Question 1

What was Frank Quattrone accused of doing?

Accepted Answer

A)   Insider trading
B)   Financial statement fraud
C)   Document shredding
D)   Advance trading on stock

Question 2

WorldCom employees who followed orders and made the accounting entries for capitalizing ordinary expenses served prison time.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not an option for whistleblowers?

Accepted Answer

A)   Leaving the company and saying nothing about the issue
B)   Leaving the company and saying something upon leaving
C)   Staying with the company and saying nothing about the issue
D)   Staying with the company and revealing the problem to an internal source
E)   All of the above are possible options for whistleblowers E

Question 4

Dennis Kozlowski, Mark Swartz and Mark Belnick of Tyco:

Accepted Answer

A)   All feel that because they did not break the law that they were ethical.
B)   Were all convicted of various felonies.
C)   Were fired for trying to raise issues.
D)   None of the above A

Question 5

Incentive plans influence employees' choices on ethical dilemmas.

Accepted Answer

A) True 
 B)False

Question 6

Goodwill was not a part of Tyco's accounting and financial reports.

Accepted Answer

A) True 
 B)False

Question 7

Destruction of documents related to the financial reports of a company carries a 20-year penalty.

Accepted Answer

A) True 
 B)False

Question 8

Who of the following were named CFOs of the year by CFO Magazine?

Accepted Answer

A)   Mark Swartz
B)   Andrew Fastow
C)   Scott Sullivan
D)   All of the above D

Question 9

What was the motto of the Kidder Peabody bond department?

Accepted Answer

A)   "Always honest."
B)   "Do it right and do it well."
C)   "Never question success."
D)   "The client first."

Question 10

Which is not a physical technique for managing earnings?

Accepted Answer

A)   Large-charge restructuring
B)   Inventory write-down
C)   Delayed invoices
D)   All of the above are physical techniques for managing earnings

Question 11

Prior to the Enron collapse, how many employees did Andersen have?

Accepted Answer

A)   3,300
B)   7,000
C)   11,000
D)   36,000

Question 12

Some recording artists use bankruptcy as a means for avoiding contract obligations.

Accepted Answer

A) True 
 B)False

Question 13

How did Andersen's lead defense lawyer describe David Duncan?

Accepted Answer

A)   "A client pleaser"
B)   "Someone who is free from corruption"
C)   "A straight shooter"
D)   Both b and c

Question 14

Who is Jerome LiCari?

Accepted Answer

A)   CEO of Beech-Nut
B)   Plant manager for Beech-Nut
C)   Employee in Beech-Nut's purchasing function
D)   Director of Research and Development for Beech-Nut Nutrition

Question 15

David Duncan, the audit partner in charge of the Enron account for the Houston Andersen office:

Accepted Answer

A)   Was close friends with Andrew Fastow.
B)   Was close friends with Sherron Watkins.
C)   Was close friend with Richard Causey.
D)   None of the above

Question 16

The Bear Stearns fund managers were convicted of securities fraud.

Accepted Answer

A) True 
 B)False

Question 17

What happened to WorldCom when its accounting issues and restatements were announced?

Accepted Answer

A)   Its share price fell to 13 cents
B)   NASDAQ delisted the stock
C)   Congress revoked WorldCom's federal contract
D)   All of the above

Question 18

If I discover that a fellow employee is reporting falsely his overtime hours, it is best for me to say nothing and ignore the situation.

Accepted Answer

A) True 
 B)False

Question 19

Under Sarbanes-Oxley, which of the following would be a conflict of interest for the outside auditor of a company?

Accepted Answer

A)   Providing management consulting services to the company, too
B)   Providing actuarial service to the company, too
C)   Designing the company's financial system
D)   All of the above

Question 20

Who received the longest sentence in prison for their crimes?

Accepted Answer

A)   Andrew Fastow
B)   Jeffrey Skilling
C)   John Rigas
D)   Bernie Ebbers

Exam 4: Ethics and Company Culture

What was Frank Quattrone accused of doing?

Correct AnswerverifiedShow Answer

WorldCom employees who followed orders and made the accounting entries for capitalizing ordinary expenses served prison time.

Correct AnswerverifiedShow Answer

Which of the following is not an option for whistleblowers?

Correct AnswerverifiedE

Dennis Kozlowski, Mark Swartz and Mark Belnick of Tyco:

Correct AnswerverifiedA

Incentive plans influence employees' choices on ethical dilemmas.

Correct AnswerverifiedShow Answer

Goodwill was not a part of Tyco's accounting and financial reports.

Correct AnswerverifiedShow Answer

Destruction of documents related to the financial reports of a company carries a 20-year penalty.

Correct AnswerverifiedShow Answer

Who of the following were named CFOs of the year by CFO Magazine?

Correct AnswerverifiedD

What was the motto of the Kidder Peabody bond department?

Correct AnswerverifiedShow Answer

Which is not a physical technique for managing earnings?

Correct AnswerverifiedShow Answer

Prior to the Enron collapse, how many employees did Andersen have?

Correct AnswerverifiedShow Answer

Some recording artists use bankruptcy as a means for avoiding contract obligations.

Correct AnswerverifiedShow Answer

How did Andersen's lead defense lawyer describe David Duncan?

Correct AnswerverifiedShow Answer

Who is Jerome LiCari?

Correct AnswerverifiedShow Answer

David Duncan, the audit partner in charge of the Enron account for the Houston Andersen office:

Correct AnswerverifiedShow Answer

The Bear Stearns fund managers were convicted of securities fraud.

Correct AnswerverifiedShow Answer

What happened to WorldCom when its accounting issues and restatements were announced?

Correct AnswerverifiedShow Answer

If I discover that a fellow employee is reporting falsely his overtime hours, it is best for me to say nothing and ignore the situation.

Correct AnswerverifiedShow Answer

Under Sarbanes-Oxley, which of the following would be a conflict of interest for the outside auditor of a company?

Correct AnswerverifiedShow Answer

Who received the longest sentence in prison for their crimes?

Correct AnswerverifiedShow Answer

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