2. Which of the following is not an objective of an ethical audit? 
a) To determine the extent to which the decisions taken at all levels of an organization are aimed at maximizing long-term ownership value and achieving distributive justice
b) To help scrutinize the basis on which accounts are drawn and also evaluate the information the management has access to for running the business
c) To measure business conduct against the moral or religious standards of the community in which the business operates
d) To improve the quality of governance by evaluating the performance and ensuring that the financial information is both available and reliable

3. Which of the following statement(s) is/are true regarding the Indian Information Technology Act 2000?
a) It provides the legal infrastructure for electronic commerce in India
b) It recognizes the validity of digital signatures
c) It defines hacking
d) All the above

4. According to Gellaraman, which of the following is not a rational assumption made by managers to justify their behavior when resolving ethical dilemmas?
a) Their actions are within reasonable ethical and legal limits and hence are not illegal or unethical
b) They take actions that are in the best interest of individuals or corporations
c) Their actions will not be disclosed or published, and hence there is no danger to them or their company
d) Their community will protect them

5. Why is the ‘believe approach'used?
a) To detect frauds in financial statements
b) To resolve ethical dilemmas
c) To enhance the efficiency of audit procedures
d) To enhance employee morale

6. Which of the following is not the responsibility of a business corporation towards its customers?
a) Providing goods according to the specific needs of consumers
b) Improving living standards by producing goods and services of high quality
c) Ensuring the health and safety of consumers
d) Providing technologically superior goods and services at discounted prices

7. Which of the following tasks is a corporation performing when it creates products that are useful and designed in accordance with changes in consumer preferences?
a) Financial tasks
b) Maintenance tasks
c) Adaptive tasks
d) Environmental tasks

8. Which of the following is not a format for developing a corporate code/ethics statements?
a) Compliance codes
b) Corporate credos
c) Compliance certificates
d) Safety rules

9. In which of the following activities do individual, group, social and political processes play a major role?

  i. Formulation of the corporate code
  ii. Formulation of laws
  iii. Formulation of the code of corporate governance

a) Only i
b) Only ii
c) Only iii
d) Both i and ii

10. Which of the following approaches focuses on the utility that human beings can derive from protecting the environment?

  i. Anthropocentric approach
  ii. Anxiological approach
  iii. Eco-centric approach

a) Only i
b) Only ii
c) Only iii
d) Both i and ii

11. Which of the following is not a green initiative taken up by businesses?
a) Green tourism
b) Green community
c) Green house
d) Environment counseling

12. Apart from taking strategic decisions and being morally responsible for the operation of the business, a leader has to maintain a healthy relationship with stakeholders through ‘contracts.'Which of the following is not one of those contracts?
a) Knowledge contract
b) Employment contract
c) Empowerment contract
d) Psychological contract

13. Which of the following activities aimed at changing the ownership of a company involves financing from third parties through substantial borrowing by the private company?
a) Exchange offer
b) Share repurchase
c) Leveraged buy-outs
d) Management buy-out

14. Which of the following is not regarded as unethical behavior in the purchase function?
a) Deceiving suppliers
b) Forward buying for smooth functioning of the production department
c) Favoring suppliers who are also good customers
d) Accepting free gifts from suppliers

15. Which of the following is not one of the principles for deciding the ethical remuneration of an employee?
a) Remuneration depends solely on results
b) Employees who work hard to perform a task need not be rewarded more than those who do it effortlessly
c) An employee, who works hard but fails to achieve results, deserves no reward but sympathy
d) An employee should be rewarded for his experience and the loyalty he shows towards his organization, even if these are not reflected in his performance

16. In which anti-takeover technique does the entire management team threatens to resign in the event of a takeover?
a) Poison pills
b) People pill
c) Sand bag
d) Green mail

17. Which of the following involves the acquisition, ownership, possession or transfer of the proceeds of criminal activity?
a) Insider trading
b) Money laundering
c) Hostile takeovers
d) Management buyout

18. Which of the following statements is associated with the concept of ethical relativism?
a) What is ethically right or wrong for an individual depends on the ethical principles he or she chooses
b) There is no universal set of principles going by which one can judge the morality of a decision/action
c) An act is ethical when it maximizes happiness and unethical when it does not
d) Ethical problems usually arises from a conflict between an organization's economic performance and social performance

19. At which level of ethical consciousness do corporations seek to achieve certain social objectives such as promoting community health programs, participating in job creation, employing handicapped people, encouraging the self-realization of employees, and ensuring the financial success of the company?
a) Stake holder concept
b) Corporate citizenship
c) Profit-maximization in the short-term
d) Profit-maximization in the long-term

20. According to which of the following consequentialist theory/theories is an action morally right if the consequences of that action are more favorable than unfavorable to everyone?

  i. Egoism
  ii. Utilitarianism
  iii. Altruism

a) Only i
b) Only ii
c) Only iii
d) All i, ii and iii

21. Which of the following judge the ethical nature of an organization on the basis of ‘espoused values'and ‘values in practice'?

  i. Theory of corporate moral excellence
  ii. Ethics and stake holder theory
  iii. Ethics and corporate governance

22. Which of the following characteristics of a corporation does not attract individual investors?
a) Transferability of stockholdings
b) Legal personality
c) Centralized management
d) Size of the corporation

23. In which corporate governance model do financial institutions have a major say?
a) Anglo-American model
b) German model
c) Japanese model
d) Indian model

24. Identify the type of directors who are appointed to the board by the major shareholders or financial institutions like banks, mutual funds etc.
a) Nominee directors
b) Representative directors
c) Shadow directors
d) Associate directors

25. Identify the type of board which lays more emphasis on maintaining cordial interpersonal relations among members than on effective decision-making?
a) Rubber stamp board
b) Representative board
c) Country club board
d) Professional board