The Issue of Ethics in the Reporting of Income and the Payment

question 5

Multiple Choice

The issue of ethics in the reporting of income and the payment of taxes is a considerable one. The authors state that most MNEs operating in foreign countries tend to follow the general principle of:

• A) "when in Rome, do as the Romans do."
• B) full disclosure to the tax authorities.
• C) maintain a competitive playing field by cheating as much as the local competition, no more, no less.
• D) none of the above

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Definitions:

Profit Rate

The ratio of net profits to total revenues of a business, indicating its efficiency at generating profit.

Inventory

The total amount of goods and raw materials held by a business to facilitate production or meet customer demand.

Invest

The action of designating assets, typically capital, in hopes of generating financial gains.

Profit Rate

The ratio of profits generated to the amount of capital or resources invested, indicating the efficiency of an investment or business operation.