Chapter 02 Business Ethics and White-Collar Crime

Chapter 02 - Business Ethics and White-Collar Crime

Chapter 02

Business Ethics and White-Collar Crime

True / False Questions

1.Ethical conversation is primarily about finding the one and only right thing to do.
TrueFalse

2.The social responsibility of business consists only of the expectations employees have of employers.
TrueFalse

3.Business ethics is the application of ethics to the special problems and opportunities experienced by business people.
TrueFalse

4.In some countries businesses must pay bribes in order to receive legitimate supplies.
TrueFalse

5.The definition of stakeholder is the same as the definition of shareholder.
TrueFalse

6.The community in which a firm operates would not be considered a stakeholder of the firm.
TrueFalse

7.In an ethical analysis using the WPH Framework referenced in the text, owners are the most important stakeholders and should receive the greatest consideration in decision making.
TrueFalse

8.The primary purpose of criminal law is to compensate a victim.
TrueFalse

9.Under our criminal laws that exist today, white-collar crime is not punishable by imprisonment.
TrueFalse

10.Congress amended the Foreign Corrupt Practices Act to conform to the Anti-Bribery Convention adopted by the Organization for Economic Cooperation and Development.
TrueFalse

11.In general, China punishes embezzlement less severely than the U.S.
TrueFalse

12.Under the common law, a corporation could not be considered a criminal because it was not an actual person and, thus, did not have a mind.
TrueFalse

13.Under current law, corporations cannot be held criminally accountable for strict-liability offenses.
TrueFalse

14.Ethical relativism is a theory of ethics that denies the existence of objective moral standards.
TrueFalse

15.Situational ethics is the same thing as ethical relativism.
TrueFalse

16.Absolutism is also referred to as ethical fundamentalism.
TrueFalse

17.Consequentialism provides a rigid set of rules to follow regardless of the situation.
TrueFalse

18.Rule utililtarianism tells business managers to examine all the potential actions in each situation and choose the action that yields the greatest amount of pleasure over pain for all involved.
TrueFalse

19.Utilitarianism is a form of consequentialism.
TrueFalse

20.Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.
TrueFalse

Multiple Choice Questions

21.Which of the following is the study and practice of decisions about what is good, or right?
A.Morals
B.Ethics
C.Consequences
D.Law
E.Business

22.A local Chamber of Commerce plans a seminar on "the social responsibility of business." What does that term reference?
A.The responsibility of business to make profit for shareholders.
B.The responsibility of business to have annual meetings.
C.The expectations that the community imposes on firms doing business inside its borders.
D.The expectations of employees regarding wage rates.
E.The expectations of management in regard to adequate utility resources.

23.As pointed out in the text section "Business Ethics and Italian Taxes" which of the following is true regarding the application of ethics in a global context?
A.While ethical considerations may vary, the enforcement of laws remains the same from country to country.
B.Ethical considerations vary from country to country as do practices of law enforcement.
C.Ethical considerations do not vary from country to country although rules for law enforcement do vary.
D.The Italian government seeks to discuss taxes after returns are filed because underestimating profits is rarely a problem there.
E.The Italian government seeks to discuss taxes before returns are filed because underestimating profits is rarely a problem there.

24.What do the letters "WPH" mean in reference to the "WPH Framework for Business Ethics" discussed in the text?
A.Who, Purpose, and How
B.When, Plan, and How
C.Why, Procedure, and Hope
D.Where, Plan, and Hope
E.Where, Procedure, and How

25.Which of the following are stakeholders of a business?
A.Shareholders
B.Employees
C.Customers
D.Management
E.All the above

26.Which of the following is true under the WPH process of ethical decision making?
A.The interest of management is ranked higher than that of employees when decisions are made.
B.The interest of owners is ranked higher than that of both employees and management when decisions are made.
C.When decisions are made, the interest of the community as a whole is considered last.
D.The interest of management is ranked higher than that of employees when decisions are made, but the interest of owners is ranked higher than the interest of any group.
E.None of the above are true.

