Question 1

A(n) _____ is a tool that companies can employ to identify and measure their ethical commitment to stakeholders.

Accepted Answer

A)   ethics audit
B)   social audit
C)   financial audit
D)   performance audit
E)   external audit A

Question 2

At which stage of the ethics auditing process would a hospital conduct focus groups with management, doctors, nurses, related health professionals, support staff, and patients?

Accepted Answer

A)   Collect and analyze relevant information
B)   Review organizational mission, goals, values, and policies
C)   Identify stakeholders
D)   Report the results
E)   Verify the results A

Question 3

Compare and contrast ethics auditing and financial auditing. How can the tools of financial auditing be applied to ethics audits?

Accepted Answer

Pages 243-244

Question 4

What should be the first step in the auditing process?

Accepted Answer

A)   Secure the commitment of top executives and directors
B)   Define the scope of the audit
C)   Establish a committee to oversee the audit
D)   Collect and analyze data
E)   Review organizational mission, goals, values, and policies

Question 5

What are the three Triple Bottom Line factors incorporated into the Global Reporting Initiative framework?

Accepted Answer

A)   Economic, social, personal indicators
B)   Political, social, and environmental indicators
C)   Economic, social, and environmental indicators
D)   Political, individual, and environmental indicators
E)   Political, individual, and personal indicators

Question 6

While social reports often discuss issues related to a firm's performance in the four dimensions of social responsibility, as well as to specific social responsibility and ethical issues, ethics audits have a narrower focus on assessing and reporting on a firm's performance in terms of

Accepted Answer

A)   ethical and legal conduct.
B)   environmental performance.
C)   financial performance.
D)   customer satisfaction.
E)   ethical misconduct.

Question 7

Any attempt to verify outcomes and to compare them with standards can be considered a(n) _____ activity, although many smaller firms do not use this word.

Accepted Answer

A)   ethical
B)   auditing
C)   formal
D)   informal
E)   accounting

Question 8

_____ are a primary stakeholder group and should be included in the ethics auditing process because their loyalty determines an organization's success.

Accepted Answer

A)   Customers
B)   Employees
C)   Special interest groups
D)   Competitors
E)   Legislators

Question 9

Because ethics and social audits are _____, there are few standards that a company can apply with regard to reporting frequency, disclosure requirements, and remedial actions that it should take in response to results.

Accepted Answer

A)   not necessary
B)   expensive
C)   required by law
D)   mandatory
E)   voluntary

Question 10

Retaliation against employees that report misconduct is a problem in _____ cultures.

Accepted Answer

A)   weak ethical
B)   strong ethical
C)   high power distance
D)   diverse
E)   international

Question 11

Independent verification of the ethics audit is important because it lends the report

Accepted Answer

A)   credibility and formality.
B)   credibility and reliability.
C)   credibility and objectivity.
D)   objectivity and civility.
E)   objectivity and reliability.

Question 12

During which step of the auditing process should a firm examine all documents that make explicit commitments to ethical, legal, or social responsibility?

Accepted Answer

A)   Secure commitment of top managers and directors.
B)   Establish a committee to oversee the audit.
C)   Define the scope of the audit process.
D)   Review organizational mission, goals, values, and policies.
E)   Verify the results.

Question 13

_____ is an independent assessment of the quality, accuracy, and completeness of a company's social or ethics report.

Accepted Answer

A)   Publication
B)   Verification
C)   Auditing
D)   Analysis
E)   Validation

Question 14

A(n) _____ is a financial accounting firm that offers social auditing services or a nonprofit special interest group with auditing experience that verifies the results of ethics auditing data analysis

Accepted Answer

A)   stakeholder
B)   ethics audit consultant
C)   best practices expert
D)   financial consultant
E)   board of directors

Question 15

While ideally the board of directors financial audit committee conducts ethics audits, in most firms they are conducted by

Accepted Answer

A)   managers or ethics officers.
B)   executive officers.
C)   the CEO.
D)   outside consultants.
E)   secondary stakeholders.

Question 16

Which of the following is not a phase of escalation during an ethical disaster?

Accepted Answer

A)   The firm's discovery of the misconduct
B)   Ethical issue recognition
C)   The firm's response to the misconduct
D)   The decision to act unethically
E)   The firm's decision to conduct an ethics audit

Question 17

Which of the following is not a technique for collecting evidence during the ethics audit?

Accepted Answer

A)   Ratio analysis
B)   Observing the data-collection process
C)   Publishing the results of the audit
D)   Examining internal and external documents
E)   Confirming information in the firm's accounting records

Question 18

Which of the following is a possible unintended consequence of an organization's focusing more on ethics planning than on implementation?

Accepted Answer

A)   Unethical conduct is viewed as acceptable behavior.
B)   The government implements its own audits.
C)   The ethics program is poorly designed.
D)   Employees become annoyed.
E)   The implementation process incurs large costs for the organization.

Question 19

Which of the following is not a benefit of ethics auditing?

Accepted Answer

A)   It can improve a firm's performance and effectiveness.
B)   It can increase a firm's attractiveness to investors.
C)   It can identify potential risks.
D)   It can harm relationships with stakeholders.
E)   It can reduce the risks associated with misconduct.

Question 20

What should be the final step in the ethics auditing process?

Accepted Answer

A)   Define the scope of the audit
B)   Secure the commitment of top managers and directors
C)   Collect and analyze data
D)   Report the findings
E)   Verify the results

Exam 9: Managing and Controlling Ethics Programs