Deck 8: Ethics Reporting Systems

Question 1

Samir is a long-term manager at his financial services firm. Although friendly in person, his style of leadership could best be described as authoritarian. What trait is Samir most likely to value and expect from his employees?

A) loyalty
B) efficiency
C) honesty
D) good social skills

Answer 1

A

Question 2

According to ERC research, what is the primary factor that determines whether employees report or do not report misconduct?

A) whether managers took or would take corrective action
B) level of expected retaliation
C) the presence of an ethics reporting system
D) the company's public image

Answer 2

A

Question 3

What effect has the False Claims Act had on ethical claims among organizations in the United States?

A) It has had no discernible effect.
B) It has largely taken the place of internal ethics reporting systems.
C) It has resulted in billions of dollars in civil fraud settlements and judgments against corporations.
D) It has reduced the number of ethical claims made within corporations.

Answer 3

C

Question 4

Most employees at a medium-sized law firm choose not to report abuses because they hold a "nothing will get done about it" belief. What most likely led to the development of this belief?

A) Employees fear retaliation for reporting.
B) Employees have a bias about the legal profession and its reputation for corruption.
C) Managers failed to act on previous incidences.
D) Managers have told employees not to bother reporting.

Question 5

According to ERC respondents, the most common form of retaliation experienced by those who reported misconduct came in the form of ______.

A) lost pay or bonuses
B) lost job
C) abuse by coworkers
D) altered treatment by managers

Question 6

Which of the following statements about ethics reporting and organizations is accurate?

A) Employees report ethical abuses much more often to government authorities or the media than to internal managers or HR departments.
B) Company legal officers report more worry over ethics and compliance issues than anything else.
C) Most companies have very adequate reporting systems for ethics abuses.
D) Investors are generally well-shielded from the effects of ethics abuses within a company.

Question 7

When an employee comes to his manager, Samir, and says that he has a problem, Samir says, "Bring me solutions, not problems." In what unintended consequence is this likely to result?

A) A solution to the problem will appear quickly, but it may not be the optimal one.
B) If the problem is important, it will take longer to be reported and resolved.
C) The employee will go to the ethics manager for the company instead.
D) The employee will reach out to a government whistleblower system to talk about the issue.

Question 8

Shana has just arrived at a new company as an entry-level employee; it is her first professional job out of college. What is likely to be the biggest influence on her likelihood of reporting a witnessed incidence of misconduct?

A) the nature of the profession
B) the company's reporting structure/policy
C) habit formed from a lifetime of influences
D) whether she has an external or internal locus of control

Question 9

What is a specific benefit of having an ethics assist line?

A) It gives companies legal cover for ethics abuses.
B) It proactively reaches out to employees about ethics issues.
C) It allows anonymous reporting of ethics issues.
D) It provides a communication for religious issues specifically.

Question 10

In an authoritarian work culture, what is the safest course of action for an employee to take with respect to witnessed ethical issues?

A) Be silent.
B) Go over the manager's head and talk to executive leadership.
C) Speak to same-level employees about the issue before speaking to a manager.
D) Go to the HR department to report abuses.

Question 11

How does the text define "employee empowerment"?

A) employees possessing the authority to make decisions affecting themselves and their work
B) employees having the confidence to report violations by coworkers
C) employees feeling like they can speak honestly with managers and not fear retaliation
D) employees possessing the power to report anonymously about ethical misconduct

Question 12

Which of the following is TRUE of how employees respond to ethical issues and moral dilemmas?

A) The higher an employee is in the hierarchy, the more morally compromised the employee is likely to be.
B) Employees are more likely to report issues of high moral intensity.
C) Employees who lack moral courage will report if the right reporting systems are in place.
D) The higher an employee is in the hierarchy, the less likely the employee is to report misconduct.

Question 13

As described by business ethicist Archie Carroll, an amoral manager ______.

A) deliberately tries to separate ethics and business operations
B) does not understand ethics and often ignores ethical problems
C) is deliberately unethical to employees and coworkers
D) tries to encourage ethical behavior among employees but is not proactive about it

Question 14

Research by the Ethics Research Center showed that the most commonly observed misconduct in organizations is ______.

