Test Bank Ethical Obligations and Decision Making in Accounting Text and Cases 4th Edition by Steven M Mintz Chair

Test Bank Ethical Obligations and Decision Making in Accounting Text and Cases 4th Edition by Steven M Mintz Chair

Chapter 08
Ethical Leadership and Decision-Making in Accounting

Multiple Choice Questions

1. It can be said that ethical leaders exhibit each of the following traits except for:

A. Ethical leaders understand the need for respect, openness and trust

B. Ethical leaders aim to empower others to achieve success based on right action

C. Ethical leaders take responsibility for their actions and are accountable

D. Ethical leaders encourage behaviors whereby employees do what the leaders say

2. The statement about leadership attributed to John Maxwell is:

A. Visions are not simple goals, but rather ways of seeing the future that implicitly or explicitly entail some notion of the good

B. Principle-centered leaders build greater, more trusting and communicative relationships with others in the workplace

C. Leaders lead by example not based on what they say

D. Leaders always follow the law even if it deviates from ethical action

3. With respect to leadership in the accounting profession, it might be said that:

A. Ethical judgment is more important than how one makes decisions

B. Partners must exhibit moral imagination through ethical perception of what it means to be ethical, professional, and successful

C. Partners must exhibit ethical decision making through ethical sensitivity to the needs of one’s firm

D. How one makes decisions is more important than ethical leadership

4. Trevino et al. believe ethical leaders possess each of the following two traits:

A. Moral follower and moral servant

B. Moral person and moral manager

C. Moral person and moral employee

D. Moral person and transformational leader

5. To be an ethical leader, executives must also:

A. Attend to cultivating ethics and be an ethical person

B. Attend to client’s interest and be a moral person

C. Serve in followership roles

D. Serve as servant leaders

6. To hold employees accountable to ethical standards, moral managers:

A. Walk the talk of leadership

B. Use reward systems to encourage ethical performance

C. Strive to do what is right regardless of the consequences of one’s actions

D. All of the above

7. In accounting, building a reputation for ethical leadership means to:

A. Enable ethics and values to take place without fear of retaliation

B. Enable ethics and values to shine through the fog of beating the competition and meeting financial projections

C. Refrain from using non-GAAP measures of earnings

D. Create an environment that fosters short-term shareholder value

8. An authentic leader:

A. Is focused on building short-term shareholder value, not in just beating quarterly estimates

B. Is focused on controlling management’s desires to beat quarterly estimates

C. Empowers employees to make choices after discussing them with leaders

D. Acts consistently with norms of behavior

9. Transformational leaders:

A. Empower employees to act based on their ethical goals and values

B. Follow what top management sets as its goals for the organization

C. Causes change in individuals and social systems

D. Connect the follower’s behavior to the collective identity of the organization

10. It can be said about followership that:

A. Followership is the same as leadership

B. Followership and servant leadership are the same

C. Followership is the flip side of leadership

D. Followers are always transformational leaders

11. Servant leaders:

A. Advocate a perspective that leaders have a responsibility to serve their followers by helping them to achieve followers’ goals

