A Code of Ethics Is an Important Element of a Fraud

question 88

Multiple Choice

A code of ethics is an important element of a fraud prevention program.Which of the following would diminish the effectiveness of a company's code of conduct?

• A) The establishment of a chief ethics officer.
• B) The establishment of a hot line for reporting unethical behavior.
• C) The violation of the code of ethics by senior management.
• D) The posting of the code of ethics in the company workplace.

---

Definitions:

Investment

The distribution of funds or other resources with the aim of achieving income or profit at a later date.

Business Firms

Organizations involved in the trade of goods, services, or both to consumers, operating in an attempt to profit.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.

Expected Returns

The anticipated profit or loss from an investment, considering all potential outcomes and their probabilities.