Question: 1. Should inside traders, who are non-

> 1. Should the chair of the board of directors be allowed to initiate investigations into weaknesses in a company’s internal control systems? 2. Is the strategy of pretexting an acceptable means in order to obtain critical information that will strengthen

> 1. Was this an ethically correct sales pitch? Were the lenders taking advantage of financially naive customers? 2. Should the investors now be upset that, as a result of the subprime mortgage meltdown, Merrill’s stock price fell by about 30 percent in 20

> 1. Describe the fraud that allegedly occurred through Sino-Forest Corporation Inc.? Who benefited and how? 2. Why did regulators not prevent this fraud from occurring? What were they relying on? 3. Why did the directors of Sino-Forest not prevent this fr

> 1. If selling pornography is legal, profitable, and readily available elsewhere, should Telus shut down its adult service? Why or why not? 2. Telus said that it wanted to be Canada’s premier corporate citizen. Should companies such as Telus feel obligate

> 1. The senior executives at Siemens’ spent most of their working environment that condoned bribery outside Germany but not inside. However, they failed to take notice of the changes that Transparency International – championed by a German who was embarra

> 1. Football is big business, raising millions and millions of dollars for American universities. Numerous administrators and officials at Pennsylvania State University put a higher value on college football than on the welfare of children. How would an o

> 1. Why would Nortel Networks, a Canadian company, hire a U.S. law firm to undertake an independent review of factors that led to restatement of accounting reports? 2. Why did the independent review focus on the “establishment and release of contractual

> 1. If the laws are strict in one country, but lax in another country, do cruise ship companies have an ethical obligation to follow the stricter laws even when they are temporarily sailing through the waters of a country with more lax regulations? 2. Man

> Answer the questions put to John in the case.

> 1. Did Jérôme Kerviel perpetrate a fraud? Why or why not? When such mammoth unauthorized trades occur, and the bank is bankrupted or severely damaged financially, should the board of directors, who have the ultimate responsibility for the bank’s activit

> 1. A vendor may offer a customer a rebate of a specified amount of cash or other consideration that is payable only if the customer completes a specified cumulative level of purchases or remains a customer for a specified period of time. When should the

> 1. Do you find it interesting that most of the critics were women and the media, but those who considered the app to be funny were young men? 2. The target market of AMP Energy is males between the ages of 18 and 24. If this group of consumers found the

> 1. What is your responsibility in each of these situations?

> 1. Do you think that it is ethical or unethical for Nestlé to drain the groundwater in the Millard Canyon spring during a drought? 2. Does Nestlé have an ethical obligation to disclose proprietary information, such as the amount of groundwater extracted

> 1. Should short selling be outlawed? 2. Should naked short selling be outlawed? 3. How would you describe the ethical cultures at Goldman Sachs and Merrill Lynch with respect to failed trades? 4. Short of wholesale firings, fines and jail terms, can you

> 1. Will the Satyam fraud damage India’s reputation as a reliable provider of information technology outsourcing? 2. How long will it take to restore Satyam Computer’s reputation, and how would you recommend that the restoration be facilitated? 3. Mr. Raj

> 1. Responsibility to the public 2. Credibility 3. Information Inductance 4. Basic and relative expertise of accountants

> The pressure for profit and for good client relations is very strong, but the temptation for short-term gain must be considered against the longer-term potential for loss.

> 1. What are the responsibilities of employees who become aware of unethical behavior by their superiors? 2. What actions should be taken by corporate leaders when they receive reports of sexual abuse? Why? 3. If unethical or illegal behavior occurs withi

> 1. What conditions appear to have allowed the Parmalat situation to get out of control? 2. What specific audit procedures could have uncovered the fraud earlier? 3. What audit steps should Deloitte have taken with regard to the seventeen off-shore subsid

> What is your advice?