A) abusive or hostile work environment behavior
B) theft
C) racially-motivated discrimination
D) inappropriate Internet use

Question 15

Sheila has witnessed an incidence of ethical misconduct and can only internally frame it in terms of anticipated negative outcomes. What kind of question is she probably asking herself?

A) Is speaking out the right thing to do?
B) Is speaking out worth it?
C) How much harm is the incident causing to the victim?
D) What would I do if this happened to me?

Question 16

What is a major unstated cost of unethical behavior within organizations?

A) the loss of valuable employees
B) the effects of low morale
C) the cost of employing lawyers to defend the organization
D) the costs of implementing new ethics reporting systems

Question 17

What is "employee silence"?

A) A company's culture frowns on any admission of or appearance of talk about unethical conduct.
B) Employees at a company have an unspoken agreement not to speak about unethical behavior with managers.
C) An employee who has suffered from unethical treatment by another refuses to report the incident.
D) An employee witnesses ethical misconduct but discusses it with no one involved or with authority to address it.

Question 18

Harun speaks out to HR about an incidence of misconduct he witnessed and is labeled a "squealer" by coworkers. He regrets reporting the incident primarily because of ______.

A) retaliation
B) poor reporting systems
C) the lack of effect his reporting has
D) the reduced efficiency it causes in his job

Question 19

What benefit does having an anonymous reporting system confer that a simple reporting system beyond the chain of command may not?

A) a greater commitment to loyalty
B) freedom from retaliation
C) an ability to sidestep a direct supervisor
D) the ability to report on coworkers

Question 20

Karen is a newly promoted manager of a large department at her company. She is worried about what ethical problems may or may not be happening there. On who or what will she primarily rely for information about ethics problems in her department?

A) her HR department liaison
B) her own careful monitoring of employee behavior
C) ethics issue metrics set up by previous managers
D) her employees' voluntary reporting

Question 21

Why would the ERC say that "whistleblowers" and "reporters" are the same thing?

A) A whistleblower likely first tried to report an incident internally.
B) They are both trying to report an ethics violation in different venues.
C) Generally, they are both low-level employees.
D) Generally, they are both people of high moral courage.

Question 22

Which of the following statements about ECO duties is accurate?

A) The ECO should not be the one to inform employees of outcomes into ethical issues.
B) The ECO should almost always be the first person an employee goes to address an ethical issue.
C) The nature and scope of ECO activities should be standardized across companies.
D) ECOs should give different levels of attention to ethical issues based on relative importance.

Question 23

How should a manager first respond to an admission of ethical misconduct from an employee?

A) Express disappointment but without accusation.
B) Express surprise or wonder.
C) Explain the harshest penalties for such an action.
D) Express regret that the employee has done this.

Question 24

Which of the following scenarios is a good example of the proper implementation of a manager's open-door policy?

A) A manager keeps the door closed to maintain efficiency but makes the rounds with employees regularly to ask if there are any problems.
B) A manager keeps the door open for any concerns but closes it when an employee comes in to maintain privacy.
C) A manager keeps the door open even when a person comes in to discuss a concern to make sure there is nothing hidden within a department.
D) A manager keeps the door closed but encourages employees to be open and honest with each other.

Question 25

What advantage does having an ethics and compliance officer grant over having only managers or the owner, even if they are very attentive, manage ethical performance?

A) It ensures no retaliation against the sharer of information.
B) It allows sensitive ethical issues to be shared without dilution by the chain of command.
C) It allows sensitive ethical issues to be shared without any sanctions being levied by the organization.
D) It exempts an organization from governmental sanctions over unethical behavior.

Question 26

What should manager-employee discussions have in common when either an employee reports misconduct by another or admits to misconduct themselves?

A) a quick referral to human resources
B) condemnation of the behavior
C) praise for the reporting employee
D) a quick report up the chain to the manager's supervisor

Question 27

Which of the following best represents the way for managers to become an approachable and trustworthy source of ethics in their organization?

A) Hold an annual department meeting to review the code of ethics.
B) Respond quickly to ethical issues but do not make such discussions a part of regular work.
C) Keep an open-door policy but do not preemptively raise the issue of ethics.
D) Participate in regular ethics dialogue and refer often to the organization's code of ethics.

