CH 16

ch16
Student: ___________________________________________________________________________
1. Bells characteristics of a professional include the ability to think in which of the following ways?
A.
B.
C.
D.
Rationally
Logically
Coherently
All of the above
2. Bells characteristics of a professional include the ability to recognize the influence of:
A.
B.
C.
D.
Political and social forces.

Economic forces.
Legal and regulatory forces.
All of the above.
3. McDonald wrote that professionals utilize a specialized knowledge base. Which of the following is the best
example of the specialized knowledge base in accounting?
A.
B.
C.
D.
Reconciling a bank statement

Writing a check
Making adjusting entries
Using spreadsheet software
4. McDonald wrote that professionals utilize complex skills. Complex skills in accounting include:
A.
B.
C.
D.
Totaling the columns in a trial balance.

Listing the three sections of a balance sheet.
Recommending internal controls for a business process.
Filing tax returns electronically.
5. Which of the following demonstrates the least professional behavior based on Bells characteristics?
A.
B.
C.
D.
Developing a presentation based on the characteristics of the audience

Correctly applying FASB standards for short-term investments
Completing continuing professional education courses
Ignoring principles from management and finance
6. As professionals, accountants often use a specialized knowledge base. That specialized knowledge base can
come from:
A.
B.
C.
D.
FASB pronouncements.
Textbooks in accounting and other fields.
Both A and B.
Neither A nor B.
7. Depreciation is the periodic allocation of an assets cost to the periods which benefit from the assets use.
That statement is an example of:
A.
B.
C.
D.
Technical knowledge.
A specialized knowledge base.
Both A and B.
Neither A nor B.
8. According to Bell, accountants should recognize the influence of:

A.
B.
C.
D.
The Sarbanes-Oxley Act of 2002.

Foreign currency exchange rates.
Both A and B.
Neither A nor B.
9. Bumble Beasley remarked: The only way to be an accounting professional is to earn a CPA license.
Which of the following statements is most true?
A.
B.
C.
D.
There are many ways to be an accounting professional.

All accounting professionals have degrees in accounting.
Both A and B.
Neither A nor B.
10. One mark of a professional is adherence to a code of ethical behavior. Which of the following statements is
most true?
A. As the phrase is used in accounting, code of ethical behavior refers to utilitarianism and other schools of
ethical thought.
B. As the phrase is used in accounting, code of ethical behavior refers to meta-ethics.
C. Both A and B are true.
D. Neither A nor B is true.
11. McDonald stated that professionals have autonomy of practice. In the accounting profession, autonomy of
practice has been limited by:
A.
B.
C.
D.
FASB.
COSO.
PCAOB.
All of the above.
12. The PCAOB has:

A.
B.
C.
D.
Eliminated autonomy of practice in the accounting profession.

Limited autonomy of practice in the accounting profession.
Had no effect on autonomy of practice in the accounting profession.
Worked with FASB to enhance autonomy of practice in the accounting profession.
13. According to Bell, a professional integrates knowledge from many disciplines. Accounting information
systems integrates knowledge from:
A.
B.
C.
D.
Accounting and finance.

Management and computer information systems.
Both A and B.
Neither A nor B.
14. According to Bell, a professional integrates knowledge from many disciplines. Knowledge about ethics
requires an accountant to integrate knowledge from:
A.
B.
C.
D.
Philosophy.
Communication.
Science.
Psychology.
15. Which of the following statements best applies a characteristic of a professional in the context of
accounting?
A. Raul, a licensed CPA, learned to speak a foreign language in preparation for his firms expansion into
Europe.
B. Paula, a corporate accountant, studied the roles men and women play in business in Egypt.
C. Both A and B.
D. Neither A nor B.
accounting?
A. Beverly, a government accountant, prepared two versions of a presentation on governmental financial
statements to deliver to two different audiences.
B. Mark, a corporate accountant, resolved an ethical dilemma based on the IMA code of ethics.
C. Both A and B.
D. Neither A nor B.
17. Which of the following best pairs a characteristic of a professional with an example of that characteristic?
A. Appropriately uses technical knowledge, closed nominal accounts at the end of the fiscal year
B. Integrates knowledge from many disciplines, closed nominal accounts at the end of the fiscal year
C. Appropriately uses technical knowledge, prepared a schedule of cash receipts and cash payments in Excel
D. Integrates knowledge from many disciplines, prepared a schedule of cash receipts and cash payments in
Excel
A.
B.
C.
D.
Communicates effectively, selects software using the weighted-rating model

Integrates knowledge from many disciplines, completes the steps in the systems development life cycle
Communicates effectively, analyzes internal controls in the sales / collection process
Integrates knowledge from many disciplines, gives two examples of COSO documents
19. Which of the following pairs provides examples of integrating knowledge from other disciplines in
accounting?
A. Completes the steps in the systems development life cycle, applies expectancy theory to improve motivation
B. Selects software using the weighted-rating model, analyzes internal controls in the sales / collection process
C. Analyzes internal controls in the sales / collection process, applies expectancy theory to improve motivation
D. Prepares a schedule of cash receipts in Excel, gives two examples of COSO documents
20. Which of the following pairs provides examples of appropriately using technical knowledge in accounting?
A.
B.
C.
D.
Closing nominal accounts at the end of the year, reconciling a bank statement
Closing nominal accounts at the end of the year, using Steps for Better Thinking
Reconciling a bank statement, using Steps for Better Thinking
Adjusting the accounts for accrued revenue, applying complex FASB standards
21. Ethics:
A.
B.
C.
D.
Is another name for moral philosophy.

