CFIN -STUDENT EDITION-W/ACCESS >CUSTOM<
6th Edition
ISBN: 9780357753118
Author: BESLEY
Publisher: CENGAGE C
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Question
Chapter 1, Problem 15PROB
Summary Introduction
Ethics can be defined as moral philosophy or credo that differentiates right conduct from wrong.
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Which of the following objectives of the company creates immoral practices such as: corrupt practice, unfair trade practice, etc.?
Select one:
A.
None of the given options
B.
Profit Maximization
C.
Welfare Maximization
D.
Wealth Maximization
Explain the links between stock price, intrinsic value, and executive compensation
Discuss the importance of business ethics and the consequences of unethical behavior.
how does being unethical in the financial industry affect communication with clients?
Chapter 1 Solutions
CFIN -STUDENT EDITION-W/ACCESS >CUSTOM<
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Similar questions
- Consider again Milton Friedman’s article. 1. What does Friedman mean by “ethical custom”? 2. If the laws of the society are limiting the company’s profitability, would the company be within its rights to disobey the law? 3. What if the law is “on the books,” but the company could count on a lack of enforcement from state officials who were overworked and underpaid? Should the company limit its profits? Suppose that it could save money by discharging a pollutant into a nearby river, adversely affecting fish and, potentially, drinking water supplies for downstream municipalities. In polluting against laws that aren’t enforced, is it still acting “within the rules of the game”? What if almost all other companies in the industry were saving money by doing similar acts?arrow_forwardIs business ethics an oxymoron?arrow_forwardSome accountants argue that they should be allowed to invest in a company's stock as long as they themselves aren't involved in working on the company's audit or consulting. What do you think of this idea?arrow_forward
- A well-run company should align the management’s interest and with the owner’s interests. What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned? Is this important? What are some of the risks/consequences if the management’s interests are not aligned with the owners?arrow_forwardHow do the concepts of cognitive dissonance and organizational/ethical dissonance relate to whether an accountant might choose to blow the whistle on corporate wrongdoing?arrow_forwardWhat is the possible agency conflict between inside owner/managers and outside shareholders? What are some possible agency conflicts between borrowers and lenders? How is it possible for an employee stock option to be valuable even if the firm’s stock price fails to meet shareholders’ expectations?arrow_forward
- Do you think there are any circumstances when you should go outside the company to report financial wrongdoing? If so, to what person/organization would you go? Why? If not, why would you not take the information outside the company?arrow_forwardManagers of corporations need to act in an ethical manner O because ethical behavior is its own justification. O because a business must be trusted by investors, customer and the public if it is to succeed. O because business managers must answer to a higher authority. O because ethics violations will be punished by the law.arrow_forward
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