Question 28

Of the following, which is the most important characteristic or skill for an ECO to possess?

A) having control over internal reporting systems
B) having complete authority over managers
C) having everyone's trust
D) being a long-term employee of the company

Question 29

What should be an employee's first-used (or available) resource for dealing with an ethical problem?

A) his or her direct manager
B) the employee involved
C) the HR department
D) an anonymous hotline/helpline

Question 30

Karen is a low-level employee in a big corporation who has witnessed an ethics violation. In an ideal situation, which of the following would happen?

A) Karen would try to be a team player and cooperate with coworkers to improve productivity.
B) Karen's manager would be approachable, and the company would not need other individuals for ethics reporting.
C) Karen would feel comfortable reaching out to a government whistleblower program.
D) Karen's manager would be approachable, as would a minimum of several other individuals within the organization.

Question 31

When should a manager or company grant amnesty for an ethical violation?

A) If the employee was pressured into the violation, amnesty should be granted.
B) If the violation was part of company culture, amnesty is encouraged.
C) Amnesty should be granted for first offenses.
D) It depends on the seriousness of the violation.

Question 32

Sasha, a manager of a small department in a major financial services firm, is having a one-on-one meeting with an employee who seems worried about the ethics challenges of working at the firm. What is the last substantial thing Sasha should bring up in the meeting before it concludes?

A) Ask the employee if there have been any challenges so far in living up to the company's code of ethics.
B) Ask the employee to offer names of employees who the employee suspects of being unethical.
C) Tell the employee not to worry and that all concerns will be addressed in time.
D) Tell the employee to consider how reporting on other employees might damage their careers.

Question 33

According to KPMG's ethics defense model, what is the "second line of defense" for ensuring ethical and legal compliance?

A) business managers
B) internal audits
C) the ethics and compliance officer
D) operations managers

Question 34

What characteristic is a manager likely to gain if he or she admits to employees their own mistakes with respect to ethics in the past?

A) confidence
B) authoritarianism
C) guilt
D) approachability

Question 35

Which of the following situations, if mutually exclusive, could we expect to provide the most benefit in terms of supporting ethical behavior and reporting in a corporate department?

A) a strong level of diversity among employees
B) a company that has a strong public reputation for ethical behavior
C) an ethics reporting system that allows anonymity
D) a manager who has an open-door policy to discuss ethical concerns

Question 36

Which of the following is the mission of the Ethics & Compliance Initiative (ECI) and the Society of Corporate Compliance and Ethics (SCCE)?

A) to provide ethics and compliance officers with support and best practices
B) to objectively rate organizations on ethical performance
C) to unionize ethics and compliance officers
D) to provide third-party ethics auditing for organizations that request it

Question 37

Which of the following is best for the performance and longevity of an ECO?

A) to gather multiple perspectives from people involved in each issue
B) to be perceived as the top ethics police officer
C) to provide a uniform, standard solution to each issue
D) to try to bend the organization's culture to a new norm

Question 38

How does the federal government incentivize corporations to have an ethics and compliance officer or chief compliance officer?

A) Corporations with this receive significant tax breaks.
B) The Federal Sentencing Guidelines provide incentives.
C) Incentives are provided through advertising of "ethical" companies by the Commerce Department.
D) The federal government exempts such corporations from fraud investigations.

Question 39

What is the best way for a manager to overcome a "nothing will get done" attitude among employers?

A) Offer examples of how other companies deal with ethical issues.
B) Promise employees that action will be taken.
C) Be proactive to engage and act on concerns when raised.
D) Hold annual workshops to discuss ethics.

Question 40

How does the Society of Corporate Compliance and Ethics (SCCE) differ from the Ethics & Compliance Initiative (ECI)?

A) It is a nonprofit with a much larger membership.
B) It does not offer professional certification of ECOs.
C) It is made up of regular corporate managers, not ECOs.
D) It represents a wide spectrum of industry types.

Question 41

What happens for a college student who calls an EthicsPoint hotline and their issue does not conform to one of the established four categories of wrongdoing?

A) They are referred to the college HR department.
B) They choose the "other" option.
C) They are asked to contact the EEOC.
D) They are assigned a counselor employed by the school.

Question 42

When a manager is notified through the EthicsPoint system, what is the typical next step for that manager?

