Which of the Following Statements Is CORRECT

question 19

Multiple Choice

Which of the following statements is CORRECT?

• A) If a lower level person in a firm does something illegal, like "cooking the books" to understate costs and thereby artificially increase profits because he or she was ordered to do so by a superior, the lower level person cannot be prosecuted but the superior can be prosecuted.
• B) There are many types of unethical business behavior. One example is where executives provide information that they know is incorrect to outsiders. It is illegal to provide such information to federally regulated banks, but it is not illegal to provide it to stockholders because they are the owners of the firm.
• C) If someone deliberately understates costs and thereby causes reported profits to increase, this can cause the price of the stock to rise above its intrinsic value. The stock will probably fall in the future. Both those who participated in the fraud and the firm itself can be prosecuted.
• D) Ethical behavior is not influenced by training and auditing procedures. People are either ethical or they are not, and this is what determines ethical behavior in business.

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Definitions:

Ulcerative Colitis

A chronic inflammatory bowel disease causing ulceration in the lining of the colon and rectum.

Paralytic Ileus

A condition where there is a lack of movement in the intestines that can cause a build-up and potential blockage of food material, leading to a temporary stop in bowel movements.

Stomatitis

An inflammation of the mouth and lips, which can cause redness, swelling, pain, and sometimes sores in the oral cavity.

Volvulus

A medical condition in which a loop of the intestine twists around itself and the mesentery that supports it, causing an intestinal blockage.