Module 9 Articles

Question 1

SEC Requirements for a Code of Ethics

Answer 1

Requires registrants to disclose whether they have written codes of ethics that apply to their principal executive officers, financial officers, accounting officers/controllers

Question 2

An organization registered in the U.S. must disclose any changes to the code of ethics that apply to the CEO or senior financial officers, generally within

Answer 2

Four business days after it amends its code of ethics or grants a waiver

Same for NYSE and NASDAQ

Question 3

NYSE Requirements for a Code of Ethics

Answer 3

• Required to have the audit committee oversee legal and regulatory compliance
• Requires a code of conduct that covers all employees.

Question 4

NASDAQ Requirements for a Code of Ethics

Answer 4

Require public disclosure of a code of conduct applicable to all employees, officers, and directors.

NASDAQ’s criteria consistent with the SEC’s

Question 5

The most common method of receiving tips from inside and outside the organization is through

Answer 5

A telephone and Web-based hotline administered by an internal department or a third party

Question 6

Survey conducted by the Institute of Internal Auditors, asked chief audit executives where directors at their companies get information about potential risks

Answer 6

Three-quarters of respondents said directors are “very likely” to rely on management

Question 7

What worries auditors

Answer 7

Is that directors, particularly on the audit committee, may be placing too much weight in assurances they receive from management

Question 8

Among publicly traded companies, __ of chief audit executives said they report directly to the chief financial officer

Answer 8

75%

Question 9

American Institute of Certified Public Accountants

Answer 9

Sets the standards for audits of private companies in the U.S.

Question 10

Proposal of American Institute of Certified Public Accountants

Answer 10

Proposed expanding the framework auditors use when gathering and assessing evidence used to form their opinions of financial statements

Question 11

ILL-Conceived Goals

Answer 11

We set goals and incentives to promote a desired behavior, but they encourage a negative one

Question 12

Motivated Blindness

Answer 12

Overlooking the unethical behavior of others when its in our interest to remain ignorant

Question 13

Indirect Blindness

Answer 13

Hold others less accountable for unethical behavior when its carried our through third parties

Question 14

The Slippery Slope

Answer 14

We are less able to se others’ unethical behavior when it develops gradually

Question 15

Overvaluing Outcomes

Answer 15

Give a pass to unethical behavior if the outcome is good