Question 1

Legal mandates and ethical mandates are:

Accepted Answer

A)  Identical 
B)  Different, with legal mandates usually imposing higher behavioral requirements than ethical mandates 
C)  Different, with ethical mandates usually imposing higher behavioral requirements than legal mandates 
D)  Both imposed on professional accountants, with legal mandates typically having broader application

Question 2

Acting based on fear of disappointing your close friends corresponds to which of the following stages of moral development?

Accepted Answer

A)  The pre-conventional stage 
B)  The conventional stage 
C)  The post-conventional stage 
D)  All of the above

Question 3

Self-regulation of the auditing profession in the United States:

Accepted Answer

A)  Has always been, and remains, a distinguishing feature of the auditing profession 
B)  Historically has characterized the oversight of auditors of privately-held companies, but no longer does 
C)  Historically has characterized the oversight of auditors of publicly-held companies, but no longer does 
D)  Never has been a characteristic of the auditing profession because government understandably recognizes the need to assure strict compliance with ethical standards designed to protect the investing public

Question 4

Ethical absolutism means that:

Accepted Answer

A)  All cultures share a common set of ethical values 
B)  Ethical duties are absolute requirements that are, if necessary, imposed by laws 
C)  Value systems absolutely vary over time as societal views progress 
D)  A person has an absolute duty to follow ethical principles, even if they diverge from legal mandates

Question 5

According to the Objectivity and Independence Principle of the AICPA's Code of Professional Conduct, accountants should always be independent in providing:

Accepted Answer

A)  All professional services 
B)  All services to their employer 
C)  All audit services 
D)  All tax advisory services

Question 6

Of all of the characteristics of a profession, which one is the most important? Why?

Accepted Answer

The answer of Of all of the characteristics of a...

Question 7

State and describe the six Principles of the AICPA Code of Professional Conduct.

Accepted Answer

The answer of State and describe the six Principles of...

Question 8

What aspects of accounting practice reflect that accounting is a profession?

Accepted Answer

The answer of What aspects of accounting practice reflect that...

Question 9

In Kohlberg's Six Stages of Moral Development, striving to act in accordance with laws occurs at:

Accepted Answer

A)  Stage 2 
B)  Stage 4 
C)  Stage 5 
D)  Stage 6

Question 10

An unethical act:

Accepted Answer

A)  Is always illegal as well 
B)  Is not necessarily illegal 
C)  Must, at minimum, violate a government regulation 
D)  Is determined for the accounting profession by the FASB

Question 11

To act ethically, a person always must:

Accepted Answer

A)  Follow the formal expression of a law 
B)  Follow both the spirit and the formal expression of a law 
C)  Do the right thing, even if violates a law 
D)  Adhere to the spirit, intent, and formal expression of a law

Question 12

What are the six stages of moral development, according to Kohlberg?

Accepted Answer

The answer of What are the six stages of moral...

Question 13

One of Carol Gilligan's key conclusions is that:

Accepted Answer

A)  Men are more ethical than women 
B)  Women are more ethical than men in resolving dilemmas that hinge on issues of fairness and justice 
C)  At higher stages of moral development, women are more focused on issues of compassion for those in need than men are 
D)  At higher stages of moral development, women are more focused on issues of equality of opportunity for all than men are

Question 14

Can you identify an ethical decision that an IRS agent might encounter?

Accepted Answer

The answer of Can you identify an ethical decision that...

Question 15

Discuss an ethical issue that you believe you resolved using a System 1 mental response.

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Question 16

Do you believe that most ethical decision-making is made in accordance with a model or other framework? Why or why not?

Accepted Answer

The answer of Do you believe that most ethical decision-making...

Question 17

Which of the following is not one the four stages in Rest's Four-Component Model of Ethical Decision-Making?

Accepted Answer

A)  Developing moral sensitivity 
B)  Developing sound moral judgment 
C)  Developing a willingness to challenge unjust laws 
D)  Developing the character to initiate actions

Question 18

One hallmark of a profession is:

Accepted Answer

A)  Its members' unrelenting dedication to clients' interests over the countervailing public interest 
B)  Its classification as a profession by the U.S. Department of Labor 
C)  Its members' willingness to cooperate with clients by subordinating their judgments in deference to clients' desires 
D)  A member's exercise of independent judgment

Question 19

The usury laws:

Accepted Answer

A)  Are an example of ethical absolutism 
B)  Are an example of ethical relativism 
C)  Bar excessively high interest rates on certain types of loans 
D)  Reflect the consensus among all countries that interest rates need to regulated by a universal body or multi-governmental entity

Question 20

Creation of the PCAOB was an important event in the development of the accounting profession because it altered the accounting profession's historical policy of self-regulation in the area of:

Accepted Answer

A)  Internal auditing 
B)  Tax return preparation 
C)  Tax advocacy on behalf of clients accused of fraud 
D)  External auditing of publicly-traded companies

Exam 2: Ethical Principles and Reasoning