Klein, Ethics in Accounting, 1/e 3-1

Test Bank Solutions Ethics in Accounting A Decision Making Gordon Klein

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Ethics in Accounting A Decision Making Approach 1st Edition Solutions

Manual Gordon Klein

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INSTRUCTOR TEST BANK – CHAPTER 3

MULTIPLE CHOICE

1. A focus on the importance of categorical imperatives distinguishes:

a. Utilitarianism from consequentialism

b. Deontology from utilitarianism

c. The philosophies espoused by Kant from deontology

d. The philosophies espoused by Mill from utilitarianism

SOLUTION: B

2. A focus on achieving the least overall harm for members of society is best reflected in

the philosophy of:

a. Deontology

b. Consequentialism, but not necessarily utilitarianism

c. Utilitarianism, but not necessarily consequentialism

d. Emanuel Kant

SOLUTION: C

3. A real-world difficulty of applying utilitarianism is that:

a. It can be difficult to identify all stakeholders affected by a decision

b. It can be difficult to measure utility

c. Some benefits, such as the enjoyment of privacy, are difficult to quantify

d. All of the above

SOLUTION: D

4. Which of the following typically is not a real-world difficulty of applying utilitarianism?

a. It give undeservedly high weight to human emotion

b. It cannot readily measure societal values, such as the value of eradicating

discrimination based on religion

c. It can be difficult to determine if an act makes society better off

d. It focuses on the good of the majority and does not place any value on the protection

of minorities’ rights

Klein, Ethics in Accounting, 1/e 3-2

SOLUTION: A

5. Which of the following best describes deontology?

a. It has few, if any, protections for cultural minorities

b. It often conflicts with important rights, such as freedom of contract

c. The set of rights protected by this philosophy are ill-defined

d. It favors the rights of broader society over the rights of individuals

SOLUTION: C

6. Which of the following rights customarily is not given absolute protection by

deontology?

a. Property rights

b. The right to never be imprisoned

c. The right of free association

d. The right to be left alone

SOLUTION: B

7. A real-world difficulty of applying deontology is that:

a. It can be difficult to identify all stakeholders affected by a decision

b. It can be difficult to measure utility

c. Some benefits, such as the right to the protection of trade secrets, are difficult to

quantify

d. Two or more rights protected by deontology sometimes are in conflict

SOLUTION: D

8. The principal proponent of deontology was:

a. John Stuart Mill

b. Emanuel Kant

c. Jeremy Bentham

d. Aristotle

SOLUTION: B

9. The law of eminent domain allows a local government to take a person’s property for

public use, such as building a freeway that has been designed to cross land owned by this

landowner. The landowner, by law, is entitled to be paid the fair market value of her land.

The law of eminent domain is an example of:

a. Utilitarianism

b. Deontology

c. Ethical relativism

d. Ethical absolutism

SOLUTION: A

Klein, Ethics in Accounting, 1/e 3-3

10. The law of eminent domain allows a local government to take a person’s property for

public use, such as building a freeway that has been designed to cross land owned by this

landowner. The landowner, by law, is entitled to be paid the fair market value of her land.

However, in a recent action, a local government took a landowner’s property under eminent

domain and paid that landowner less than fair market value. Under utilitarianism, this

government’s action:

a. Definitely was suboptimal

b. Definitely was optimal because the government saved money for the benefit of

society

c. Definitely was optimal because any act that shifts resources away from a private

individual to broader society satisfies the precepts of utilitarianism

d. May have been optimal or suboptimal, but further inquiry into relevant facts is needed

SOLUTION: D

11. When a person is asked to evaluate an ethical dilemma in a secondary language rather

than in the primary language learned at birth, researchers have discovered that the person’s

decision-making tends to be:

a. Less rational

b. Skewed in favor of a choice that reflects the viewpoint of consequentialism

c. More likely to favor the deontology viewpoint

d. Emotionally-driven, especially among men

SOLUTION: B

12. Stealing from the rich to give to the poor:

a. Definitely violates the precepts of deontology

b. Definitely violates the precepts of consequentialism

c. Is a categorical imperative

d. Is a classic example of the reversibility principle

SOLUTION: A

Klein, Ethics in Accounting, 1/e 3-4

ESSAYS/SHORT ANSWERS

1. Identify an ethical issue that is in the news. Analyze it from the standpoint of

consequentialism.