Involves systematizing, defending and recommending concepts of right and wrong behavior.
Both A and B.
Neither A nor B.
22. Arriving at moral standards that regulate right and wrong conduct is called:
A.
B.
C.
D.
Metaethics.
Normative ethics.
Applied ethics.
Obeying the law.
23. Examples of normative ethics include:

A.
B.
C.
D.
The AICPA Code of Professional Conduct.

The ethics code of the Association of Certified Fraud Examiners.
Both A and B.
Neither A nor B.
24. Which of the following tasks involves metaethics?

A.
B.
C.
D.
Analyzing historical versions of the AICPA Code of Professional Conduct.

Applying the code of ethics of the Institute of Management Accountants.
Both A and B.
Neither A nor B.
25. Consider the following statements as you respond to the next question:
A.
B.
C.
D.
Jose and Julie only

Jose, Lynn and Julie only
Jose and Lynn only
All of the statements involve ethics as the term is defined in the text.
A.
B.
C.
D.
Jose and Gerhardt only

Julie and Gerhardt only
Jose and Julie only
Jose, Julie and Gerhardt
A.
B.
C.
D.
Jose and Julie

Amelia and Gerhardt
Lynn and Gerhardt
All of the above
The Internet Encyclopedia of Philosophy explained that ethics can be divided into three general subject areas. Which of the following pairs includes
two examples of different areas?
A.
B.
C.
D.
Jose and Julie

Amelia and Lynn
Gerhardt and Lynn
All of the above
A.
B.
C.
D.
Applied ethics, Gerhardt

Metaethics, Julie
Metaethics, Lynn
Normative ethics, Gerhardt
A.
B.
C.
D.
Normative ethics, Amelia

Normative ethics, Lynn
Both A and B
Neither A nor B
31. Which school of ethical thought follows the belief that the ends justify the means?
A.
B.
C.
D.
Utilitarian
Rights and duties
Justice
Virtues
32. Which school of ethical thought follows the belief that everyone should be given what they deserve?
A.
B.
C.
D.
Utilitarian
Rights and duties
Justice
Virtues
33. Which of the following statements is most reflective of the virtues school of ethical thought?
A.
B.
C.
D.
Stealing is wrong.
Everyone has the right to steal.
Both A and B
Neither A nor B
34. Which of the following statements is most reflective of the utilitarian school of ethical thought?
A.
B.
C.
D.
Lying is wrong.
Lying is OK if its done to avoid hurting someones feelings.
Both A and B
Neither A nor B
35. Normative ethics can follow which school of ethical thought?

A.
B.
C.
D.
Utilitarian or justice
Rights and duties
Virtues
Any of the above
36. Fred embezzled money from his employer. When Susan, his co-worker, confronted him, Fred told her she
should mind her own business. Which school of ethical thought best describes Freds response?
A.
B.
C.
D.
Utilitarian
Rights and duties
Normative
Applied
37. Under which school of ethical thought could someone justify stealing inventory from their employer?
A.
B.
C.
D.
Utilitarian or justice only

Justice or virtues only
Utilitarian or virtues only
Utilitarian, justice or virtues
38. Which of the following statements about schools of ethical thought is most true?
A. A specific action, such as stealing, might be considered ethical under one school but unethical under another.
B. A specific action, such as stealing, might be considered ethical under more than one school, but for different
reasons.
39. Lee was caught using a work computer for an inappropriate personal purpose. He commented: I wasnt
hurting anyone, since I was on my lunch break. Lees justification indicates that he is following which school
of ethical thought?
A.
B.
C.
D.
Rights and duties

Utilitarian
Virtues
Normative
40. Joan asked to be compensated for work she had voluntarily done at home, although she had no written
proof of the work. She is most likely following which school of ethical thought with respect to her request for
compensation?
A.
B.
C.
D.
Justice
Virtues
Applied
Normative
41. Following the Langenderfer and Rockness model for resolving ethical dilemmas, which of the following
steps should happen first?
A.
B.
C.
D.
Identify the ethics issues and stakeholders involved.

Identify the alternative courses of action.
Identify the facts.
Define norms related to the situation.
42. Following the Mintz and Morris model for resolving ethical dilemmas, which of the following steps should
occur last?
A.
B.
C.
D.
Frame the ethical issue.

Identify the stakeholders and obligations.
Identify the operational issues.
Reflect on your decision.
43. A department manager might be involved in which steps of the Langenderfer and Rockness model for
resolving ethical dilemmas?
A.
B.
C.
D.
Step two only

Step seven only
Either Step two or step seven
Neither step two nor step seven
44. The third step of the Mintz and Morris model for resolving ethical dilemmas could involve:
A.
B.
C.
D.
Customers.
Employees.
Either or both of the above.
None of the above.
45. Joey is the vice president of corporate ethics at NCD Corporation. In a recent case of fraud discovered at
NCD, Joey considered whether he should fire the employee who committed the fraud, require repayment of the
funds stolen or both. Following the Langenderfer and Rockness model, Joeys next action should be:
A.
B.
C.
D.
To determine which school of ethical thought he follows.

To complete a cost / benefit analysis of each action.
To decide what he should do.
To determine which school of ethical thought the employee follows.
46. Joey is the vice president of corporate ethics at NCD Corporation. Through an anonymous hotline, he
received a tip that Tom, also an NCD employee, had unfairly terminated an employee in his department. Based
on the Mintz and Morris model for resolving ethical dilemmas, what should Joey do first?
A.
B.
C.
D.
Determine whether the termination is an ethics issue.

