Mid Term

NEW JERSEY CITY UNIVERSITY

School of Business

Accounting Department

Syllabus – ACCT 510 - Business Ethics

Summer- 2022 Semester

Take Home Exam Due June 13th2022 – Worth 20 Points

Part-A Short Answers. Answer questions 1. (5 Points)

1. Is it ethical for Jerry to keep his smart phone on during the work day if:

(a) His daughter is sick and he needs to monitor messages from the baby sitter. (b) His ID has been stolen and he is waiting for the credit card company to inform him of the damages. (c) He likes to see what is posted about the company on social media so he can inform his bosses. (d) He feels as though all employees should have the leeway to be involved in social networking on the job within reasonable limits. Discuss each of the above using ethical reasoning.

Answer questions 2. (5 Points)

2. (a) Assume your supervisor has reduced the number of hours you charged to the client because it was over

budget. You will not be paid for those hours. What would you do and why? Use ethical reasoning. (2.5 Points) (b) Describe the Giving Voice to Values framework. What are the reasons and rationalizations frequently given in financial statement fraud situations? (2.5 Points)

Part-B: Case Analyses– Answer Any Two Questions. (Ten Points)

3. At which stage of moral development are most accountants and auditors with respect to their decision making? What factors are responsible for their being at that stage? Given the stage of moral development you think you are at, how does this relate to the stage of moral reasoning of most accountants and auditors? What conflicts might exist for you in the workplace? (5 Points)

4. As an executive in a mid-sized manufacturing firm, Cal finds himself thrown together with Harry, who works for a division of the firm that Cal supervises. He and Harry are in the same community; their children are in the same schools; they often show up at the same social functions; and they play golf together fairly frequently. One day, to Cal's deep dismay, he hears that Harry has been implicated in some financial irregularities at work. The issues while serious leave some room for doubt. There is reason to think Harry got ensnared by regulations, though he may have afterwards tried to cover up that entanglement by being less than forthright. Yet after what Cal observes to be a careful audit and investigation, Harry is let go from his job. Harry comes to Cal and asks for a letter of recommendation. What should Cal do? What are the consequences of the options? (5 Points)

5. In September 2015, Volkswagen disclosed it had sold hundreds of thousands of diesel cars in the U.S. with software specifically designed to evade government pollution tests. The company disclosed that the irregularities on diesel-emission readings extend to some 11 million vehicles globally. The company has admitted that it rigged diesel vehicles using a "defeat device" to pass lab tests, even though they emitted as much as 40 times the legal limit of pollutants on the road. In November 2015, VW set a November 30 deadline for staff with knowledge about its diesel emissions test cheating to come forward. Workers who get in touch with internal investigators by then would be exempt from dismissal. VW said it would not sack workers for what they might reveal, but they might be transferred to other duties. "Employees covered by collective bargaining agreements who get in touch promptly, but no later than November 30, 2015... and... may rest assured that the company will waive consequences under labor law such as the termination of employment, and will not make any claim for damages," according to the letter sent to workers. Evaluate VW's actions from an ethical perspective. (5 Points)

6. Lana is a CPA and works as an internal auditor for Dynamite, Inc. As she was performing a revenue timing test, for the internal audit schedule and the external auditors, she noticed that the Western division consistently kept the books open 4 days into the next quarter. Lana immediately reported to the Chief Internal Auditor; together they took the issue to the CFO and Controller. The CFO assured them that the issue would be resolved. It has been 90 days since the meeting. Lana is considering blowing the whistle but cannot decide who to tell and when. What are the ethical issues of concern for Lana? What would you advise Lana to do, how, to whom and in what order, assuming she could qualify for a reward under Dodd-Frank? (5 Points) End of Mid-Term Exam