27.What are some examples of purpose in the WPH process of ethical decision making?
A.Freedom
B.Security
C.Efficiency
D.Freedom and security, but not efficiency
E.Freedom, security and efficiency

28.Which of the following is a part of the "how" in the WPH process of decision making?
A.Public disclosure
B.Customer satisfaction
C.Profit maximization
D.Whistle-blowing
E.All the above

29.Positive abstractions that capture our sense of what is good or desirable are called ______.
A.Ethical ideas
B.Values
C.Conscience demands
D.Desirable principles
E.Action goals

30.The idea that we should interact with other people in a manner consistent with the manner in which we would like for them to interact with us is called ______.
A.The Equalization Rule
B.The Ethical Realization Rule
C.The Silver Rule
D.The Golden Rule
E.The Ten Commandments Rule

31.The "public disclosure" test for ethical behavior is sometimes referred to as the ______test.
A.Television
B.Powell
C.Self-conscious
D.Golden
E.Primary

32.The ______for ethical behavior seeks consideration of what the world would be like if a decision is copied by everyone else.
A.Golden Rule
B.Universalization test
C.Public Disclosure
D.Relevant Disclosure
E.World Rule

33.Which of the following is true regarding the universalization test for ethical behavior?
A.It is the same as the public disclosure test.
B.It has been discredited.
C.It is the same as the golden rule test.
D.It has been enacted into law by federal law.
E.None of the above.

34.Which of the following is the term that describes wrongful behavior in a criminal action?
A.Mens rea.
B.Actus reus.
C.Res judicata.
D.Stare decisis.
E.None of the above.

35.Which of the following is a term describing the wrongful state of mind needed for a criminal action?
A.Mens rea.
B.Actus reus.
C.Res judicata.
D.Stare decisis.
E.None of the above

36.Strict liability is a term used to describe which of the following:
A.Liability without fault.
B.Negligence.
C.Actus reus.
D.Intentional wrongdoing.
E.Recklessness.

37.Which of the following is an example of the imposition of strict liability?
A.A robber pulls a gun to rob a bank teller.
B.A burglar breaks into a home to steal jewelry.
C.A business sells cigarettes to a minor.
D.A minor shoplifts in a department store.
E.An adult shoplifts in a department store.

38.Which of the following is punishable by imprisonment for more than one year or death?
A.Misdemeanor.
B.Felony.
C.Petty offenses.
D.Tort offenses.
E.Any business related crime.

39.Which of the following are less serious crimes punishable by fines or imprisonment of less than one year?
A.Misdemeanor.
B.Felony.
C.Petty offenses.
D.Tort offenses.
E.Any business related crime

40.Which of the following are minor offenses usually punishable by a jail sentence of less than six months or a small fine with an example being violation of a building code?
A.Insignificant offenses.
B.Felony.
C.Petty offenses.
D.Tort offenses.
E.Any business related crime

41.Which of the following serves to combat bribery of foreign officials?
A.The Foreign Official Bribery Act
B.The International Bribery Prohibition Act
C.The Fair Business Act
D.The International Fair Business Practices Act
E.The Foreign Corrupt Practices Act

42.Which of the following is the making of threats for the purpose of obtaining money or property?
A.Bribery
B.Criminal Fraud
C.Extortion
D.Both A and C
E.Importation

43.Which of the following is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist?
A.False entries
B.Defalcation
C.False pretenses
D.Ponzi scheme
E.Pretexting

44.Which of the following is a false document or sign of existence used to perpetrate fraud, such as making counterfeit money?
A.False entries
B.False token
C.False pretenses
D.Ponzi scheme
E.Pretexting

45.Which of the following is the misappropriation of trust funds or money held in a fiduciary capacity?
A.False entries
B.Defalcation
C.False pretenses
D.Ponzi scheme
E.Pretexting

46.Which of the following is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later investors?
A.False entries
B.False token
C.False pretenses
D.Ponzi scheme
E.Pretexting