Determine whether the allegation is true.
Confront Tom.
Interview the terminated employee.
47. Langender and Rockness proposed an eight-step model for resolving ethical dilemmas; Mintz and Morris
proposed a ten-step model. Which of the following statements is most true?
A.
B.
C.
D.
The second step in Langenderfer and Rockness is similar to the third step in Mintz and Morris.
The second step in Langenderfer and Rockness is similar to the second step in Mintz and Morris.
Both A and B are true.
Neither A nor B is true.
A.
B.
C.
D.
The Mintz and Morris model is better because it involves more steps.
The Langenderfer and Rockness model is better because it involves fewer steps.
The two models will always result in the same decision.
None of the above statements is true.
A. The ethics codes of professional accounting organizations will be involved in the third step of the
Langenderfer and Rockness model.
B. The ethics codes of professional accounting organizations will be involved in the fourth step of the Mintz
and Morris model.
A. The Mintz and Morris model specifically discourages thoughtful consideration of a choice after an ethical
dilemma is resolved.
B. The Mintz and Morris model is focused more specifically on accounting ethics than the Langenderfer and
Rockness model.
51. Supply the missing words / phrases below based on the definition of ethics in the text.
The field of ethics, also called (a), involves systematizing, defending, and recommending concepts of right and
wrong behavior. (b)investigates where our ethical principles come from, and what they mean. (c)takes on a
more practical task, which is to arrive at moral standards that regulate right and wrong conduct. Finally,
(d)involves examining specific controversial issues.
________________________________________
52. The steps in the Mintz and Morris model for making ethical decisions are listed below. Number them in the
order of their occurrence based on the information in the text.
____
____
____
____
53. Bells characteristics of a professional are listed below on the right. Match each example on the left with
the most appropriate characteristic on the right. Use each characteristic exactly once.
1. Samantha compared the costs

and benefits of a set of internal
controls.
2. Joshua calculated straight-line
depreciation.
3. Robert refused to falsify a tax
return.
4. Albert wrote an e-mail to a
prospective new client.
5. Hal participated in an online
conference about tax law changes.
6. Jordan considered the impact of
foreign currency exchange rates on
an investment.
7. Maria used the systems
development life cycle to design a
new AIS.
c. Communicates effectively
a. Actively seeks additional
knowledge
f. Recognizes the influence of
political, social, economic, legal and
regulatory forces
b. Appropriately uses technical
knowledge
e. Integrates knowledge from
many disciplines
____
____
____
____
____
d. Exhibits ethical professional

behavior ____
g. Thinks rationally, logically and
coherently ____
54. The chapter discussed four schools of ethical thought: (a) justice, (b) rights and duties, (c) utilitarian and
(d) virtues. Which school best describes each of the following independent items?
1. As long as a decision maker is not harming anyone, he should be able to do as he pleases.
2. Hassan told Rosie to 'mind her own business' when she discovered he had overestimated his expenses for a
recent business trip.
3. Peter embezzled cash from his employer to pay for his grandmother's medicine.
4. Rewards should be based on performance.
5. Rob believed that leaving out unfavorable information from a report was the same as lying, and therefore
would not do it.
6. Sarah prepared a graph of her division's profits to use when asking her supervisor for a raise.
7. Stealing is immoral.
8. The outcome of a decision is more important than the decision itself.
55. Bell identified seven criteria to be a professional. Which criterion applies to each independent situation
below?
1) Albert wrote an e-mail to a prospective new client.
2) David used time value of money principles to calculate the price of a bond.
3) Hal participated in an online conference about tax law changes.
4) Jordan considered the impact of foreign currency exchange rates on an investment.
5) Joshua calculated straight-line depreciation.
6) Maria used the systems development life cycle to design a new AIS.
7) Peggy completed the annual continuing professional education requirements for her Certified Fraud
Examiner credential.
8) Robert refused to falsify a tax return.
9) Ryan prepared a written summary of tax rules for a client.
10) Samantha compared the costs and benefits of a set of internal controls.
56. Langenderfer and Rockness suggested an eight-step model for resolving ethical dilemmas. Consider each
of the independent statements that follow; indicate what would happen immediately after the action listed based
on the Langenderfer and Rockness model.
1) Arnold, having arrived at a decision about what to do, discussed his proposed action with a trusted coworker.
2) Beverly determined that a case she was investigating dealt with embezzling cash, which would impact the
companys employees and other groups.
3) Lenise laid out three potential responses for a violation of her companys ethics code.
4) Linda consulted the AICPA Code of Professional Conduct for an ethics issue raised by a co-worker.
5) Maria considered what would happen to various stakeholders for each of three alternatives she had
identified.
57. Consider each independent situation below. For each one, indicate the school of ethical thought the
decision maker is using; circle one word or phrase that led you to your conclusion.
1. Charles justified cheating on his income taxes based on the benefits his family would receive as a result.
2. Hassan told Rosie to mind her own business when she discovered he had overestimated his expenses for a
3. Peter embezzled cash from his employer to pay for his grandmothers medicine.
would not do it.
5. Sarah prepared a graph of her divisions profits to use when asking her supervisor for a raise.
58. The chapter discussed three subdivisions of the broad field of ethics: metaethics, normative ethics and
applied ethics. Indicate which of the following statements would relate to normative ethics as the term is used
in the accounting profession.
____ Alejandro reviewed the ethical code of the Institute of Management Accountants to determine what
action he should take when faced with an ethical dilemma.
____ Jim, the chief financial officer of BRT Corporation, is a licensed certified public accountant. He
reviewed the provisions of the Sarbanes-Oxley Act to determine the consequences he could face for not
fulfilling his ethical obligations under the Act.
____ Jodie, a certified fraud examiner, compared historical versions of the Association of Certified Fraud
Examiners ethical code with the current version to gain an understanding of how the code was developed.
____ Kristin is a certified information systems auditor. She called the AICPAs ethics hotline to discuss a
potential ethical violation by Stewart, a co-worker and licensed certified public accountant.
____ Louise, a Certified Public Accountant, discussed the issue of capital punishment with a group of coworkers at her firm.
____ Melissa, an internal auditor for the City of Bufflufia, looked up the Mintz and Morris model for guidance
in resolving an ethics issue.
59. Bell suggested seven characteristics necessary to be considered a professional. Revise each statement
below to more appropriately reflect one of those characteristics; indicate the relevant characteristic in the space
provided.
Original statement
Daryl delivered the same presentation on