> 1. The culture of giving and receiving payments is ingrained in China. On the other hand accepting and paying bribes is a violation of Rio Tinto’s code of conduct. When does a payment stop being a gift and turn into a bribe? 2. The smaller Chinese steel

> 1. Is it right that a CEO can direct the charitable donations of his company to the charity of his choice? 2. Comment on the ethical aspects of Pierre’s stock option/stock donation strategy. 3. If you were Gloria, what should you do? Would you change if

> 1. From a governance perspective, what can the Board of Directors do to make sure that the company’s policies and procedure are adequate to ensure ethical and legal conduct by its employees? 2. Mr. Aissa and Mr. Duhaime were not demonstrating strong ethi

> 1. Was the verdict fair? 2. Will this verdict cause other companies to review for and remedy any systematic discrimination uncovered? 3. How should systemic discrimination be prevented? 4. Were the lawyer’s fees fair? 5. Could this case have been success

> 1. Do you think that Dan Price’s decision to raise the minimum salary to $70,000 represented ethical leadership? 2. Do you think that Price should have arbitrarily increased the minimum salary to $70,000? 3. Should he have increased everyone’s salary, e

> 1. Should Ecuadorians be able to sue Texaco in U.S. courts? 2. If an oil spill was caused by an act of God, an earthquake, should Texaco be held responsible? 3. Do you find Texaco’s arguments against the lawsuits convincing? Why or why not?

> 1. Should Alex join the board of directors of Consolidated Mines International Inc.? 2. If Alex joins the board, should he vote in favour of continuing to make the payments to the United People’s Liberation Front? 3. What other options are available to A

> 1. How could the culture described be changed? 2. Who will need to cause this culture to change? 3. What will have to happen to cause this change? 4. Is it likely that Goldman Sachs will be able to hire the best and brightest recruits unless they change

> 1. What does an ethical analysis add to Viscusi`s actuarial analysis? 2. Would an ethical analysis change the conclusion reached? Why?

> 1. Is there a basic conflict of interest between upholding the public interest and providing tax advice that reduces the amount of money taxpayers pay to the government? Why or why not? 2. How can professional accountants maintain the support of the pub

> 1. What were the major flaws in HealthSouth’s corporate governance? 2 & 5. What should HealthSouth’s auditors, Ernst & Young, have done if they had perceived these flaws? What is the auditor’s responsibility in case of fraud? 3. How – in accounting terms

> 1. Is the NFL’s stance on controlling the harm of concussions ethical? 2. Should the NFL have moved earlier on the concussion problem? If so, when and how? 3. If the concussion problem had been analysed using virtue ethics, what would the analysis have i

> 1. How would you deal with a star trader who would be extremely sensitive to additional controls that implied he or she wasn’t trusted or would generate more time on paperwork and explanations? 2. What ethical and accounting controls would you advise IN

> 1. Given strong profit growth, has there been any damage to Baidu.com’s reputation? 2. What would future reputational damage affect, and how could it be measured? 3. What steps could Baidu.com take to restore its reputation, and what challenges will it h

> 1. General acceptance of accounting principles 2. Fairness in presentation 3. Economic realities 4. Credibility and trust in auditors

> 1. Why didn’t GM act effectively on suspicions that their ignition switches were faulty? 2. Who was at fault for the deaths and injuries involved, and why? 3. Should a company be able to escape liability for harming individuals by declaring bankruptcy? 4

> 1. Is it unethical to pay donors for making blood donations? 2. Is blood a commodity that can be bought and sold like any other commodity? 3. Is there a difference between selling blood that can be used in transfusions and selling blood that will be used

> What should Arthur do? Why?