A) either asking questions of the anonymous employee or beginning to deal with the issue
B) asking EthicsPoint to step in and handle the issue
C) asking for identification of the reporting employee
D) referring the issue up the chain of command

Question 43

A manager at a mid-size company announces the addition of a third-party contracted ethics assist line for employees. But after the announcement, several employees come to him to express concerns that the new line will encourage employees to settle scores by making false accusations. What should the manager do?

A) Offer them statistics from other companies about the good that an assist line can provide.
B) Give employees a strict list of topics that are acceptable for use with the assist line.
C) Have employees vet issues through the manager first before calling the line.
D) Make clear to employees that false reporting through the assist line will be disciplined.

Question 44

Lian's company contracts with the EthicsPoint Ethics Assist Line. He emails the assist line to report an ongoing ethics behavioral problem between two coworkers. EthicsPoint takes the information and categorizes it. What will then happen to Lian's reported information?

A) EthicsPoint will dispatch an ethics manager to interview the involved parties.
B) The appropriate manager at Lian's company will be put in contact with Lian about the issue.
C) The appropriate manager at Lian's company will receive the information anonymously.
D) EthicsPoint will have Lian come in to discuss the issue with Lian's company ECO or ombudsperson.

Question 45

Managers should approach the existence of a company ethics assist line by encouraging employees to ______.

A) use the assist line, but also to inform the manager of such use
B) deal with their own issue before calling the assist line
C) come to them first with concerns before calling the line
D) use the assist line for sensitive information

Question 46

Sears reports that most of its ethics assist line calls are about how to solve a human resources issue. Which of the following is TRUE of these calls?

A) They are all referred to the appropriate company HR department.
B) They are refused politely.
C) They are welcome, but they are not part of the original intention of ethics assist lines.
D) These calls are considered the highest priority for ethics assist lines.

Question 47

What advantage does a contracted third-party ethics assist line have over one administered by a company's internal HR department?

A) It will generally provide better, more targeted advice.
B) Employees are likely to feel more comfortable using it.
C) It allows direct reporting to the EEOC.
D) Employees can raise a wider range of issues through it.

Question 48

Which of the following is TRUE of the use of ethics assist lines today?

A) Users of ethics assist lines typically just report incidents rather than receive assistance.
B) About half of fortune 500 companies now employ an ethics assist line.
C) Most organizations call them "ethics hotlines" instead of assist lines.
D) Many small organizations contract out to third party services for an ethics assist line.

Question 49

If a company requests the contracted services of a chaplain from Marketplace Chaplains and Corporate Chaplains of America, then that company can expect ______.

A) matters discussed with that chaplain to be reported to company management
B) their employees to receive Christian-based counseling
C) their employees to be able to call that chaplain anytime, day or night
D) regular counseling workshops held at the company offices

Question 50

The qui tam provision of the False Claims Act specifically empowers ______.

A) federal prosecutors taking legal action
B) citizen whistleblowers taking legal action
C) the federal government branch that pays a contractor
D) ombudspersons or ECOs within the federal government

Question 51

What is meant when the International Ombudsperson Association's Code of Ethics says an ombudsperson must possess the trait of informality?

A) The ombudsperson must not have an attitude that turns away employees who are seeking to report on an ethical issue.
B) The ombudsperson must not be a part of formal adjudicative or administrative procedures for ethical issues raised.
C) The ombudsperson must seem like a friendly individual who is understanding of organizational culture.
D) The ombudsperson does not use formal chains of command to report issues that have been introduced to him.

Question 52

What does the chaplain position have that neither the ECO nor ombudsperson positions possess?

A) a religious component
B) a promise of confidentiality
C) an assurance of anonymity
D) an ethical component

Question 53

Which of the following is one of the four core ethical principles that the International Ombudsperson Association's Code of Ethics suggests an ombudsperson must have?

A) confidentiality
B) loyalty
C) dependence on executive leadership
D) forcefulness

Question 54

What is the most common way for organizations to detect fraud?

A) internal tips
B) internal audits
C) external investigations
D) management review

Question 55

How does the text define "whistleblowing"?