pension accounting to a group of experienced
CPAs and a group of retired teachers.
In completing his required continuing

professional education for CPA licensure, Jack
repeated courses he had taken while in college.
Opal ignored clear evidence that her co-worker

was participating in a Ponzi scheme.
When asked what impact an unstable

government might have on foreign currency
exchange rates, Marie stated it would have no
impact at all.
A piece of equipment had a cost of $10,000,

salvage value of $2,000 and an expected useful
life of four years. Thomas calculated straightline depreciation at $2,500 per year.
Revised statement
Bell characteristic
60. McDonald suggested four characteristics necessary to be considered a professional. Revise each statement
provided.
Original statement
a. Joey ignored his companys standard audit

practices and invented his own to make audits
more efficient.
b. Nancy told a client that the salvage value of

fixed assets should always be set to zero for the
purpose of calculating depreciation.
c. May, a certified public accountant, made an

agreement with an audit client to make the
clients financial statements look as good as
possible.
d. Elliott is the corporate controller of ARI

Corporation. He referred to the AICPA Code of
Professional Conduct in resolving an ethical
dilemma related to budgeting.
Revised statement
McDonald characteristic
61. List the four characteristics suggested by McDonald to be considered a professional.
62. In your own words, define the following terms: ethics, metaethics, normative ethics, applied ethics. Give
an example with each definition.
63. Miguel had just been promoted to Director of Accounts Receivable in the accounting department of TPC
Corporation. His first responsibility was to develop and explain a better system for estimating and writing off
bad debts. Without referring to the technical aspects of those tasks, discuss four things Miguel should do based
on Bells characteristics of a professional.
64. Taylor became aware of a serious ethical breach in her company related to a small group of managers
recording sales revenue inappropriately. She called a meeting of all the managers in the company and told them
to confess or else. The managers, particularly those who had not committed any ethical breach, became very
angry and the meeting ended in chaos.
Analyze Taylors actions. Suggest a better approach for dealing with the ethics issue in her company; ensure
that your suggestions are clearly applied to Taylors situation.
recording sales revenue inappropriately. In interviewing those managers about the issue, Taylor asked each one
why they had committed the ethical breach.
Use two of the four schools of ethical thought discussed in the text to create brief responses the managers
would have given Taylor. For each response, indicate the relevant school of ethical thought.
ch16 Key
1. Bells characteristics of a professional include the ability to think in which of the following ways?
A.
B.
C.
D.
Rationally
Logically
Coherently
All of the above
BLOOM: Knowledge
Difficulty: Easy
Hurt - Chapter 16 #1
LO 1
2. Bells characteristics of a professional include the ability to recognize the influence of:
A.
B.
C.
D.
Political and social forces.

Economic forces.
Legal and regulatory forces.
All of the above.
BLOOM: Knowledge
Difficulty: Easy
LO 1
3. McDonald wrote that professionals utilize a specialized knowledge base. Which of the following is the best
example of the specialized knowledge base in accounting?
A.
B.
C.
D.
Reconciling a bank statement

Writing a check
Making adjusting entries
Using spreadsheet software
BLOOM: Comprehension
Difficulty: Medium
LO 1
4. McDonald wrote that professionals utilize complex skills. Complex skills in accounting include:
A.
B.
C.
D.
Totaling the columns in a trial balance.

Listing the three sections of a balance sheet.
Recommending internal controls for a business process.
Filing tax returns electronically.
Difficulty: Medium
LO 1
5. Which of the following demonstrates the least professional behavior based on Bells characteristics?
A.
B.
C.
D.
Developing a presentation based on the characteristics of the audience

Correctly applying FASB standards for short-term investments
Completing continuing professional education courses
Ignoring principles from management and finance
BLOOM: Application
Difficulty: Medium
LO 1
6. As professionals, accountants often use a specialized knowledge base. That specialized knowledge base can
come from:
A.
B.
C.
D.
FASB pronouncements.
Textbooks in accounting and other fields.
Both A and B.
Neither A nor B.
BLOOM: Application
Difficulty: Medium
LO 1
7. Depreciation is the periodic allocation of an assets cost to the periods which benefit from the assets use.
That statement is an example of:
A.
B.
C.
D.
Technical knowledge.
A specialized knowledge base.
Both A and B.
Neither A nor B.
BLOOM: Analysis
Difficulty: Hard
LO 1
8. According to Bell, accountants should recognize the influence of:

A.
B.
C.
D.
The Sarbanes-Oxley Act of 2002.

Foreign currency exchange rates.
Both A and B.
Neither A nor B.
BLOOM: Analysis
Difficulty: Hard
LO 1
9. Bumble Beasley remarked: The only way to be an accounting professional is to earn a CPA license.
Which of the following statements is most true?
A.
B.
C.
D.
There are many ways to be an accounting professional.