> 1. What did Arthur Andersen contribute to the Enron disaster? 2. What Arthur Andersen decisions were faulty? 3. What was the prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management, and Sunbeam a

> 1. What are the costs to other stakeholders in society beyond those that Reuters included? How would these costs be estimated? 2. Has the cost of lost reputation been included by Reuters? If not, how could it be estimated? 3. Since there are so many un

> 1. If the cost of printing Harry Potter books on recycled paper added 3% to the cost, was the publishing company really serving the interest of its shareholders, given that the demand for Potter books was so high that all copies would probably have been

> 1. Discuss the pros and cons of altering the catalogue using: (a) deontology, (b) utilitarianism, and (c) virtue ethics. 2. Should a company alter its marketing campaign to reflect biases that might be prevalent in various countries in which the compan

> 1. Is it ethically acceptable to sell forgeries to art experts who should be able to differentiate a fake from an authentic work of art? 2. Comment on Hebborn’s personal moral code. 3. Was anyone harmed when Landis donated his forged paintings to various

> 1. Why didn’t the Dow Corning ethics audit program reveal any concerns about the silicone-gel breast implant line? 2. What are the critical factors necessary to make such an ethics audit program work effectively? 3. Was the March 20th announcement well-

> What advice would you give?

> 1. What factors contribute to a firm engaging in sexual discrimination? 2. What factors should the board of directors consider if there is an internal complaint of sex discrimination on the basis of pay and promotion? 3. What other costs might Dell incur

> 1. Is it legal, moral or ethical for South Africa to override aids medication patents? 2. Is it legal, moral or ethical for drug patent holders to resist? 3. If you were a senior executive in an affected drug patent holder, what solution would you sugge

> 1. What should the CFO do? 2. Beyond resigning, how can the CFO protect him or herself?

> 1. When it began operations in China in 2006, Google had agreed to have the search engine Google.cn censor information. Did Google have an ethical right to renege on its agreement in 2010 by directing its Chinese users to the uncensored search engine Goo

> 1. Analyze whether BP`s corporate culture was ethical. 2. Why has BP`s culture developed as it has? 3. How would you suggest changing its culture? 4. What roles should the CEO and the Board of Directors play in making this change? 5. How could this chang

> What advice would you give to the Professional Accountant?

> 1. Was the decision not to install the rubber bladder appropriate? Use the 5 question/box framework to support your analysis. 2. What faults can you identify in Ford's cost-benefit analysis? 3. Should Ford have given its Pinto customers the option to ha

> 1. What should the individuals involved have done? 2. How can the Hermann Hospital ensure that individuals do what they should? 3. Should the doctor, residents, pharmacist and nurses involved in this tragedy be fired? If not, should they be sanctioned,

> 1. Keeping in mind that no compensation, nor accounting services, were ever received or provided, has Sam stepped “out of bounds”? 2. What is your advice for Sam? 3. What is your advice for Ruby? 4. Given the alleged disclosures by Jimmy’s accountant, ha

> 1. What breaches of fiduciary duty does the Adelphia case raise? 2. Why do you think the Rigas family though they could get away with using Adelphia as their own piggy bank? 3. What allowed the Rigas family to get away with their fraudulent behaviour for

> 1. What does our professional code say about this? 2. If this issue is uncovered by the government regulatory authorities, will I be implicated? 3. Should I quit my job and then go and report this situation to the regulatory authorities?

> 1. Based on the conflicts of interest raised in the case, has Goldman Sachs, in effect, shorted itself? Explain why and why not. 2. How should Goldman Sachs have handled each conflict of interest? 3. If Goldman Sachs really is innocent of all conflicts,

> 1. From a utilitarian point of view, who do you think should be in the priority group? 2. From a justice as fairness perspective, who should be in the priority group? 3. Should people who make society flourish through their economic productivity, such as

> 1. Do you think that Apple’s new accounting policy, that is consistent with the 2009 FASB statement, results in fair financial reporting? 2. Do you think that Apple’s share price should have gone up as a result of increased revenue due to a change in an

> 1. Why did BP fail its oversight and decision capabilities? 2. Describe your vision of a good risk management process that BP should have been following. 3. What aspects of a good risk management process appear does BP not appear to have been using? 4. H

