CPA Australia Ethics and Governance M2 (Knowledge Equity Questions - CONSOLIDATED)
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CPA Australia
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CPA Australia
It can be a pain to click into Knowledge Equity, fumbling to remember which question it was that you wanted to do some extra revising on, especially during the last-minute revision period. Hence, To provide a better overview of my revision process, I have consolidated all the questions + answers fr...
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Module 2: Ethics (KE Questions) Answer:
1. Sarah found a diamond ring in a busy shopping center. She A. Utilitarianism.
knows that the owner is likely to come back looking for the A is correct because the utilitarian approach is to distribute the
ring once she discovers it is missing. greatest benefit or advantages among the greatest number of
people. If there is an unavoidable disadvantage, then an action
Which of the following is most likely an action that indicates under this theory would be ethical if this disadvantage is
normative theory? distributed to the minority.
A. Sarah should keep the ring for her personal gain. Module: 2 > Part: B > 2.6 Teleological (consequential) theories > 0
B. Sarah is likely to pawn the ring and keep the profit. > Page: 54
C. Sarah should ask the center management to make an
announcement. 4. In 2018 Dr Neesham and Professor Tsahurida identified the
D. Sarah is likely to hold on the ring for safe keeping and greatest ethical issue that accountant face as misleading
sell when the price is right. reporting. Misleading reporting can often result from the
failure to report in accordance with accounting standards.
Answer:
C. Sarah should ask the center management to make an In which way can the role played by ASIC (Australian
announcement. Securities and Investments Commission) help investors or
C is correct because it is the most ethically correct action. users of financial reports to make certain this is not the case?
Normative theory indicates what a person 'should' do. That is, the
ethical or right thing to do. Whereas psychological theory relates A. ASIC can request correction of the financial statements
to 'what people actually do.' and even at times request court action
B. ASIC plays no role in the adjustment of financial reports
The other options give rise to personal gain and indicate how C. ASIC can outline a series of approaches and frameworks
Sarah would likely behave. Thus, these options are more likely to that will aid in resolving these issues
indicate psychological theo D. ASIC can develop a greater understanding of the
situations and pressures that professional accountants
Module: 2 > Part: B > 2.5 Normative theories > Page: 51 face so as to develop the correct tools to feed back into
the industry
2. The other options give rise to personal gain and indicate
how Sarah would likely behave. Thus, these options are more Answer:
likely to indicate psychological theory. A. ASIC can request correction of the financial statements
and even at times request court action
Which of the following theories focuses on the duty or A is Correct (page 44, 46). One of ASIC's role is to make certain
intention to act ethically? that entities apply the correct accounting standard to a situation.
A. Utilitarianism. B, C & D are incorrect as these are not with the scope of ASIC's
B. Justice theory. role.
C. Ethical egoism.
D. Restricted egoism. Module: 2 > Part: A > 2.2 Ethics - an overview > Page: 44
Answer: 5. Which of the following is not an ethical responsibility of a
B. Justice theory professional accountant?
B is correct because Deontological theories focus on the duty or
intention to act ethically. Therefore, B is the only theory that is a A. Prudent use of relevant knowledge and expertise
subject of Deontological theories. B. To adhere to a professional code of ethics and standards
C. To limit loss and resolve the situation as quickly as
The other options relate to teleological theories which focuses possible
more on the consequences of an action or decision. D. To utilize reasonable skills and knowledge
Module: 2 > Part: B > 2.7 Deontological theories (duty based) > 0 Answer:
> Page: 56-57 C. To limit loss and resolve the situation as quickly as
possible
3. The other options relate to teleological theories which C is correct (page 43). This is an ethical action feeding from the
focuses more on the consequences of an action or decision. above correct (A, B & D) responsibilities.
Module: 2 > Part: A > 2.1 Impact of ethical or unethical decisions >
Which of the following is a theory that would most likely 0 > Page: 43
result in the greatest benefits being received by the greatest
number of people?
A. Utilitarianism.
B. Justice theory.
C. Restricted egoism.
D. Deontological theory.
, 2
6. Which of the following is a limitation of the Utilitarianism? 9. Sarah and Jane work at the same accounting firm in very
A. The pursuit of self-interest must not be at the expense of similar positions. Jane takes long lunch breaks and is often
others on Facebook during the working day even whereas Sarah
B. Identifying and articulating the problem seldom gets distracted by social media and works quickly
C. Identifying the laws that dictate the ethical action and logically through her daily duties. Sarah gets promoted
D. Working out a numerical value to assign to as her boss recognises the effort she is putting into her work.
consequences
Which principle of justice is identified in this situation?
Answer:
D. Working out a numerical value to assign to consequences A. Needs Principle
D is correct (page 55) as this is difficult and subjective and B. Equality Principle
therefore is classified as a limitation. C. Merit Principle
D. Rights Principle
B is one of the five basic steps. A & C relate to Egoism
Answer:
Module: 2 > Part: B > 2.6 Teleological (consequential) theories > C. Merit Principle
Page: 55 C is correct (page 57) as the merit principle refers to a person
being rewarded for their efforts.
7. You finally see a car park spot at a busy shopping center,
but someone has left a trolley blocking the parking. You jump B & C are justice principles but the situation is not about an equal
out your car and move the trolley to closest opening and then share of based on need.
park your car. You look at the trolley and it is not likely to
affect any other drivers where it is, so you leave it and go into D is not a justice principle.
the shopping center.
Module: 2 > Part: B > 2.7 Deontological theories (duty based) >
Which theory has been identified in this scenario? Page: 57
A. Ethical Egoism 10. There are 8 members in the accounting team, given the
B. Utilitarianism performance of the team over the last year the management
C. Restricted Egoism have agreed to award the team with an annual bonus of
D. Selfishness $1,000 each.
Answer: What justice principle is being applied in relation to the
A. Ethical Egoism distribution of the bonus?
A is correct (page 53). You have weighed up the costs and
benefits for yourself in deciding what to do. A. Merit Principle
B. Equality principle
Had you parked the trolley in the trolley bay in line with shopping C. Needs Principle
center rules B or C would've applied based on the situation. D. Rights principle
D would apply if you had parked the trolley behind someone else's Answer:
car to save yourself time. B. Equality principle
B is correct (page 57). Although the overall team may have been
Module: 2 > Part: B > 2.6 Teleological (consequential) theories > rewarded based on merit, each member of the team received an
Page: 53 equal portion of the allocated bonus irrespective of individual work
done.
8.. Which of the following is not a normative theory
A. Utilitarianism Merit (A) is based on individual reward. Needs (C) is based on
B. Psychological theory what you need rather than what you have done and rights (D) is
C. Ethical Egoism an ethical theory not a justice principle.
D. Rights and justice
Module: 2 > Part: B > 2.7 Deontological theories (duty based) >
Answer: Page: 57
B. Psychological theory
B is correct (page 52). Psychological theory deals with how people
actually behave where all the other options deal with how people
should behave which is the basis of normative theory
.
Module: 2 > Part: B > 2.6 Teleological (consequential) theories >
Page: 52
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