All accounting professionals have degrees in accounting.
Both A and B.
Neither A nor B.
Bloom: Synthesis
Difficulty: Hard
LO 1
10. One mark of a professional is adherence to a code of ethical behavior. Which of the following statements is
most true?
A. As the phrase is used in accounting, code of ethical behavior refers to utilitarianism and other schools of
ethical thought.
B. As the phrase is used in accounting, code of ethical behavior refers to meta-ethics.
Bloom: Synthesis
Difficulty: Hard
LO 1
11. McDonald stated that professionals have autonomy of practice. In the accounting profession, autonomy of
practice has been limited by:
A.
B.
C.
D.
FASB.
COSO.
PCAOB.
All of the above.
BLOOM: Knowledge
Difficulty: Easy
LO 2
12. The PCAOB has:

A.
B.
C.
D.
Eliminated autonomy of practice in the accounting profession.

Limited autonomy of practice in the accounting profession.
Had no effect on autonomy of practice in the accounting profession.
Worked with FASB to enhance autonomy of practice in the accounting profession.
BLOOM: Knowledge
Difficulty: Easy
LO 2
13. According to Bell, a professional integrates knowledge from many disciplines. Accounting information
systems integrates knowledge from:
A.
B.
C.
D.
Accounting and finance.

Management and computer information systems.
Both A and B.
Neither A nor B.
Difficulty: Medium
LO 2
14. According to Bell, a professional integrates knowledge from many disciplines. Knowledge about ethics
requires an accountant to integrate knowledge from:
A.
B.
C.
D.
Philosophy.
Communication.
Science.
Psychology.
Difficulty: Medium
LO 2
accounting?
A. Raul, a licensed CPA, learned to speak a foreign language in preparation for his firms expansion into
Europe.
B. Paula, a corporate accountant, studied the roles men and women play in business in Egypt.
C. Both A and B.
D. Neither A nor B.
BLOOM: Application
Difficulty: Medium
LO 2
accounting?
A. Beverly, a government accountant, prepared two versions of a presentation on governmental financial
statements to deliver to two different audiences.
B. Mark, a corporate accountant, resolved an ethical dilemma based on the IMA code of ethics.
C. Both A and B.
D. Neither A nor B.
BLOOM: Application
Difficulty: Medium
LO 2
A. Appropriately uses technical knowledge, closed nominal accounts at the end of the fiscal year
B. Integrates knowledge from many disciplines, closed nominal accounts at the end of the fiscal year
C. Appropriately uses technical knowledge, prepared a schedule of cash receipts and cash payments in Excel
D. Integrates knowledge from many disciplines, prepared a schedule of cash receipts and cash payments in
Excel
BLOOM: Analysis
Difficulty: Hard
LO 2
A.
B.
C.
D.
Communicates effectively, selects software using the weighted-rating model

Integrates knowledge from many disciplines, completes the steps in the systems development life cycle
Communicates effectively, analyzes internal controls in the sales / collection process
Integrates knowledge from many disciplines, gives two examples of COSO documents
BLOOM: Analysis
Difficulty: Hard
LO 2
19. Which of the following pairs provides examples of integrating knowledge from other disciplines in
accounting?
A. Completes the steps in the systems development life cycle, applies expectancy theory to improve motivation
B. Selects software using the weighted-rating model, analyzes internal controls in the sales / collection process
C. Analyzes internal controls in the sales / collection process, applies expectancy theory to improve motivation
D. Prepares a schedule of cash receipts in Excel, gives two examples of COSO documents
Bloom: Synthesis
Difficulty: Hard
LO 2
20. Which of the following pairs provides examples of appropriately using technical knowledge in accounting?
A.
B.
C.
D.
Closing nominal accounts at the end of the year, reconciling a bank statement
Closing nominal accounts at the end of the year, using Steps for Better Thinking
Reconciling a bank statement, using Steps for Better Thinking
Adjusting the accounts for accrued revenue, applying complex FASB standards
Bloom: Synthesis
Difficulty: Hard
LO 2
21. Ethics:
A.
B.
C.
D.
Is another name for moral philosophy.

Involves systematizing, defending and recommending concepts of right and wrong behavior.
Both A and B.
Neither A nor B.
BLOOM: Knowledge
Difficulty: Easy
lo 3
22. Arriving at moral standards that regulate right and wrong conduct is called:
A.
B.
C.
D.
Metaethics.
Normative ethics.
Applied ethics.
Obeying the law.
BLOOM: Knowledge
Difficulty: Easy
lo 3
23. Examples of normative ethics include:

A.
B.
C.
D.
The AICPA Code of Professional Conduct.

The ethics code of the Association of Certified Fraud Examiners.
Both A and B.
Neither A nor B.
Difficulty: Medium
lo 3
24. Which of the following tasks involves metaethics?

A.
B.
C.
D.
Analyzing historical versions of the AICPA Code of Professional Conduct.

Applying the code of ethics of the Institute of Management Accountants.
Both A and B.
Neither A nor B.
Difficulty: Medium
lo 3
A.
B.
C.
D.
Jose and Julie only

Jose, Lynn and Julie only
Jose and Lynn only
All of the statements involve ethics as the term is defined in the text.
BLOOM: Application
Difficulty: Medium
lo 3
A.
B.
C.
D.
Jose and Gerhardt only

Julie and Gerhardt only
Jose and Julie only
Jose, Julie and Gerhardt
BLOOM: Application
Difficulty: Medium
lo 3
A.
B.
C.
D.
Jose and Julie

Amelia and Gerhardt
Lynn and Gerhardt
All of the above
BLOOM: Analysis
Difficulty: Hard
lo 3
The Internet Encyclopedia of Philosophy explained that ethics can be divided into three general subject areas. Which of the following pairs includes
two examples of different areas?
A.
B.
C.
D.
Jose and Julie

Amelia and Lynn
Gerhardt and Lynn
All of the above
BLOOM: Analysis
Difficulty: Hard
lo 3
A.
B.
C.
D.
Applied ethics, Gerhardt

Metaethics, Julie
Metaethics, Lynn
Normative ethics, Gerhardt
Bloom: Synthesis
Difficulty: Hard
lo 3
A.
B.
C.
D.
Normative ethics, Amelia