> 1. Which segment of its operations got Enron into difficulties? 2. How were profits made in that segment of operations (i.e. what was the business model)? 3. Did Enron’s directors understand how profits were being made in this segment? Why not? 4. Enron

> 1. Apparently Daimler executives were not concerned enough with personal sanctions to change the company’s bribery practices to comply with German and U.S. statutes. How can these attitudes be changed? 2. What internal controls could have been usefully

> 1. Is Madoff’s sentence too long? 2. Some SEC personnel were derelict in their duty. What should happen to them? 3. Are the reforms undertaken by the SEC (“The Securities and Exchange Commission Post-Madoff Reforms” (last update October 16, 2014), http

> 1. Did Goldman Sachs do anything wrong legally or ethically? Explain your answer. 2. Would it make a difference if other investment bankers were also providing such services? 3. What subsequent impacts could the transactions described above have on Gold

> 1. What are the ethical issues? 2. What should Albert Gable do?

> 1. Did the bank have a moral responsibility to assist in the restructuring of the commercial paper market? 2. How would you explain to the board of directors that you were having a bank exit a market in which your competitors were making a lot of money?

> 1. Who are the stakeholders involved and what are their interests? 2. Which stakeholders and interests are the most important? Why? 3. What was wrong with the quality of the board of directors’ debate? 4. What is the downside if the right decision is not

> What should Ron consider in making his decision?

> 1. What differentiates very aggressive tax shelters from reasonable tax shelters? 2. As a result of the E&Y and KPMG tax fiascos, the large accounting firms have become wary of marketing very aggressive tax shelters. Now, most shelters are being sold by

> 1. Balancing personal self-interest against the interests of others 2. Profitability is too narrowly defined 3. Are there occasions when lowballing is appropriate? 4. What control strategies may be advisable?

> 1. Did Maria blow the whistle at the right time? Why or why not? 2. Was her planned response appropriate? Why or why not? 3. How would you suggest she should have dealt with the problem? 4. Should whistle-blowing be encouraged? Why or why not? 5. How sho

> 1. Who are the stakeholders involved in this decision? 2. What are the ethical issues involved? 3. What should Sue do?

> 1. Do you think that the executives at Lululemon demonstrated ethical leadership? Could it have been improved? 2. Does a CEO have an ethical responsibility to step down as CEO when there is a production and marketing disaster that requires a product reca

> 1. Should the CEOs of these mining companies be held accountable for commodity prices that have dropped precipitously while operating costs have soared? 2. Should Albanese be held responsible for the fact that the Chinese market did not open as he predic

> 1. Whose codes will predominate: lawyers, engineers or accountants? 2. Do professionals report to one of their own or to a member from a different profession? 3. Who would be sued? 4. Won’t focus be on profit rather than serving the public interest?

> 1. Should the Italian bank’s general manager hire a commercialista and pay busterella? 2. Should the general manager phone the bank’s American CEO in New York and ask for advice? 3. If you were the bank’s American CEO, would you want to receive the phone

> 1. Do you consider it to be unethical for insurance companies to charge high-risk people a higher premium than low-risk people? 2. Are insurance companies acting responsibly when they require customers to disclose medical information and/or submit to a m

> 1. Which groups were most at fault for the LIBOR manipulations: brokers, traders, bank executives, bank boards of directors, or regulators? Why? 2. What should the regulatory bodies do with the fines paid by these banks? Reduce tax rates for the general

> 1. What major governance problems does WGH face? Which problems are the most important and need to be fixed as soon as possible? 2. What are the most important ethical problems faced by a general hospital? How could these ethical problems best be manag

> a) Is this a fair law? b) If you were Harold Johns, how would you ensure that Baranca executives and Baranca itself would never be vulnerable to such problems again?

> 1. Does accounting cause bankruptcy? 2. Should the federal government have bailed out AIG, especially when it had not rescued Lehman Brothers and had let Merrill Lynch be taken over by Bank of America?

