Exam 2: Cognitive Processes and Ethical Decision Making in Accounting

What should be the first step in decision making when faced with an ethical dilemma?

In his evaluation of Kidder's model,Johnson points out that:

Cynthia Cooper's actions in the WorldCom case can be best characterized as demonstrating:

The ethical conflict Alex is facing in the FDA Liability Concerns can be best characterized as:

Which of the following might NOT describe Heinz's thought process in deciding whether to steal the drug if he were at stage 6?

Thomas Jones's research looked at the characteristics of a moral issue to develop the moral intensity model.The model includes six dimensions.Which of the following are NOT included in those dimensions?

Steve is in charge of accounting for the purchase of equipment at Cal Works,Inc.The company has a policy that all expenditures greater than $1,000 (1% of total expenditures) have to be capitalized; less than $1,000 expensed.Steve is under pressure to report high earnings.He takes one $600 and $900 expenditure,adds them together,and records a capital expenditure for $1,500.Which of the following reasons and rationalizations might Steve use for his action:

In stage 5 of Kohlberg's model,ethical reasoning is motivated by:

The ethical dilemma for Ricardo in the Juggyfroot case can best be described as:

In stage 1 of Kohlberg's model,ethical reasoning is motivated by:

Kevin Lowe is depressed.He has been with the CPA firm Stooges LLP for only three months.Yet the partners in charge of the firm-Bo Chambers and his brother,Moe-have asked for a "sit-down." Here's how it goes: "Kevin,we asked to see you because your time reports indicate that it takes you 50 percent longer to complete audit work than your predecessor," Moe said. "Well,I am new and still learning on the job," replied Lowe. "That's true," Bo responded,"but you have to appreciate that we have fixed budgets for these audits.Every hour over the budgeted time costs us money.While we can handle it in the short run,we will have to bill the clients whose audit you work on a larger fee in the future.We don't want to lose clients as a result." "Are you asking me to cut down on the work I do?" Lowe asked. "We would never compromise the quality of our audit work," Moe said."We're trying to figure out why it takes you so much longer than other staff members." At this point,Lowe started to perspire.He wiped his forehead,took a glass of water,and asked,"Would it be better if I took some of the work home at night and on weekends,completed it,but didn't charge the firm or the client for my time?" Bo and Moe were surprised by Kevin's openness.On one hand,they valued that trait in their employees.On the other hand,they couldn't answer with a yes.Moe looked at Bo,and then turned to Kevin and said,"It's up to you to decide how to increase your productivity on audits.As you know,this is an important element of performance evaluation." Kevin cringed.Was the handwriting on the wall in terms of his future with the firm? "I understand what you're saying," Kevin said."I will do better in the future-I promise." "Good," responded Bo and Moe."Let's meet 30 days from now and we'll discuss your progress on the matters we've discussed today and your future with the firm." In an effort to deal with the problem,Kevin contacts Joyce,a friend and fellow employee,and asks if she has faced similar problems.Joyce answers "yes" and goes on to explain she handles it by "ghost-ticking." Kevin asks her to explain. "Ghost-ticking is when we document audit procedures that have not been completed." Kevin,dumbfounded,wonders,what kind of a firm am I working for? After much consideration Kevin asks for a meeting with Bo and Moe within week.Kevin does not want to take work home and off the clock.He wants the meeting to convince Bo and Moe that having auditors work off the clock and at home is not in the best interest of the firm and its mission to do independent audits with integrity,objectivity,and due professional care. Required: Analyze the case using GVV. •What are the main arguments Kevin is trying to counter? What are the reasons and rationalizations Kevin needs to address? •What is at stake for the key parties? •What levers can Kevin can use to influence Bo and Moe? •What is the most powerful and persuasive response to the reasons and rationalizations Kevin needs to address? To whom and when?

Explain how virtue interacts with moral development in Thorne's Integrated Model of Ethical Decision-making.

As an executive in a mid-sized manufacturing firm,Cal finds himself thrown together with Harry,who works for a division of the firm that Cal supervises.He and Harry are in the same community; their children are in the same schools; they often show up at the same social functions; and they play golf together fairly frequently. One day,to Cal's deep dismay,he hears that Harry has been implicated in some financial irregularities at work.The issues while serious leave some room for doubt.There is reason to think Harry got ensnared by regulations,though he may have afterwards tried to cover up that entanglement by being less than forthright.Yet after what Cal observes to be a careful audit and investigation,Harry is let go from his job. Harry comes to Cal and asks for a letter of recommendation. What should Cal do? What are the consequences of the options?

In the Gateway Hospital case,Kristen's best argument to counter the reasons and rationalizations Troy might give for requesting an extra days' reimbursement is?

What ethical action should Daniel take in A Faulty Budget?

Individuals who reason at stage 6 incorporate ethical reasoning based on:

In the LinkedIn and Shut Out case,Kenny:

The ethical domain in accounting and auditing refers to:

Which of the following characteristics is NOT part of the behavioral approach,Giving Voice to Values?

Rosie is the external auditor of Texas Two Steps,a privately-owned dance company in Texas.Rosie believes the owner of the company is skimming cash off the top.She approaches the owner who explains that the money will be replaced in the following month after he refinances his house.Rosie accepts the owner's explanation but reclassifies the expenditure as a receivable of the company from the owner.Rosie's reasoning best reflects: