UExcel Business Ethics 2

Question 1

The Sarbanes-Oxley Act (SOX) was enacted primarily to:

Accepted Answer

Increase corporate accountability and protect investors from accounting fraud

Answer

SOX was passed in 2002 following accounting scandals at Enron and WorldCom to improve corporate governance and financial transparency.

Question 2

What does stakeholder theory argue?

Accepted Answer

Companies have obligations to all parties affected by their operations, not just shareholders

Answer

Stakeholder theory holds that businesses should consider the interests of all stakeholders — employees, customers, communities, and shareholders.

Question 3

Which term describes the practice of making misleading environmental claims to appear more eco-friendly?

Accepted Answer

Greenwashing

Answer

Greenwashing involves companies making false or exaggerated claims about environmental friendliness to attract environmentally conscious consumers.

Question 4

Insider trading is illegal because it:

Accepted Answer

Gives unfair advantage to those with non-public information, undermining market integrity

Answer

Insider trading violates securities laws because it allows individuals with privileged non-public information to profit unfairly at others' expense.

Question 5

What is the 'triple bottom line' in sustainable business practice?

Accepted Answer

People, planet, and profit

Answer

The triple bottom line framework measures business performance across social (people), environmental (planet), and financial (profit) dimensions.

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