Business Ethics Test Questions with Answers

22448 words 90 pages
Chap 10:
16. Which of the following is true of gatekeepers?
a. They are not bound to ethical duties.
b. Investors and boards are examples of gatekeepers.
c. They serve as intermediaries between market participants.
d. They are not responsible for ensuring conformance to fairness in the marketplace.
Answer: c
17. Which of the following rely on gatekeepers for fair and effective functioning of economic markets?
a. Bankers
b. Auditors
c. Accountants
d. Financial analysts
Answer: a
18. The function of auditors as gatekeepers is to:
a. verify a company’s financial statements so that investors’ decisions are free from fraud and deception.
b. evaluate a company’s financial prospects or creditworthiness, so that banks and
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The Sarbanes-Oxley Act
c. The COSO framework
d. European Union 7th directive
Answer: c
38. Which of the following statements is true of the Committee of Sponsoring Organizations?
a. It improves financial reporting through a combination of controls and governance standards called the External Control—Integrated Framework.
b. It is an external mechanism that seeks to ensure ethical corporate governance.
c. It describes control as encompassing those elements of an organization that, taken together, support people in the achievement of the organization’s objectives.
d. It replaced the Sarbanes-Oxley Act to ensure ethical corporate governance.
Answer: c
39. Which of the following elements of COSO sets the tone or culture of a firm?
a. Ongoing monitoring
b. Information and communications
c. Risk assessment
d. Control environment
Answer: d
40. Which of the following elements of COSO refers to policies and procedures that support the cultural issues such as integrity, ethical values, competence, philosophy, and operating style?
a. Ongoing monitoring
b. Information and communications
c. Control activities
d. Risk assessment
Answer: c
41. Identify the COSO element that is directed at supporting the control environment through fair and truthful transmission of facts.
a. Risk assessment
b. Information and communications
c. Control activities
d. Ongoing monitoring
Answer: b
42. Which of the following COSO elements provides assessment capabilities and

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