A) contacting someone outside the organization about potential or actual nontrivial misconduct inside the organization
B) contacting an ethics assist line about an ethics issue to avoid going through internal organizational channels
C) contacting federal or state governmental authorities about an ethics violation
D) using either government or media sources to effect ethical change within a private organization

Question 56

In which of the following ways does having an ombudsperson differ from having an ECO?

A) It does not provide one individual with comprehensive control over communicating ethics and training in ethics.
B) It does not offer employees a channel for reporting abuses or ethics issues.
C) It does not provide employees with an anonymous way to report problems.
D) It does not imbue an individual with the capacity to recommend change in the organization.

Question 57

What is typical of modern corporate chaplains?

A) close working relationships with employees
B) dual roles as an ombudsperson
C) dual roles as an ECO
D) professional training in counseling

Question 58

A new employee at a mid-size corporation believes she has suffered two incidents in which a specific manager has treated her in a discriminatory way based on race. She could file a complaint directly with the EEOC, but she could also raise the issue with the company's ombudsperson. Why might she choose the latter?

A) It is more likely to win her financial damages.
B) It is more likely to bring about change in the organization.
C) It could be a quicker and less upsetting resolution process.
D) It is more likely to come to the attention of executive leadership.

Question 59

Who would typically handle the negotiation for a small business if dealing with an ethical violation that involves the federal government?

A) whoever the company has assigned as an ethical point person
B) the company's ombudsperson
C) an ombudsperson assigned by the small business industry group
D) the company's ECO

Question 60

What common purpose is served by the False Claims Act, Tax Relief and Health Care Act, and Dodd-Frank Act?

A) They encourage whistleblowers among employees specific to government institutions.
B) They reduce the need for whistleblowers to report on private organizations.
C) They help protect whistleblowers from retribution.
D) They help provide whistleblowers with financial compensation.

Question 61

What primarily encouraged the creation of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

A) news reports about fraud by government contractors
B) the need to encourage whistleblowers in the financial industry
C) the financial crisis that began in 2007
D) the success of the False Claims Act

Question 62

What effect has the Whistleblower Reward Program had?

A) Billions have been reported but only a few million recovered to legal challenges.
B) Billions have been recovered and millions paid out to whistleblowers.
C) The program is too new to assess effects, but early reporting suggests billions in possible taxes will be collected.
D) Whistleblowers have been largely reluctant to come forward due to issues concerning lack of anonymity.

Question 63

Why might a citizen not want to file suit under the False Claims Act against a company that has committed major fraud against the federal government and is now in bankruptcy?

A) When in bankruptcy, company executives are free from prosecution for financial issues.
B) The company's failure in the marketplace is already under a law suit.
C) There is little point in filing suit if the company is unlikely to be able to pay back any of the money.
D) The False Claims Act specifically protects companies in bankruptcy from prosecution.

Question 64

In order to satisfy a requirement for a whistleblower to report through the Dodd-Frank Act, the reporting must be ______.

A) done by a U.S. citizen living within the U.S.
B) about an SEC violation that has already occurred
C) voluntary
D) anonymous

Question 65

What does the IRS's Whistleblower Reward Program have in common with the False Claims Act?

A) Both encourage whistleblowers to file suit against individuals as well as companies.
B) Both provide financial incentives to whistleblower citizens in the form of a percentage of money recovered.
C) Both provide financial incentives to whistleblower citizens in the form of standardized monetary rewards.
D) Both provide total anonymity for the whistleblower.

Question 66

In what way does the Sarbanes-Oxley Act of 2002 strengthen the effects of the Dodd-Frank Act of 2010?

A) It increases whistleblower involvement by strengthening protections for whistleblowers reporting under Dodd-Frank.
B) It increases the severity of the penalties against companies charged with fraud under Dodd-Frank.
C) It widens the scope and definition of fraud that can be reported by whistleblowers.
D) It allowed companies to fire whistleblowers only when giving financial compensation far beyond a typical severance payment.

Question 67

Even if a whistleblower wins a legal case against his company and is compensated, the legal process can be damaging because ______.

