1. Sam is a financial manager who has discovered that her company is violating environment regulations. If her immediate superior is involved, her appropriate action is to

A. Do nothing since she has a duty of loyalty to the organization.

B. Consult the audit committee.

C. Present the matter to the next higher managerial level.

D. Confront her immediate superior.

-Justify the Choice C and Explain why Choice A B and D are wrong.

2. If a financial manager/ management accountant discovers unethical conduct in his/he organization and fails to act, (s)he will be in violation of which ethical standard(s)?

A. "Actively or Passively subvert the attainment of the organization's legitimate and ethical objectives."

B. "Communicate unfavorable as well as favorable information."

C. "Condone the commission of such acts by others within their organizations."

D. All of the answers are correct

-Justify the Choice D.

3. Corporate social responsibility is

A. Effectively enforced through the controls envisioned by classical economics.

B. Defined as the obligation to shareholders to earn profit.

C. More than the obligation to shareholders to earn a profit.

D. Defined as the obligation to serve long-term, organizational interests.

-Justify the Choice C and Explain why Choice A B and D are wrong.

4. A common argument against corporate involvement in socially responsible behavior is that

A. It encourages government intrusion in decision making.

B. As a legal person, a corporation is accountable for its conduct.

C. It creates goodwill.

D. In a competitive market, such behavior incurs costs that place the company at a disadvantage.

-Justify the Choice D and Explain why Choice A B and C are wrong.

5. The code of ethics for Management Accountants requires a financial manager/management accountant to follow the established policies of the organization when faced with an ethical conflict. If these policies do not resolve the conflict, the financial manager/management accountant should

A. Consult the board of directors immediately.

B. Discuss the problem with the immediate superior if (s)he is involved in the conflict.

C. Communicate the problem to authorities outside the organization.

D. Contact the next higher managerial level if initial presentation to the immediate superior does not resolve the conflict.

-Justify the Choice D and Explain why Choice A B and C are wrong.

6. Financial managers/management accountants are obligated to maintain the highest standards of ethical conduct. Accordingly, the Code of Ethics for Management Accountants explicitly requires that they

A. Obtain sufficient competent evidence when expressing an opinion.

B. Not condone violations by others.

C. Comply with the generally accepted auditing standards.

D. Adhere to generally accepted accounting principles.

-Justify the Choice B and Explain why Choice A C and D are wrong.

7. Integrity is an ethical requirement for all financial managers/management accountant. One aspect of integrity requires

A. Performance of professional duties in accordance with the applicable laws.

B. Avoidance of conflict of interest.

C. Refrain from improper use of inside information.

D. Maintenance of appropriate level of professional competence.

-Justify the Choice B and Explain why Choice A C and D are wrong.