the stock. She hoped that she would have

sufficient funds to deposit before the check was presented for payment.


2-59

88. (p. 20) Which offense is Sally guilty of, if any, in purchasing stock of her company?

A. Insider trading

B. Tipping

C. Insider misappropriation

D. Extortion

E. She is guilty of no offense

AACSB: Analytic

Bloom's: Evaluation



89. (p. 20) Of which of the following, if any, is Sally guilty of by providing information to Alice

regarding the purchase?

A. She is guilty of an insider-trading violation by tipping the information.

B. She is guilty of an insider-trading violation by being tipped.

C. She is guilty of an insider-trading violation by both tipping and being tipped.

D. She is guilty of criminal extortion.


AACSB: Analytic

Bloom's: Evaluation



90. (p. 20) Of which of the following offenses, if any, is Alice guilty of by buying stock?

A. She is guilty of insider-trading because she tipped information.

B. She is guilty of an insider-trading violation because she traded on tipped information.

C. She is guilty of extortion.

D. She is guilty of larceny.


AACSB: Analytic Bloom's: Evaluation


Level of difficulty: Medium Topic: Specific White-Collar Crimes


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91. (p. 21) Of what offense, if any, is Alice guilty of by her method of payment?

A. Ponzi scheme

B. Insider-trading scheming

C. Pretexting

D. Check defalcation

E. Check kiting

AACSB: Analytic

Bloom's: Evaluation



Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr.

Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money

by selling people a wristband that allegedly places pressure on a nerve that signals hunger

resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not

really work, people who want to lose weight and look good in their bathing suits will do

anything and that it sells like hotcakes. Slick Slim tells Dr. Fred that he will pay Dr. Fred five

dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to

patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of

the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then

proceeds to bill Medicare for office consultations he has with patients when they come in to

purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his

alimony obligations within just a few months. Unfortunately, as patients begin to see that they

are not having any weight loss, he has been receiving numerous complaints, and a friend of

his told him that he could even be facing some criminal prosecution.

92. (p. 22) By mailing correspondence to patients encouraging purchase of the band, which of

the following offenses, if any, did Dr. Fred commit?

A. False pretenses

B. False entry

C. Defalcation

D. Mail fraud

E. He is not guilty of any offense


Bloom's: Analysis




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93. (p. 23) Which of the following offenses, if any, did Dr. Fred commit when he used UPS to

send correspondence and samples of the bands to patients?

A. False pretenses

B. False entry

C. Defalcation

D. Mail fraud

E. None of the above. He is possible guilty of some state law offense, but mail fraud requires

the use of the U.S. mails.


Bloom's: Analysis



94. (p. 23) By which of the following acts, if any, did Dr. Fred commit healthcare fraud?

A. Dr. Fred did not commit any acts of healthcare fraud.

B. By the submission of false claims to Medicare only.

C. By the receipt of kick-backs from Slick Slim only.

D. By the submission of false claims to Medicare and also by the receipt of kick-backs from

Slick Slim.

E. By submitting false claims to Medicare, by receiving kick-backs from Slick Slim, and also

by merely discussing the matter with Slick Slim.


Bloom's: Analysis




2-62

Richard, who just started at his new job as an assistant manager at a fast-food restaurant,

wants to make a good impression. He thinks that things are going great. On only the second

day on the job, however, he sees his boss Jill, the manager, slink out of the restaurant with a

big box of hamburger that she puts in her car and then speeds away. Richard is fairly certain

that she did not pay for the hamburger. Richard asks advice of his best friend, Bruce; his

girlfriend, Sally; his sister, Jenny; and his dad, Frank. Bruce says that there are no real

objective standards and that Richard should just decide what is best for himself. Sally tells

Richard to focus on the consequences. She tells him that it will do no real harm for Richard to

keep his mouth shut because the fast-food restaurant is making plenty of money and probably

does not pay the Jill enough anyway. Plus, getting in trouble with Jill could cause problems at

work, and if Richard loses his job, Richard and Sally might have to put off their marriage.

Jenny says that on balance the greatest good would be to tell on Jill because stealing does not

generally produce the greatest satisfaction. Richard's dad says that as a matter of principle, of

course, Richard should tell on Jill because stealing is simply wrong.

95. (p. 39) Which of the following theories most accurately fits the advice given by Bruce?

A. Deontology




E. Virtue ethics

AACSB: Ethics

Bloom's: Evaluation



96. (p. 40) Which of the following theories most accurately fits the advice given by Sally?

A. Deontology




E. Virtue ethics

AACSB: Ethics

Bloom's: Evaluation




2-63

97. (p. 40) Which of the following theories most accurately fits the advice given by Jenny?

A. Deontology




E. Virtue ethics

AACSB: Ethics

Bloom's: Evaluation



98. (p. 40) Which of the following theories most accurately fits the advice given by Frank?

A. Deontology




E. Virtue ethics

AACSB: Ethics

Bloom's: Evaluation



Essay Questions

99. (p. 14) Assume you are hired as the president of a new company. Write a code of ethics for

the firm.

Student responses may vary. The General Motors' Code of Business Conduct may serve as a

guide.

AACSB: Ethics Bloom's: Synthesis


Level of difficulty: Hard Topic: Business Law and Business Ethics


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100. (p. 15) Sally is the president of AAA Components, a company that makes small parts for

the automotive industry. Customers of AAA components are primarily auto manufacturers.