2. A cheese manufacturing plant utilizes portions of milk in the cheese-making process and

sends the remainder of the milk into a nearby river. The milk effluence pollutes the river,

making it unusable for recreational use by local residents. This effluence has a foul odor, but

it does not pose a health hazard.

a. Evaluate the company’s actions from a utilitarian perspective.

b. Evaluate the company’s actions from a deontological perspective.

c. What are the practical problems in applying consequentialism in this situation?

d. What are the practical problems in applying deontology in this situation?

SOLUTION:

Regarding utilitarianism/consequentialism: The relative utility of being free from foul odors

and the relative joy from enjoying the recreational use of a river are difficult to measure.

Similarly, the relative benefit of having abundant, affordable cheese products is also difficult to

measure. Identification of the relevant stakeholders is likewise challenging.

Regarding deontology: Deontology views property rights as a categorical imperative. In this

case, the property rights of the cheese manufacturer conflict with the rights of local residents to

be free from the physical intrusion caused by the foul odor.

3. A student at a local elementary school recently returned from a trip to a region of the world

where there is a plague of a dreaded disease called the “Crazy Curse.” According to medical

doctors, the odds of this student infecting fellow classmates with this disease are “lower than

zero.” However, many parents have asked the school to disclose whether this student did in

fact travel to the region where the “Crazy Curse” is spreading rapidly.

School authorities know that, if they make such a disclosure, the student will be ostracized

and many parents will refuse to send their children to school. As a result, the school is

considering various options, including making an announcement that “the student in question

did not travel” to the region where the Crazy Curse is spreading.

a. What actions should the school consider?

b. What action do you recommend?

c. Is your decision consistent with deontology?

Klein, Ethics in Accounting, 1/e 3-5

d. Is your decision consistent with consequentialism?

SOLUTION: Deontology precludes ever lying, even if the ends arguably seem to justify the

means. Consequentialism must take into account all benefits and costs, including reputational

harm and the loss of credibility regarding all future pronouncements and warnings that will occur

in the future if the school is caught lying in the future.

4. Your client told you that it needed to have “a completed compilation of its financial

statements, in good form” for presentation to its bank this upcoming Friday in order to obtain

a needed working capital loan. Although you had promised to accomplish this task on time,

you were arrested for drunk driving on Thursday and had to spend most of the day at the

police station arranging to post bail.

You knew that, if you had told your client the truth, the client would have terminated your

professional relationship. This in turn would have required you to layoff Garza, your superb

accounting analyst who is financially responsible for the care of her aged parents. As a result,

you told the client that your child had to go to the emergency room for stitches after she

inadvertently sat on the sharp point of scissors while working on an art project. Your client

relayed this excuse to the bank as the reason that the submission of its financial statements

would be delayed.

a. Evaluate your conduct from the standpoint of deontology.

b. Evaluate your client’s statements to the bank from the standpoint of deontology.

c. Evaluate your conduct from the standpoint of consequentialism.

SOLUTION: Your lie violated deontology. The bank merely relayed your excuse and was not

intentionally or knowingly deceiving the bank, so it did not violate deontology.

Perhaps the preservation of jobs at your firm exceeded the harm caused by lying. Thus, a

consequentialist might contend that your actions were acceptable.

5. A poor family went to the market to purchase fried chicken for dinner tonight. Unfortunately,

this family’s beloved cat ran into the street and was killed by a passing car. Rather than bury

the cat, the family decided to cook the cat and eat it for dinner instead of eating fried chicken.

Was the family’s decision unethical?

SOLUTION: Under consequentialism, the family is better off because it saved money. Also, by

eating the dead cat and not eating the chicken, it saved the life of one chicken, all else equal.

There does not appear to be any stakeholders who were made materially worse off.

Eating a dead cat, although disgusting to many, does not appear to violate any of deontology’s

categorical imperatives. Perhaps some will say that it violates the dignity of the cat or of all

animals generally, and therefore, offends human dignity.

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