Question 1

By December 2001, Enron was_______ &#9;.&#10;A) a well-run multinational corporation&#10;B) an innovative success story&#10;C) an example of corporate leadership&#10;D) a &#34;Ponzi&#34; scheme

Accepted Answer

By December 2001, Enron was revealed to be a "Ponzi" scheme due to its fraudulent accounting practices and financial scandals, leading to its bankruptcy.

Question 2

Enron started as_______ &#9;.&#10;A) the result of a merger of two traditional companies&#10;B) a maverick oil and gas concern&#10;C) an energy trading concern&#10;D) a South American company

Accepted Answer

Enron was formed in 1985 as the result of a merger between Houston Natural Gas and InterNorth, two traditional energy companies.

Question 3

Enron had a balance sheet littered with _______&#9;.&#10;A) debts&#10;B) unusually creative accounting entries&#10;C) subordinate notes&#10;D) responsibilities of its parent company

Accepted Answer

Enron's balance sheet was known for its use of unusually creative accounting practices, which ultimately contributed to its collapse.

Question 4

Enron fell apart because of _______&#9;.&#10;A) the death of its chairman&#10;B) the collapse of the oil market&#10;C) its inability to raise funds to cover its &#34;off balance sheet&#34; transactions&#10;D) excess liquidity

Accepted Answer

Enron's downfall was primarily due to its inability to cover its off-balance-sheet transactions, which were hidden liabilities that led to financial instability and eventual bankruptcy.

Question 5

Enron was_______ &#9;.&#10;A) a company with no assets&#10;B) a limited liability partnership&#10;C) a company with no international assets&#10;D) the biggest bankruptcy in U.S. history

Accepted Answer

Enron was a major American energy company that filed for bankruptcy in December 2001, marking it as the largest bankruptcy in U.S. history at that time.

Question 6

Bureaucratic ethics is based on_______ &#9;.&#10;A) too many people making decisions&#10;B) the Protestant Ethic&#10;C) managers' rules for success&#10;D) individual affluence

Accepted Answer

Bureaucratic ethics is based on managers' rules for success, which are designed to ensure efficiency, predictability, and control within an organization.

Question 7

In modern American Bureaucratic companies _______&#9;.&#10;A) details are pushed up and credit is pushed up&#10;B) details are pushed down and credit is pushed up&#10;C) details are pushed down and credit is pushed down&#10;D) details are pushed up and credit is pushed down

Accepted Answer

In modern American bureaucratic companies, lower-level employees handle the details (pushed down), while higher-level executives often receive the credit for successes (pushed up).

Question 8

Ethics in a Bureaucracy most often resembles _______&#9;.&#10;A) a moral maze&#10;B) a straight line&#10;C) a ellipse&#10;D) a jig-saw puzzle

Accepted Answer

Ethics in a bureaucracy is often complex and challenging to navigate, similar to a "moral maze," where individuals must find their way through various rules, regulations, and ethical dilemmas.

Question 9

Business managers tend to be morally_______ &#9;.&#10;A) weak&#10;B) congruent&#10;C) incongruent&#10;D) mute

Accepted Answer

Business managers are often described as morally mute because they may avoid discussing ethical issues or moral considerations in business decisions.

Question 10

Moral talk by managers is seen as:&#10;A) a threat to the image of effectiveness&#10;B) helpful to efficiency&#10;C) both of the above&#10;D) none of the above

Accepted Answer

Moral talk by managers is often perceived as a threat to the image of effectiveness because it can be seen as detracting from a focus on results and efficiency.

Question 11

The Sarbanes-Oxley Act affects auditors.

Accepted Answer

The answer of The Sarbanes-Oxley Act affects auditors....

Question 12

John C. Coffee, Jr. blames the rise in laborers' compensation for much of the corporate abuses of the 1990's.

Accepted Answer

The answer of John C. Coffee, Jr. blames the rise...

Question 13

All aggressive companies must eventually restate earnings.

Accepted Answer

The answer of All aggressive companies must eventually restate earnings....

Question 14

The Sarbanes-Oxley Act affected directors of publicly traded companies.

Accepted Answer

The answer of The Sarbanes-Oxley Act affected directors of publicly...

Question 15

The Sarbanes-Oxley Act affected officers of publicly traded companies.

Accepted Answer

The answer of The Sarbanes-Oxley Act affected officers of publicly...

Question 16

Lawyers may never report the fraud of their clients.

Accepted Answer

The answer of Lawyers may never report the fraud of...

Question 17

Enron owned natural gas pipelines.

Accepted Answer

The answer of Enron owned natural gas pipelines....

Question 18

Enron made a fortune in broadband services.

Accepted Answer

The answer of Enron made a fortune in broadband services....

Question 19

Arthur Anderson served as Enron's auditors.

Accepted Answer

The answer of Arthur Anderson served as Enron's auditors....

Question 20

Arthur Anderson always used the highest objective accounting standards with respect to Enron.

Accepted Answer

The answer of Arthur Anderson always used the highest objective...

Deck 9: Values and the Virtuous Manager