Normative ethics, Lynn
Both A and B
Neither A nor B
Bloom: Synthesis
Difficulty: Hard
lo 3
31. Which school of ethical thought follows the belief that the ends justify the means?
A.
B.
C.
D.
Utilitarian
Rights and duties
Justice
Virtues
BLOOM: Knowledge
Difficulty: Easy
LO 4
32. Which school of ethical thought follows the belief that everyone should be given what they deserve?
A.
B.
C.
D.
Utilitarian
Rights and duties
Justice
Virtues
BLOOM: Knowledge
Difficulty: Easy
LO 4
33. Which of the following statements is most reflective of the virtues school of ethical thought?
A.
B.
C.
D.
Stealing is wrong.
Everyone has the right to steal.
Both A and B
Neither A nor B
Difficulty: Medium
LO 4
34. Which of the following statements is most reflective of the utilitarian school of ethical thought?
A.
B.
C.
D.
Lying is wrong.
Lying is OK if its done to avoid hurting someones feelings.
Both A and B
Neither A nor B
Difficulty: Medium
LO 4
35. Normative ethics can follow which school of ethical thought?

A.
B.
C.
D.
Utilitarian or justice
Rights and duties
Virtues
Any of the above
BLOOM: Application
Difficulty: Medium
LO 4
36. Fred embezzled money from his employer. When Susan, his co-worker, confronted him, Fred told her she
should mind her own business. Which school of ethical thought best describes Freds response?
A.
B.
C.
D.
Utilitarian
Rights and duties
Normative
Applied
BLOOM: Application
Difficulty: Medium
LO 4
37. Under which school of ethical thought could someone justify stealing inventory from their employer?
A.
B.
C.
D.
Utilitarian or justice only

Justice or virtues only
Utilitarian or virtues only
Utilitarian, justice or virtues
BLOOM: Analysis
Difficulty: Hard
LO 4
38. Which of the following statements about schools of ethical thought is most true?
A. A specific action, such as stealing, might be considered ethical under one school but unethical under another.
B. A specific action, such as stealing, might be considered ethical under more than one school, but for different
reasons.
BLOOM: Analysis
Difficulty: Hard
LO 4
39. Lee was caught using a work computer for an inappropriate personal purpose. He commented: I wasnt
hurting anyone, since I was on my lunch break. Lees justification indicates that he is following which school
of ethical thought?
A.
B.
C.
D.
Rights and duties

Utilitarian
Virtues
Normative
Bloom: Synthesis
Difficulty: Hard
LO 4
40. Joan asked to be compensated for work she had voluntarily done at home, although she had no written
proof of the work. She is most likely following which school of ethical thought with respect to her request for
compensation?
A.
B.
C.
D.
Justice
Virtues
Applied
Normative
Bloom: Synthesis
Difficulty: Hard
LO 4
41. Following the Langenderfer and Rockness model for resolving ethical dilemmas, which of the following
steps should happen first?
A.
B.
C.
D.
Identify the ethics issues and stakeholders involved.

Identify the alternative courses of action.
Identify the facts.
Define norms related to the situation.
BLOOM: Knowledge
Difficulty: Easy
LO 5
42. Following the Mintz and Morris model for resolving ethical dilemmas, which of the following steps should
occur last?
A.
B.
C.
D.
Frame the ethical issue.

Identify the stakeholders and obligations.
Identify the operational issues.
Reflect on your decision.
BLOOM: Knowledge
Difficulty: Easy
LO 5
43. A department manager might be involved in which steps of the Langenderfer and Rockness model for
resolving ethical dilemmas?
A.
B.
C.
D.
Step two only

Step seven only
Either Step two or step seven
Neither step two nor step seven
Difficulty: Medium
LO 5
44. The third step of the Mintz and Morris model for resolving ethical dilemmas could involve:
A.
B.
C.
D.
Customers.
Employees.
Either or both of the above.
None of the above.
Difficulty: Medium
LO 5
45. Joey is the vice president of corporate ethics at NCD Corporation. In a recent case of fraud discovered at
NCD, Joey considered whether he should fire the employee who committed the fraud, require repayment of the
funds stolen or both. Following the Langenderfer and Rockness model, Joeys next action should be:
A.
B.
C.
D.
To determine which school of ethical thought he follows.

To complete a cost / benefit analysis of each action.
To decide what he should do.
To determine which school of ethical thought the employee follows.
BLOOM: Application
Difficulty: Medium
LO 5
46. Joey is the vice president of corporate ethics at NCD Corporation. Through an anonymous hotline, he
received a tip that Tom, also an NCD employee, had unfairly terminated an employee in his department. Based
on the Mintz and Morris model for resolving ethical dilemmas, what should Joey do first?
A.
B.
C.
D.
Determine whether the termination is an ethics issue.