A) whistleblowers must first submit to arbitration instead of bringing direct legal suit
B) it often takes years to complete while the whistleblower is unemployed
C) a whistleblower is not allowed to be employed by the company he or she is suing
D) that compensation does not take into account the whistleblower's legal costs

Question 68

Cami has noted that her industrial processing company is dumping toxic chemicals into a nearby river but hiding the action through bookkeeping tricks. She has ample evidence of the behavior and is ready to make her first move by calling a government whistleblower hotline. But when she consults an attorney, she is advised not to make the call yet. What did the attorney likely tell her?

A) Whistleblowing should be limited to financial services fraud.
B) Whistleblowing should not be pursued in this case because Cami is likely to lose her job.
C) Cami has not yet demonstrated that the behavior is causing direct harm to people.
D) Cami has not yet tried to communicate her concerns to anyone inside the company.

Question 69

Which of the following was a component of Sarbanes-Oxley designed to strengthen the ethical performance or behavior of American companies?

A) Every publicly traded company must have an ECO.
B) Companies can only hire third-party auditors.
C) Companies were required to have a code of ethics.
D) Companies could not make personal loans to executives or directors.

Question 70

How has the public perception of whistleblowers changed over time?

A) from relatively harmless tattletales to individuals who can do real damage to a company
B) from disgruntled employees toward an image as misguided social warriors
C) from disgruntled employees toward an image as people providing a public service
D) from public servants to greedy opportunists (as cash settlements to whistleblowers has risen)

Question 71

Most retaliation against the whistleblower for whistleblowing is initiated by ______.

A) leaders in the broader industry in which the employee works
B) the company's HR department
C) the employee's manager or higher-level managers
D) the employee's coworkers

Question 72

What is the first step a whistleblower should take before choosing to report on a company's misdeeds?

A) Consult an attorney.
B) Secure financial savings.
C) Quit his or her position at the company.
D) Call an anonymous ethics reporting hotline.

Question 73

Which of the following statements about nonprofit help for whistleblowers is accurate?

A) The Project on Government Oversight has a narrow focus on military and military contractor fraud.
B) The National Whistleblowers Center is exclusively a lobbying organization for whistleblower issues.
C) The Government Accountability Project pursues whistleblowing cases across a wide range of fields.
D) Whistleblowers who seek out the support of nonprofits must give up their anonymity and risk backlash by the companies that employ them.

Question 74

What lesson is the text trying to impart by relating the whistleblowing stories of Cynthia Cooper and Tony Menendez?

A) Financial rewards for the whistleblower, though long in coming, typically compensate for any hardship suffered.
B) Even ultimate victory for the whistleblower can be preceded by many years of hardship and pain.
C) It is very rare for a whistleblowing case to end in a favorable outcome for the whistleblower.
D) Some whistleblowers can win major cases without securing legal services.

Question 75

In which of the following situations should a whistleblower not try to file a suit under the False Claims Act?

A) The information about the fraud comes from a private, nonpublic source.
B) The whistleblower has specific knowledge of tax fraud by her company.
C) The fraud only involves federal money.
D) The fraud involves a very high sum of money, in the millions of dollars.

Question 76

The Dodd-Frank Act offers financial whistleblower incentives for reporting about ______.

A) tax violations
B) discrimination issues
C) federal contractor fraud
D) securities violations

Question 77

What is the general legal success rate of whistleblower suits against financial services companies in the wake of Frank-Dodd and Sarbanes Oxley?

A) extremely high, with courts almost always granting major victories and compensation to whistleblowers
B) high, with courts and juries regularly ruling in favor of whistleblowers
C) somewhat low, with around a quarter winning favorable rulings
D) extremely low, with only a very small percentage winning favorable rulings

Question 78

Which of the following conditions should be met (according to most attorneys' advice) before whistleblowing?

A) Damages must be over a million dollars.
B) Serious harm is involved.
C) The employee must still be employed by the company.
D) The employee must have video or audio recordings of the fraudulent behavior.

Question 79

Karen contacts the IRS Whistleblower Office to report on tax fraud in excess of $5 million annually by her company. What process will this trigger?

A) a public investigation of the company by the IRS Whistleblower Office
B) removal of Karen from the company for her own protection
C) a routine audit of the company by the IRS
D) a notification of company leadership of the complaint in hopes the company will volunteer information about the fraud

Question 80

Who is typically the most informed person about a company's abuses?

A) an employee
B) a customer
C) a supplier
D) a government auditor