Jed Wimsey,in Auditing the Books of Various Businesses Around Town,was

question 152

Multiple Choice

Jed Wimsey,in auditing the books of various businesses around town,was talking to you,his best friend,about certain practices that he thought improper.Which of the following practices he found would be a breach of fiduciary duty?

• A) A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home.
• B) A director of a corporation profited $25 000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote.
• C) The directors failed to declare a dividend for the fourth year in a row.
• D) An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors.
• E) A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations.

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Definitions:

Stereotyping

Simplifying complex individuals to generalized traits or categories based on their group membership, ignoring personal differences.

Attribution

An assignment of a cause to explain one’s own or another person’s behavior.

Situational Attribution

The process of explaining someone's behavior based on external factors or the context of the situation rather than on internal characteristics.

Milgram's Study

A landmark psychological experiment conducted by Stanley Milgram which demonstrated people's willingness to obey authority, even to the extent of causing harm to others.