Chapter 2

Question 1

The ethical domain for accountants and auditors usually involves what four key constituent groups?

Answer 1

(1) client organization that hires and pays for acct services
(2) acct firm that employs the practitioner
(3) account profession, including regulatory bodies such as SEC AND PCAOB
(4) general public, who rely on attestations & representations of practitioner and firm

Question 2

6 stages of moral development are divided into three levels. What are the three levels?

Answer 2

1) pre conventional
2) conventional
3) post conventional

Question 3

What is preconventional?

Answer 3

Individual is self centered

Rules are seen as something external imposed on the self

Question 4

What are the two stages in preconventional?

Answer 4

1 — obedience to rules; avoidance of punishment

2 — satisfying ones own needs

Question 5

What is conventional?

Answer 5

Individual is aware of interests of others and ones duty to society.

Personal responsibility becomes important consideration in decision making

Question 6

What are the two stages in conventional?

Answer 6

3 — fairness to others
—> motivated by rules but also motivated to do what is percieved interests of others

4 — law and order

—> emphasizes morality of law and duty to social     order

Question 7

What is post conventional?

Answer 7

Principles morality underlines decision making at this level.

Individual recognizes that there must be a society wide basis for cooperation

There is an orientation to principles that shape whatever laws and role systems a society may have

Question 8

What are the stages in post conventional?

Answer 8

5 — social contract

—> individual is motivated by upholding basic rights, values, and legal contracts of society.

6 — universal ethical principles

—> right and wrong are determined by universal ethical principles that everyone should follow

Question 9

Kohl berg maintains that his stage is universal; it is same in all cultures?

T or F

Answer 9

T

Question 10

Do kohlbergs stages refer to underline mode of reasoning or underline specific beliefs?

Answer 10

Underline modes of reasoning

Question 11

Empirical studies have indicated what?

Answer 11

• ethical reasoning may be an important factor to decide professional judgement
• unethical and dysfunctional audit behavior may be related to auditors level of ethical reasoning
• ethical reasoning may be an import cognitive characteristic that may affect individual judgement

Question 12

What single modt influential factor determines a persons moral behavior?

Answer 12

Moral judgement

Question 13

What are some complaints about kohlbergs work?

Answer 13

• draws to heavily from Rawls theory of justice
• makes deontological ethics superior to other ethics perspectives
• applies more to societal issues than individual ethical perspectives

Question 14

Rest built on kohlberg work by developing a four component model of ethical decision making process

T OR F

Answer 14

T

Question 15

What are the four components of rest model?

Answer 15

1) moral sensitivity
2) moral judgement
3) moral motivation
4) moral character

Question 16

Moral sensitivity

Answer 16

Determine if situation is moral

Question 17

Moral judgement

Answer 17

Making these judgements is crucial for moral behavior

Question 18

Moral motivation

Answer 18

Reflects an individuals willingness to place ethical values (honesty, integrity, trustworthiness, caring & empathy) ahead of nonethical values that relate to self interest

Question 19

What also plays apart in moral motivation?

Answer 19

Emotions

Question 20

Moral character

Answer 20

Ethical intentions align with their ethical actions

Question 21

The four components of rests model are processes that must take place for what to occur?

Answer 21

Moral behavior

Question 22

Jones model consists of 6 dimensions

Answer 22

1) magnitude of consequences
- degree to which individual may be harmed or benefited by decision makers action
2) temporal immediacy
- refers to length of time between action and its consequences
3) social consensus
- degree of agreement among social group that an action is good or bad
4) proximity
- refers to nearness of decision maker to the individuals potentially affected by consequences
5) probability of effect
- refers to the likelihood that the predicted consequences and expected level of harm/benefit will occur
5) concentration of effect
- refers to the relationship between the number of people affected and the magnitude of harm

Question 23

What prompted jones to create the intensity model?

Answer 23

Lack of research on characteristics of moral issue