DeVry University, Keller Graduate School of Management - ACCT 530/ACCT 530 Midterm Question And Answers_A+ Grade.

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ACCT.530 Week 4 Midterm Exam Page: 1 – Multiple Choice Question (TCO A) All of the following characteristics describe the importance of integrity in decision making, except: Question (TCO A) ... An accountant who goes outside the entity to blow the whistle on financial wrongdoing by his/her employer violates: Question (TCO A) The Public Interest Principle in the AICPA Code of Professional Conduct recognizes: Question (TCO A) When making a donation at the local Goodwill, Martha tells the clerk that her old computer is worth $400 when she knows it is only worth $100, just so she can deduct more on her taxes. Which theory best describes Martha’s behavior? Question (TCO A) Ethical relativism can best be described as a(n): Question (TCO B) Each of the following is a pillar of corporate governance, except for: Question (TCO B) The Institute of Internal Auditors Code of Ethics includes each of the following principles, except: Question (TCO B) The ACFE found that the most common way that fraud is first detected is through: Question (TCO B) Top values included in corporate values statements include: Question (TCO B) In an ethical decision-making model, the first step is to: Question (TCO B) What is the agency problem? Question (TCO C) The ethical domain in accounting and auditing refers to: Question (TCO C) The need to exercise professional skepticism in auditing can be linked to: Question (TCO C) After framing the question, what should be the next step in decision making when faced with an ethical dilemma? Question (TCO C) Thorne’s Integrated Model of Ethical Decision Making can best be described as: Question (TCO H) Wanda is faced with an ethical dilemma. She knows her supervisor, the CFO, wants to accelerate the recoding of revenue to an earlier period in order to “make the numbers.” But Wanda is convinced this would violate GAAP. If Wanda reasons at stage 4 of Kohlberg’s model, she is most likely to: Question (TCO H) Maya is the CEO of Gadget Corporation, a publicly-traded company. She was informed by the CFO that the company’s earnings were down 40 percent from the prior year due to the recession. The company’s stock price has declined by 30 percent. The CFO comes up with a scheme to hide debt and inflate revenues by selling underperforming assets to a special purpose entity affiliated with the company. Maya is concerned about possible effects on the creditors, but ultimately, she agrees to the accounting. Maya is reasoning at: Question (TCO D) The principle of ethical behavior in the AICPA Code that asks questions directly related to ethical behavior is: Question (TCO D) Under the Sarbanes-Oxley Act, the auditor’s responsibility with respect to internal controls can best be stated as: Question (TCO D) A CPA who informs management of a material misstatement in the financial statements can go to the SEC with his/her concerns if: Page 2 – Explanatory Question (TCO A) Susie, a newly graduated BBA in accounting, has started a job with the state budgeting office. Susie has been placed over expense accounts. The state has a travel policy stating that a state employee may be reimbursed up to $90 per night for a hotel room and up to $40 per day for meals, as long as the employee turns in food receipts. On the first expense account Susie works on, the employee has a hotel receipt for $130 a night, but no food expenses. Susie processes the reimbursement for $90. The employee becomes irate as his reading of the travel policy is that he can be reimbursed for $130 a night for hotel and food with a receipt. The employee claims this has never been a problem in the past and has always been reimbursed $130 a night, whether for hotel only or both hotel and food. Discuss which ethical theory supports Susie and the employee’s take on the travel policy. Which would you choose, and why? Question (TCO B) An Internet company has a chance to expand its business into a developing country. This chance would make money for its shareholders, as it would be the first Internet company allowed in the country. However, the conditions demanded by the country is that the Internet company must turn over to the government the history of Internet sites visited by its citizens. Additionally, the company must censor Internet sites requested through the search engine. In the United States and other countries, the Internet company would not monitor, censor, or turn over a history of Internet sites to any government. What should the Internet company do? Use ethical theories and ethical decision-making models to back up your decision. Question (TCO C) Paul is quickly moving up in the accounting department of RAC Inc. It is year-end; he has just received news that the estimates of the estimated useful life and salvage values were wrong and must be changed. Of course, that changes the depreciation expense and accumulated depreciation. Paul calls his wife to explain why he will be late again. Upon the conversation, he is pondering on a comment his wife made; she said, “I’m no accountant, but after four years, you would think that the company could get done how its estimates affect expenses and those other accounts.” What might the company be doing, and what should Paul do from an ethical reasoning view? Question (TCO D) A young man by the name of Mr. Meeks works at an accounting firm that has a written ethics code of conduct. The code specifically outlines the duties and obligations that every employee must follow without question. One of rules states that every accountant should not lie under any circumstances. Last week, Mr. Meeks sent out a finalized tax return to Wrong………………….The partner grinned and told Mr. Meeks that the next time this happens, he should consult with the partner first. Using the ethical decision-making model and ethical theories, justify the positions of either the partner, Mr. Meeks, or an alternative solution. [Show More]

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