B. Servant leadership is the flip side of authentic leadership

C. Promote a culture that enhances organizational outcomes

D. Help followers to fulfill their needs by modeling ethical values, attitudes and behaviors

12. Followership, servant leaders, and authenticity all share the following common characteristic:

A. Values-based leadership

B. Sensitivity to ethical dilemmas

C. Adherence to organizational norms even if it means compromising one’s values

D. Leader ethicality

13. De Cremer and Tenbrunsel characterize ethical leadership in part as:

A. Intention to demonstrate normatively appropriate conduct

B. Environment that promotes transformational leadership

C. Influencing followers to always adhere to leaders’ goals for the organization

D. Environment that promotes servant leadership

14. Social Learning Theory holds that:

A. Employees learn what to do by observing their leaders’ behavior and its consequences

B. Employees learn what not to do by observing their leaders’ behavior and its consequences

C. Employees learn what to do and what not to do by observing their leaders’ behavior and its consequences

D. Employees learn what to do and what not to do when antisocial behaviors exist

15. Leaders who engage in unethical behaviors create a context supporting:

A. Cognitive dissonance

B. Parallel deviance

C. Moral intensity

D. Leader perseverance

16. A good example of antisocial behavior is:

A. Dennis Kozlowski’s use of corporate resources for personal purposes

B. Betty Vinson’s decisions to go along with financial wrongdoing

C. Jeff Skilling’s policy of “rank and yank”

D. Whistleblowing by Cynthia Cooper

17. The more intense the ethical issues, the more likely:

A. Decision makers will act in accordance with their own ethical values

B. Decision makers are aware of the ethical implications of their intended actions

C. Organizations will foster ethical behavior

D. Organizations will establish an ethical tone at the top

18. Each of the following is a factor that needs to be evaluated for moral intensity except:

A. Magnitude of consequences of the moral act

B. Degree of social consensus that the moral act is unethical

C. Feelings of proximity of the moral agent to the moral act

D. All of the above are relevant factors

19. An important factor in evaluating moral intensity is:

A. Temporal immediacy of the effect of the moral act

B. Consequences of proximity of the moral agent and ethical leadership

C. Influence of moral judgment on moral intensity

D. All of the above are relevant factors

20. Taylor and Curtis found from their study of whistleblowing among public accounting seniors that:

A. Moral intensity affects the intention to report wrongdoing

B. Moral intensity is independent of the intention to report wrongdoing

C. Ethical leaders ignore the magnitude of consequences when deciding whether to blow the whistle

D. Ethical leaders base their decision whether to blow the whistle on temporal immediacy of the effect of the moral act

21. An essential element in creating an ethical environment in an audit firm is:

A. Socialization of employees

B. Moral intensity of the situation

C. Responsible leadership of the firm

D. Firm values, behavior and attitudes

22. The ethical environment within an accounting firm is created through adherence to the:

A. AICPA Code of Professional Conduct

B. Rules and regulations of the SEC

C. Stated values and management practices

D. Moral intensity and management practices

23. Ponemon hypothesized that there is a correlation between:

A. Moral intensity and subordinates’ personal characteristics and decision-making styles

B. Organizational culture and subordinates’ personal characteristics and decision-making styles

C. Culture of the organization and leadership style

D. Leadership style and followership

24. Organizational dissidence in audit firms is created when:

A. Client interests are placed ahead of the public interest

B. Firm interests are placed ahead of the public interest

C. Individual values do not fit into expectations of the firm

D. Individual values lead to firms changing their values to achieve greater socialization

25. Selection-socialization bias in audit firms pertains to:

A. Whether a firm hires and promotes individuals who fit into the prevailing firm culture and whether individuals unable to fit leave

B. Whether a firm fires individuals who do not fit into the prevailing firm culture

C. Whether individuals choose to work for a particular firm

D. Effective leadership and followership

26. The results of Morris’ study of the influence of authentic leadership and ethical firm culture on auditor behavior is:

A. A significant positive correlation exists between authentic leadership and dysfunctional audit behaviors

B. A significant negative correlation exists between authentic leadership and dysfunctional audit behaviors

C. Audit seniors more frequently prematurely sign off on audit work than under-report time

D. Audit seniors act on their own values regardless of their perceptions of the firm culture

27. In Bobek’s study of the effect of gender on decision-making of public accounting professionals, it was found that:

A. Males were more likely than females to concede to the client’s demands in an audit condition

B. Males were less likely than females to concede to the client’s demand in an audit condition

C. Males are more likely than females to use an intuitionist approach in decision making

D. Males were less likely to concede to the client’s demands on a tax condition than an audit condition

28. Which of the following is NOT an attribute of internal audit leadership according to Chambers?

A. Honesty

B. Objectivity

C. Accountability

D. Trustworthiness

29. Accountants may hesitate to record a questionable entry if they know:

A. Internal audit is likely to detect the possible error

B. Internal audit is likely to detect the inappropriate financial reporting practices

C. Internal audit is likely to communicate it to the external auditors

D. Internal audit is likely to blow the whistle on inappropriate financial reporting practices

30. Arel et al. in their study of ethical leadership, the internal audit function, and moral intensity on a decision to record a questionable entry found that:

A. There is a joint influence of ethical leadership and internal audit quality on accountants’ willingness to book a questionable entry

B. There is a joint influence of internal audit quality and tone at the top on accountants’ willingness to book a questionable entry

C. Ethical leadership does not influence accountants’ willingness to book a questionable entry

D. Internal audit quality does not influence accountants’ willingness to book a questionable entry

31. Bobek et al. found a disconnect between tax partners and nonpartner tax practitioners with respect to:

A. Perceptions of ethical leadership when they described a self-identified ethical dilemma

B. Perceptions of ethical leadership when there was a difference of opinion on a tax matter

C. Perceptions of organizational ethics when they described a self-identified ethical dilemma

D. Perceptions of organizational ethics when there was a difference of opinion on a tax matter

32. Bobek et al. found that nonpartners are more likely to perceive the ethical environment of their firm as strong when they:

A. Believe they have a meaningful role in shaping and maintaining the ethical environment of their firms

B. Believe ethical leaders consider their interests in firm decision making

C. Are included in firm decision making

D. Have a high frequency of receiving mentoring

33. The fraud at HealthSouth at the structural level of the company was more intense because:

A. The external auditors went along with the fraud

B. The board of directors managed the fraud

C. Checks and balances were eliminated and organizational culture was compromised

D. There was no hotline to report financial fraud

34. Ethical leadership failure can be caused by:

A. Lines of communication are blurred

B. Ignoring ethical boundaries within a company

C. Organizational factors promote unethical action

D. All of the above

35. Price believes that ethical failures in leaders are:

A. Typically, volitional rather than cognitive

B. Typically, cognitive rather than volitional

C. Caused by deficiencies in internal controls

D. Caused by considering the interests of parties outside their group of followers

36. According to Mesmer-Magnus and Viswesvaran, organizational employees have three options to address an unsatisfactory situation faced within an organization. These include:

A. Exit the organization, voice discontent, discuss matters with the board of directors

B. Exit the organization, remain silent, report the matter to the external auditors

C. Exit the organization, remain silent, voice discontent

D. Exit the organization, blow the whistle, report the matter to the authorities