47.Zack, the president of ABC Company, falsified documents to make it appear as if he had been granted stock options on certain dates, and he selected the dates after the fact, picking dates on which the stock price was low. Which of the following offenses, if any, did he commit?
A.Insider trading
B.Pretexting
C.Defalcation
D.Stock option back-dating
E.He did not commit any offense

48.Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is simply taking money for subscriptions and has absolutely no intention of ever arranging for the provision of magazines. Which of the following offenses, if any, has he committed?
A.Defalcation
B.False entry
C.False token
D.False pretenses
E.Ponzi scheme

49.Which of the following is using fraudulent means to obtain information about someone's phone use?
A.Pretexting
B.Ponzi scheme
C.False pretenses
D.False token
E.Defalcation

50.Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank account. Instead of placing the money into the customer's account, Ben puts it into his pocket. Which of the following offenses has he committed?
A.Forgery
B.False entries
C.False token
D.Embezzlement
E.Both false token and embezzlement

51.Which of the following is a person who illegally accesses or enters another person's or a company's computer system to obtain information or to steal money?
A.Backer
B.Reacher
C.Hacker
D.Trespasser
E.Illicit user

52.Which of the following is true regarding corporate executives being held personally liable for business crime?
A.Corporate executives may never be held personally liable for a business crime.
B.Corporate executives may only be held personally liable for a business crime if they benefited personally from their actions in executing the business crime.
C.Corporate executives may be found personally liable for a business crime regardless of whether the business crime was committed for personal benefit or for the benefit of the corporation.
D.A court may not assess criminal liability on a corporate executive unless the executive directly engaged in the specific criminal violation.
E.Criminal liability may not be assessed against a corporate executive unless the executive directly engaged in the criminal activity and also profited directly and personally from the criminal activity

53.Which amendment provides the right to a speedy and public trial?
A.The Second Amendment.
B.The Third Amendment.
C.The Fourth Amendment.
D.The Fifth Amendment.
E.The Sixth Amendment.

54.Which of the following is true regarding the Fourteenth Amendment?
A.It is part of the Bill of Rights.
B.Its safeguards only apply at the federal level.
C.It extends most constitutional rights to defendants at the state level.
D.It is a part of the Bill of Rights, its protections apply at the federal level, and its protections also apply at the state level.
E.It is not a part of the Bill of Rights, and its protections apply only at the federal level.

55.Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that there is ______that a suspect committed or is planning to commit a crime.
A.Likely cause
B.Suspected cause
C.Certainty
D.Probable cause
E.Information

56.Of which of the following must a defendant be informed before questioning?
A.That the defendant must answer questions or there will be a presumption of guilt at trial.
B.That statements made to law enforcement before arraignment may not be used against the defendant in court.
C.That the defendant has the right to consult an attorney before speaking to the police.
D.That unless the defendant can afford any attorney, the defendant will not have an attorney.
E.That the right to an attorney does not begin until after the defendant is arraigned.

57.Which of the following occurs when a defendant makes a first appearance?
A.A magistrate determines whether there was proof beyond a reasonable doubt for the arrest.
B.A magistrate determines whether there was probable cause for the arrest.
C.A magistrate determines whether the defendant was properly booked.
D.A magistrate determines whether there was proof beyond a reasonable doubt for the arrest and also whether the defendant was properly booked.
E.None of the above.

58.Which of the following is a plea in which the defendant does not admit guilty but agrees not to contest the charges?
A.Petit defense.
B.Information.
C.Nolo contendere.
D.Sine qua non.
E.Plea avoidance.

59.A judge reports that a jury was "hung". What does the judge mean?
A.That the jury wanted to hang the defendant by imposing a heavy sentence.
B.That the jury wanted to hang the prosecutor for unjustly charging the defendant.
C.That the jury could not reach a decision.
D.That the jury had waited an excessive amount of time before reaching a verdict.
E.That the jury had waited an excessive amount of time before retiring for the evening.

60.Which of the following is a federal law that has been somewhat successful in the battle against business-related crimes?
A.The Racketeer Influenced and Corruption Organizations Act.
B.The False Claims Act.
C.The Sarbanes-Oxley Act of 2002.
D.All of the above.
E.None of the above.