Determine whether the allegation is true.
Confront Tom.
Interview the terminated employee.
BLOOM: Application
Difficulty: Medium
LO 5
A.
B.
C.
D.
The second step in Langenderfer and Rockness is similar to the third step in Mintz and Morris.
The second step in Langenderfer and Rockness is similar to the second step in Mintz and Morris.
Both A and B are true.
Neither A nor B is true.
BLOOM: Analysis
Difficulty: Hard
LO 5
A.
B.
C.
D.
The Mintz and Morris model is better because it involves more steps.
The Langenderfer and Rockness model is better because it involves fewer steps.
The two models will always result in the same decision.
None of the above statements is true.
BLOOM: Analysis
Difficulty: Hard
LO 5
A. The ethics codes of professional accounting organizations will be involved in the third step of the
Langenderfer and Rockness model.
B. The ethics codes of professional accounting organizations will be involved in the fourth step of the Mintz
and Morris model.
Bloom: Synthesis
Difficulty: Hard
LO 5
A. The Mintz and Morris model specifically discourages thoughtful consideration of a choice after an ethical
dilemma is resolved.
B. The Mintz and Morris model is focused more specifically on accounting ethics than the Langenderfer and
Rockness model.
Bloom: Synthesis
Difficulty: Hard
LO 5
51. Supply the missing words / phrases below based on the definition of ethics in the text.
The field of ethics, also called (a), involves systematizing, defending, and recommending concepts of right and
wrong behavior. (b)investigates where our ethical principles come from, and what they mean. (c)takes on a
more practical task, which is to arrive at moral standards that regulate right and wrong conduct. Finally,
(d)involves examining specific controversial issues.
a. moral philosophy b. metaethics c. normative ethics d. applied ethics
BLOOM: Knowledge
Difficulty: Easy
lo 3
52. The steps in the Mintz and Morris model for making ethical decisions are listed below. Number them in the
order of their occurrence based on the information in the text.
4
2
3
1
BLOOM: Knowledge
Difficulty: Easy
LO 5
53. Bells characteristics of a professional are listed below on the right. Match each example on the left with
the most appropriate characteristic on the right. Use each characteristic exactly once.
1. Samantha compared the costs and

benefits of a set of internal controls.
2. Joshua calculated straight-line
depreciation.
3. Robert refused to falsify a tax
return.
4. Albert wrote an e-mail to a
prospective new client.
5. Hal participated in an online
conference about tax law changes.
6. Jordan considered the impact of
foreign currency exchange rates on an
investment.
7. Maria used the systems
development life cycle to design a
new AIS.
Difficulty: Medium
LO 2
c. Communicates effectively
a. Actively seeks additional
knowledge
f. Recognizes the influence of
political, social, economic, legal and
regulatory forces
b. Appropriately uses technical
knowledge
e. Integrates knowledge from many
disciplines
4
5
6
2
7
d. Exhibits ethical professional

behavior 3
g. Thinks rationally, logically and
coherently 1
54. The chapter discussed four schools of ethical thought: (a) justice, (b) rights and duties, (c) utilitarian and
(d) virtues. Which school best describes each of the following independent items?
1. As long as a decision maker is not harming anyone, he should be able to do as he pleases.
2. Hassan told Rosie to 'mind her own business' when she discovered he had overestimated his expenses for a
3. Peter embezzled cash from his employer to pay for his grandmother's medicine.
4. Rewards should be based on performance.
would not do it.
6. Sarah prepared a graph of her division's profits to use when asking her supervisor for a raise.
7. Stealing is immoral.
8. The outcome of a decision is more important than the decision itself.
Difficulty: Medium
LO 4
55. Bell identified seven criteria to be a professional. Which criterion applies to each independent situation
below?
1) Albert wrote an e-mail to a prospective new client.
2) David used time value of money principles to calculate the price of a bond.
3) Hal participated in an online conference about tax law changes.
4) Jordan considered the impact of foreign currency exchange rates on an investment.
5) Joshua calculated straight-line depreciation.
6) Maria used the systems development life cycle to design a new AIS.
7) Peggy completed the annual continuing professional education requirements for her Certified Fraud
Examiner credential.
8) Robert refused to falsify a tax return.
9) Ryan prepared a written summary of tax rules for a client.
10) Samantha compared the costs and benefits of a set of internal controls.
BLOOM: Application
Difficulty: Medium
LO 1
56. Langenderfer and Rockness suggested an eight-step model for resolving ethical dilemmas. Consider each
of the independent statements that follow; indicate what would happen immediately after the action listed based
on the Langenderfer and Rockness model.
1) Arnold, having arrived at a decision about what to do, discussed his proposed action with a trusted coworker.
2) Beverly determined that a case she was investigating dealt with embezzling cash, which would impact the
companys employees and other groups.
3) Lenise laid out three potential responses for a violation of her companys ethics code.
4) Linda consulted the AICPA Code of Professional Conduct for an ethics issue raised by a co-worker.
5) Maria considered what would happen to various stakeholders for each of three alternatives she had
identified.
BLOOM: Application
Difficulty: Medium
LO 5
57. Consider each independent situation below. For each one, indicate the school of ethical thought the
decision maker is using; circle one word or phrase that led you to your conclusion.
1. Charles justified cheating on his income taxes based on the benefits his family would receive as a result.
2. Hassan told Rosie to mind her own business when she discovered he had overestimated his expenses for a
3. Peter embezzled cash from his employer to pay for his grandmothers medicine.
would not do it.
5. Sarah prepared a graph of her divisions profits to use when asking her supervisor for a raise.
BLOOM: Analysis
Difficulty: Hard
LO 4
58. The chapter discussed three subdivisions of the broad field of ethics: metaethics, normative ethics and
applied ethics. Indicate which of the following statements would relate to normative ethics as the term is used
in the accounting profession.
__X__ Alejandro reviewed the ethical code of the Institute of Management Accountants to determine what
action he should take when faced with an ethical dilemma.
__X__ Jim, the chief financial officer of BRT Corporation, is a licensed certified public accountant. He
reviewed the provisions of the Sarbanes-Oxley Act to determine the consequences he could face for not
fulfilling his ethical obligations under the Act.
_____ Jodie, a certified fraud examiner, compared historical versions of the Association of Certified Fraud
Examiners ethical code with the current version to gain an understanding of how the code was developed.
__X__ Kristin is a certified information systems auditor. She called the AICPAs ethics hotline to discuss a
potential ethical violation by Stewart, a co-worker and licensed certified public accountant.
_____ Louise, a Certified Public Accountant, discussed the issue of capital punishment with a group of coworkers at her firm.
_____ Melissa, an internal auditor for the City of Bufflufia, looked up the Mintz and Morris model for
guidance in resolving an ethics issue.
BLOOM: Analysis
Difficulty: Hard
lo 3
59. Bell suggested seven characteristics necessary to be considered a professional. Revise each statement
provided.
Original statement
Daryl delivered the same presentation on