> 1. What conflicts of interest may have been involved in Black’s activities? 2. Were Black’s non-compete agreements and payments unethical and/or illegal? 3. What questions should have been asked by International’s directors? 4. If the boards of directors

> 1. What was the most important reason for Lehman Brothers failure? 2. What is leverage and why is it so important? 3. Prepare the journal entries for a Repo 105 transaction sequence for $1 million in securities. 4. In your opinion, how large should a Rep

> 1. Do you consider transfer pricing to be an ethical means of reducing a business’s tax liability? Why, and why not? 2. At what level would a transfer price cease to become reasonable, and become unethical and probably illegal? 3. Does transfer pricing

> 1. Pharmaceutical companies have to spend millions of dollars and years of research to find just one successful drug. Merck spent time and money developing and then distributing Mectizan for free. Is it possible for Merck to justify, to its shareholders,

> 1. Are offshore tax havens that are technically legal but socially unacceptable in the public interest? 2. Are tax accountants promoting the public interest when they design, promote, and sell tax shelters that reduce or eliminate paying taxes by the wea

> 1. After being told that the guideline for bad debts for 1996 was $15 million, what should Walt do? 2. What are the risks for MCI in setting an unrealistic allowance for doubtful accounts?

> 1. Loyalty is a highly desirable ethical value, and disloyalty is serious unethical and often illegal activity. Explain how and to whom Grossmith, Horcsok, and Webb (G, H, and W) were disloyal. 2. Although Grossmith’s actions did not negatively affect

> 1. If you were an executive of Mega Brands, what concerns would you express to the CEO about the Magnetix Toy issues noted above? 2. If the CEO didn’t pay any attention, what would you do? 3. Should the CPSC have more powers to deal with such hazards and

> 1. Why would HP bribe think they could get away with bribing an employee in the Russian anti-bribery prosecutor’s office? 2. Why was it done through a series of companies in different countries? 3. What has changed to now allow investigators to unravel s

> 1. Should an accounting firm have to resign as the auditor of a company when the partner in charge of the audit is convicted of releasing confidential information about that audit client? 2. How can accounting firms ensure that their partners and staff d

> 1. What was the basis of Martha Stewart’s reputation? 2. Why did MSO’s stock price decline due to Martha Stewart’s loss of reputation? 3. Who is Martha Stewart’s target market? 4. What qualities were associated with the Martha Stewart brand, before the c

> 1. The pattern of illegal and improper conduct described above took place for at least 5 years prior to June 3, 2002. What red flags or governance mechanisms should have alerted the following people to this pattern: a. Tyco management accountants? b. Ty

> 1. Do you think that the gross value method distorts earnings because it overstates revenue? 2. The total cash that the company receives is the same regardless of the method the company uses to report revenue. So, is one revenue recognition method just a

> 1. What were the responsibilities of the company, the government authorities, and the employees of the company, that were not properly discharged? 2. Should Exxon abide by the Valdez Principles? 3. Could a better code of conduct have prevented this accid

> 1. Do you think that stock options actually motivate employees to work for the long-term good of the company? 2. Do you think that stock options inadvertently encourage manager to engage in questionable accounting activities, such as earnings management,

> a) What are the crises that Lynn faces? b) What order should the crises be considered in? (i.e., Which are the most serious?) Why? c) What solutions can they offer? d) How would they guard against and prevent such crises in the future?

> 1. Utilizing the information provided and available from web sources, use the ethical decision-making techniques discussed in the chapter to form an opinion about whether Merck’s decisions regarding Vioxx were ethical. Show your analysis. 2. In order to

> 1. Did Toyota handle its recalls ethically? Why and why not? 2. What changes would you recommend to Toyota’s crisis management approach? Why? 3. Do you think that Mr. Toyoda’s testimony on February 24, 2010 was effective? How might it be improved? 4. Toy