61.Which of the following was created specifically to combat white-collar crime?
A.The Racketeer Influenced and Corruption Organizations Act.
B.The False Claims Act.
C.The Sarbanes-Oxley Act of 2002.
D.The White-Collar Enforcement Act.
E.None of the above.

62.Courts have defined a pattern of racketeering under RICO as more than ______action[s].
A.One
B.Two
C.Three
D.Four
E.None of the above. There is no requirement of more than one action

63.Carla learns that her employer, a healthcare facility, is committing fraud against the government by filing false Medicare claims. Under which of the following might she obtain a portion of any recovery obtained by the government?
A.RICO.
B.The False Claims Act.
C.The Sarbanes-Oxley Act of 2002.
D.The Medicare Recovery Act.
E.The Healthcare Fraud Act.

64.Which of the following was passed largely in response to business scandals of the 2000's, such as Enron?
A.RICO.
B.The False Claims Act.
C.The Sarbanes-Oxley Act of 2002.
D.The Medicare Recovery Act.
E.The Healthcare Fraud Act.

65.Under the Sarbanes-Oxley Act of 2002, it is a felony for an auditor to willfully fail to maintain proper records of audits and work papers for at least _____ years.
A.Two
B.Three
C.Four
D.Five
E.Ten

66.The ethical theory that requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma is called ______.
A.Situational ethics
B.Ethical relativism
C.Absolutism
D.Consequentialism
E.Relativity ethics

67.How is absolutism different from ethical relativism and situational ethics?
A.It applies utilitarianism.
B.It holds that a cost-benefit analysis should be applied.
C.It holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma.
D.It applies virtue ethics.
E.It applies corporate ethics principles.

68.Which of the following describes the theory of ethical relativism?
A.Its only principle is the denial of the existence of objective moral standards.
B.It holds that individuals must evaluate actions on the basis of what they feel is best for themselves based upon objective moral standards.
C.It holds that since morality is relative, we have a basis upon which to criticize the behavior of others as immoral.
D.It denies the existence of objective moral standards, it holds that individuals must evaluate actions on the basis of what they feel is best for themselves, but it does not hold that morality is relative.
E.It denies the existence of objective moral standards; it holds that individuals must evaluate actions on the basis of what they feel is best for themselves; and it holds that since morality is relative, no one can criticize another's behavior as immoral.

69.What is another name for absolutism?
A.Ethical fundamentalism
B.Ethical relativism
C.Virtue ethics
D.Rule utilitarianism
E.Ethics of care

70.Which of the following is an ethical school of thought that denies the existence of objective moral standards?
A.Absolutism
B.Deontology
C.Categorical Imperative
D.Uncertainty of Thought
E.None of the above

71.Which of the following is true under the ethical theory of absolutism?
A.It requires that individuals defer to a set of rules to guide them and holds that all rational individuals will agree on the appropriate set of rules to follow.
B.It requires that all individuals decide for themselves what is ethical depending on the circumstances.
C.It requires that all individuals in a community agree on an appropriate set of ethical rules, but recognizes that individuals outside the community may have a different set of ethical rules.
D.It holds that individuals should decide ethical principles based on their upbringing but not upon the situation itself.
E.It requires that individuals defer to a set of rules to guide them but recognizes that people may disagree about which rules to follow.

72.What is the basis of consequentialism?
A.Deontology
B.Categorical imperatives
C.Inquiry into the consequences
D.Disregard of consequences
E.Act utilitarianism

73.Kantian ethics is involved with which of the following ethical theories?
A.Deontology
B.Act utilitarianism
C.Rule utilitarianism
D.Absolutism
E.Situational ethics

74.What is a difficulty with the application of virtue ethics?
A.The applicable categorical imperatives.
B.The lack of agreement about the meaning of "the good life."
C.The applicable principle of rights.
D.The ethics of care analysis.
E.Both the applicable categorical imperatives and the lack of agreement about the meaning of "the good life."