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Business Ethics and Corporate Governance MCQ with Answers

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These Business Ethics and Corporate Governance MCQ with Answers are prepared by our expert team to help you for your upcoming entrance exams.

Business Ethics and Corporate Governance MCQ with Answers

1. Which of the following are the principles of ethics in business?

  1. Honesty
  2. Integrity
  3. Loyalty
  4. All of these

Answer: All of these

2. A board that is elected in a classified system is known as a

  1. Diversified board
  2. Staggered board
  3. Rotating board
  4. Declassified board

Answer: Diversified board

3. Which of the following regarding corporate governance is correct?

  1. Corporate governance can temper growth.
  2. Good corporate governance can result in excessive risk-taking.
  3. Corporate governance often result in prompt and effective decision-making.
  4. The aim of corporate governance is to protect the interests of shareholders and the local economies.

Answer: Corporate governance can temper growth.

4. The first step in the auditing process should be to secure the commitment of:

  1. Employees
  2. Top executives and directors
  3. Stockholders
  4. Customers

Answer: top executives and directors.

5. Which of the following is not part of the definition of an asset?

  1. Control of a resource.
  2. Resulting from a past event.
  3. Inflow of economic benefits.
  4. During the accounting period.

Answer: During the accounting period.

6. Which of the following is not a driver of responsible competitiveness?

  1. Policy drivers
  2. Development drivers
  3. Business action
  4. Social enablers

Answer: Development drivers

7. Which of the following statements regarding institutional shareholders is correct?

  1. These shareholders have extensive power to monitor the activities of the company.
  2. Institutional shareholders prefer to exert their power privately rather than publicly.
  3. These shareholders often aim to improve outcomes rather than sell their shareholding.
  4. Institutional shareholders are known to publicly use their voting power to encourage sound corporate governance.

Answer: Institutional shareholders prefer to exert their power privately rather than publicly.

8. A (n) _____________ is a problem, situation, or opportunity requiring an individual, group, or organization to choose among several actions that must be evaluated as right or wrong.

  1. Crisis
  2. ethical issue
  3. indictment
  4. fraud

Answer: ethical issue

9. A high-commitment approach to environmental issues may include all of the following except:

  1. risk analysis
  2. stakeholder analysis
  3. green-washing
  4. strategic sustainability auditing

Answer: green-washing

10. Which of the following relating to discounting future liabilities is correct?

  1. Discounting future cash flows is not aligned with the aims and objectives of sustainability reporting.
  2. Discounting distant future costs that are to be incurred increases the current liability that is to be reported now.
  3. Discounting costs highlights the savings of future generations due to present generations accounting for the loss now.
  4. Discounting social issues are done in terms of the accounting standards so there are no ethical issues as the process is fair.

Answer: Discounting future cash flows is not aligned with the aims and objectives of sustainability reporting.

11. Which of the following relating to CSR theories is correct?

  1. Institutional theory is based on the shareholder concept.
  2. Social contract is the key concept of legitimacy theory.
  3. The key concept of enlightened self-interest is stakeholder relations.
  4. Stakeholder theory requires organisations to manage community perceptions to survive.

Answer: Social contract is the key concept of legitimacy theory.

12. A stakeholder orientation includes all of the following activities except:

  1. generating data about stakeholder groups
  2. assessing the firm’s effects on stakeholder groups
  3. distributing stakeholder information throughout the firm
  4. minimizing the influence of stakeholder information on the firm

Answer: minimizing the influence of stakeholder information on the firm

13. ABC Ltd is a mining company listed on the Australia stock exchange. It has an audit committee comprising four members. Two members are independent non-executive directors with engineering and mining qualifications. The nomination committee is currently looking to appoint an additional member to the audit committee. In terms of the ASX principles, which of the following would most likely be the best candidate for appointment?

  1. An independent non-executive director with a qualification in finance.
  2. An executive director with a qualification in accounting.
  3. A non-independent non-executive director with qualifications in accounting and auditing.
  4. A non-executive director who was previously the CFO of ABC Ltd a year ago.

Answer: An independent non-executive director with a qualification in finance.

14. An independent director is one who:

  1. Did not attend a school supported by the company.
  2. Does not have outside relationships with other directors.
  3. Does not have any other relationships with the company other than his or her directorship.
  4. All of the above.

Answer: Does not have any other relationships with the company other than his or her directorship.

15. An organisation’s obligation to act to protect and improve society’s welfare as well as its own interests is referred to as

  1. organisational social responsibility
  2. organisational social responsiveness
  3. corporate obligation
  4. business ethics

Answer: organisational social responsibility

16. An organization’s appropriate tone at the top promoting ethical conduct is an example of:

  1. Ethics sensitivity
  2. Ethics incentives
  3. Ethical behavior
  4. Consequentialist

Answer: Ethical behavior

17. Atmospheric issues include all of the following except:

  1. Acid rain
  2. Global warming
  3. Air pollution
  4. Water quantity

Answer: Water quantity

18. The four types of social responsibility include:

  1. Legal, philanthropic, economic, and ethical
  2. Ethical, moral, social, and economic
  3. Philanthropic, justice, economic, and ethical
  4. Legal, moral, ethical, and economic

Answer: Legal, philanthropic, economic, and ethical

19. The goal of corporate governance and business ethics education is to:

  1. Teach students their professional accountability and to uphold their personal Integrity to society
  2. Change the way in which ethics is taught to students
  3. Create more ethics standards by which corporate professionals must operate
  4. Increase the workload for accounting students

Answer: Create more ethics standards by which corporate professionals must operate.

20. The hand-of-government refers to the

  1. Ability of the government to interfere in business negotiations
  2. Role of corporations to be profitable within the law
  3. Effect of national politics on business decisions
  4. Impact of changing government regulations

Answer: Role of corporations to be profitable within the law

21. The internal audit function is least effective when the department:

  1. Is non-independent
  2. Is competent
  3. Is objective
  4. Exhibits integrity

Answer: Is non-independent

22. The primary stakeholders are

  1. Customers
  2. Suppliers
  3. Shareholders
  4. Creditors

Answer: Shareholders

23. The social economy partnership philosophy emphasizes:

  1. Cooperation and assistance
  2. Profit maximization
  3. Competition
  4. Restricting resources and support

Answer: Cooperation and assistance

24. The view that business exists at society’s pleasure and businesses should meet public expectations of social responsibility is the

  1. Iron law of responsibility argument
  2. Enlightened self-interest argument
  3. Capacity argument
  4. Anti-freeloader argument

Answer: Enlightened self-interest argument

25. To be successful, business ethics training programs need to

  1. Focus on personal opinions of employees
  2. Be limited to upper executives
  3. Educate employees on formal ethical frameworks and models of ethical decision making
  4. Promote the use of emotions in making tough ethical decisions

Answer: Educate employees on formal ethical frameworks and models of ethical decision making.

I hope these

Which of the following are the principles of ethics in business?

  1. Honesty
  2. Integrity
  3. Loyalty
  4. All of these

Answer: All of these

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