Sally's cousin, Frank, works at the company as a sales representative. A promotion to sales

manager is open. Frank has applied and so has Susan, another sales representative. While both

Frank and Susan are good employees, they are skilled in different areas. Susan is excellent

with technology, with placing orders, and she does an excellent job in following through with

order deficiencies. Frank, on the other hand, is better with customer relations, and customers

seem to like him better. Sally would like to promote Frank but she has two concerns. Her first

concern is that she does not want it to be perceived because Frank is family that she is being

unfair. Her second concern is that she has a suspicion that some customers are somewhat

prejudiced against Susan because she is female. Most customers with whom the sales

representatives deal are male, and Sally suspects that they may give Frank more consideration

than Sally. Define and discuss the WPH framework for business ethics, and within that

framework propose a solution. Be sure to fully address the populations, purposes, and

guidelines included within "W," "P," and "H."

Students should reference the WPH process of decision making by identifying stakeholders,

values, and guidelines. Students should also propose a solution. Solutions may vary.

AACSB: Ethics

Bloom's: Evaluation Learning Objective: 2-3



101. (p. 18) List the elements necessary to establish bribery of a public official:

In order to establish bribery of a public official, the government must show the following

three elements: (1) Something of value is offered, given, or promised to (2) to a federal public

official with (3) intent to influence that person's judgment or conduct.

AACSB: Analytic

Bloom's: Knowledge





2-65

102. (p. 18) Discuss the four alternative ways to punish white-collar criminals discussed in the

text. Discuss the pros and cons of each.

The four alternative ways to punish white-collar criminals are confinement, community

service, disqualification from employment, and house arrest. Students will vary on discussion

of pros and cons of various types of punishment.

AACSB: Analytic

Bloom's: Evaluation


Topic: Classification of Crimes

103. (p. 20) Define the term "criminal fraud" and discuss the three elements generally involved

in establishing criminal fraud.

Criminal fraud encompasses a variety of means by which an individual intentionally uses

some sort of misrepresentation to gain an advantage over another person. The three elements

generally required are as follows: (1) A material false representation made with intent to

deceive; (2) A victim's reasonable reliance upon the false representation; and, (3) Damages.

AACSB: Analytic

Bloom's: Knowledge




2-66

104. (p. 39-41) Set forth the basic belief of the following ethical principles:

(a). Ethical relativism

(b). Situational ethics

(c). Consequentialiam

(d). Deontology

(e). Virtue ethics

(f). Ethics of care

(a). Ethical relativism - Asserts that morality is relative.

(b). Situational ethics - Requires that when we evaluate whether an action is ethical, we

imagine ourselves in the position of the person facing an ethical dilemma.

(c). Consequentialiasm - Considers the consequences (i.e., harms and benefits) of making a

particular decision.

(d). Deontology - Recognizes certain actions as right or wrong regardless of the

consequences.

(e). Virtue ethics - encourages individuals to develop virtues (e.g. courage and truthfulness)

that guide behavior.

(f). Ethics of care - Holds that ethical behavior is determined by actions that care for and

maintain human relationships.

AACSB: Ethics





2-67

105. (p. 39-41) Milly's best friend and roommate, Sarah, is getting ready for a big date. Sarah had

her hair and nails done, bought a new dress, and spent two hours getting ready. Just as Milly

sees Sarah's date coming down the street, Sarah comes out and asks Milly how she looks.

Unfortunately, the stylish did a terrible job, the nails are an odd shade of purple, and the new

dress is extremely unflattering. Sarah has no time in which to change. Discuss what Milly

would say and why under the following principles:

(a). Deontology

(b). Act utilitarianism

(c). Rule utilitarianism

(d). Virtue ethics

Student answers will likely vary based upon the application of the facts to the ethical

principles involved. Following are suggestions:

(a). Under the principle of deontology, which consists of acting on the basis of the recognition

that certain actions are right or wrong regardless of consequences, students will likely say that

Sarah should be told the truth.

(b). Act utilitarianism says that the action that yields the greatest amount of pleasure over pain

for all involved should be chosen. Under this principle, Sarah would likely be told that she

looks fine.

(c). Rule utilitarianism holds that general rules that on balance produce the greatest amount of

pleasure for all involved should be followed in each situation. Students may say that

deception does not generally produce the greatest satisfaction.

(d). Virtue ethics is an ethical system in which the development of virtues or positive

character traits is the basis for morality. Students may say that it is virtuous to tell the truth, or

some may say that it is more virtuous to spare Sarah's feelings.

AACSB: Ethics

Bloom's: Evaluation Learning Objective: 2-1




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106. (p. 41-42) Define virtue ethics and the ethics of care, and contrast virtue ethics with the

ethics of care.

Virtue ethics is an ethical system in which the development of virtues, or positive character

traits, is the basis for morality. Under this theory, the development of virtues occurs through

practice. The ethics of care holds that the right course of action is the option most consistent

with the building and maintaining of human relationships. According to this theory, when one

person cares for another person, the first person is acting morally.

AACSB: Ethics




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Full file at ://fratstock.eu/sample/Test-Bank-Dynamic-Business... · 2017. 5. 8. · 24. What do the letters "WPH" mean in reference to the "WPH Framework for Business Ethics" discussed