pension accounting to a group of experienced
CPAs and a group of retired teachers.
In completing his required continuing

professional education for CPA licensure, Jack
repeated courses he had taken while in college.
Opal ignored clear evidence that her co-worker

was participating in a Ponzi scheme.
Revised statement
Bell characteristic
When asked what impact an unstable

government might have on foreign currency
exchange rates, Marie stated it would have no
impact at all.
A piece of equipment had a cost of $10,000,

salvage value of $2,000 and an expected useful
life of four years. Thomas calculated straightline depreciation at $2,500 per year.
Bloom: Synthesis
Difficulty: Hard
LO 2
60. McDonald suggested four characteristics necessary to be considered a professional. Revise each statement
provided.
Original statement
a. Joey ignored his companys standard audit

practices and invented his own to make audits
more efficient.
b. Nancy told a client that the salvage value of

fixed assets should always be set to zero for the
purpose of calculating depreciation.
c. May, a certified public accountant, made an

agreement with an audit client to make the
clients financial statements look as good as
possible.
Revised statement
McDonald characteristic
d. Elliott is the corporate controller of ARI

Corporation. He referred to the AICPA Code of
Professional Conduct in resolving an ethical
dilemma related to budgeting.
Bloom: Synthesis
Difficulty: Hard
LO 1
61. List the four characteristics suggested by McDonald to be considered a professional.
BLOOM: Knowledge
Difficulty: Easy
LO 1
62. In your own words, define the following terms: ethics, metaethics, normative ethics, applied ethics. Give
an example with each definition.
Difficulty: Medium
lo 3
63. Miguel had just been promoted to Director of Accounts Receivable in the accounting department of TPC
Corporation. His first responsibility was to develop and explain a better system for estimating and writing off
bad debts. Without referring to the technical aspects of those tasks, discuss four things Miguel should do based
on Bells characteristics of a professional.
BLOOM: Application
Difficulty: Medium
LO 2
recording sales revenue inappropriately. She called a meeting of all the managers in the company and told them
to confess or else. The managers, particularly those who had not committed any ethical breach, became very
angry and the meeting ended in chaos.
Analyze Taylors actions. Suggest a better approach for dealing with the ethics issue in her company; ensure
that your suggestions are clearly applied to Taylors situation.
BLOOM: Analysis
Difficulty: Hard
LO 5
recording sales revenue inappropriately. In interviewing those managers about the issue, Taylor asked each one
why they had committed the ethical breach.
Use two of the four schools of ethical thought discussed in the text to create brief responses the managers
would have given Taylor. For each response, indicate the relevant school of ethical thought.
Bloom: Synthesis
Difficulty: Hard
LO 4
ch16 Summary
Category
# of Questions
BLOOM: Analysis
13
BLOOM: Application
13
13
BLOOM: Knowledge
13
Bloom: Synthesis
13
Difficulty: Easy
13
Difficulty: Hard
26
Difficulty: Medium
26
Hurt - Chapter 16
65
LO 1
13
LO 2
13
lo 3
13
LO 4
13
LO 5
13

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Political and social forces.

Reconciling a bank statement

Totaling the columns in a trial balance.

Developing a presentation based on the characteristics of the audience

8. According to Bell, accountants should recognize the influence of:

The Sarbanes-Oxley Act of 2002.

There are many ways to be an accounting professional.

12. The PCAOB has:

Eliminated autonomy of practice in the accounting profession.

Accounting and finance.

Communicates effectively, selects software using the weighted-rating model

Is another name for moral philosophy.

23. Examples of normative ethics include:

The AICPA Code of Professional Conduct.

24. Which of the following tasks involves metaethics?

Analyzing historical versions of the AICPA Code of Professional Conduct.

Jose and Julie only

Jose and Gerhardt only

Jose and Julie

Jose and Julie

Applied ethics, Gerhardt

Normative ethics, Amelia

35. Normative ethics can follow which school of ethical thought?

Utilitarian or justice only

Rights and duties

Identify the ethics issues and stakeholders involved.

Frame the ethical issue.

Step two only

To determine which school of ethical thought he follows.

Determine whether the termination is an ethics issue.

1. Samantha compared the costs

d. Exhibits ethical professional

Daryl delivered the same presentation on

In completing his required continuing

Opal ignored clear evidence that her co-worker

When asked what impact an unstable

A piece of equipment had a cost of $10,000,

a. Joey ignored his companys standard audit

b. Nancy told a client that the salvage value of

c. May, a certified public accountant, made an

d. Elliott is the corporate controller of ARI

61. List the four characteristics suggested by McDonald to be considered a professional.

Political and social forces.

Reconciling a bank statement

Totaling the columns in a trial balance.

Developing a presentation based on the characteristics of the audience

8. According to Bell, accountants should recognize the influence of:

The Sarbanes-Oxley Act of 2002.

There are many ways to be an accounting professional.

12. The PCAOB has:

Eliminated autonomy of practice in the accounting profession.

Accounting and finance.

Communicates effectively, selects software using the weighted-rating model

Is another name for moral philosophy.

23. Examples of normative ethics include:

The AICPA Code of Professional Conduct.

24. Which of the following tasks involves metaethics?

Analyzing historical versions of the AICPA Code of Professional Conduct.

Jose and Julie only

Jose and Gerhardt only

Jose and Julie