Chapter 1
WorldCom employee who is credited for unveiling the fraud that brought down the company.
Who is Cynthia Cooper?
Obedience to the rules, satisfying one's own needs, fairness to others, law and order, social contract, and universal ethical principles.
What are Kohlberg's stages of moral development?
India's Enron
What is Satyam?
Underlying values of an accountants including objectivity, integrity, due care, professional skepticism, and an independent mindset.
What is professional judgement?
Those primarily responsible for the prevention and detection of fraud in financial statements.
Who are those charged with governance, and management.
Act on principle.
What is integrity?
First step in moral behavior.
What is moral sensitivity?
A company's underlying sense of values and identity.
What is company culture?
An accountant's ability to keep a questioning mind.
What is professional skepticism?
Opportunity, pressure, and rationalization.
What is the fraud triangle?
Do unto others as you would have them do unto you.
What is the Golden Rule?
An individual's cognition of what ought to be done in an ethical dilemma.
What is prescriptive reasoning?
Pressure to maintain the numbers, fear of reprisals, loyalty to the boss, and weak board of directors.
What are the signs of an ethical collapse?
The process of reaching a conclusion or decision when multiple alternatives are possible.
What is judgement?
A letter attesting as to the fair presentation of a company's financial statements.
What is an audit option letter?
Right and wrong, or good and bad, are not absolute but variable and relative, depending on the person, circumstances and situation.
How well an individual's intentions to act ethically, align with her actions.
Something easily lost, but hard to grow or win back in corporate culture.
What is trust?
A CPA reviews evidence during an audit based on the firm's nonattest services.
What is self-review threat?
The kind of assurance given during an attest engagement.
What is reasonable assurance?
Trustworthiness (Honesty, Integrity, Reliability, Loyalty), Respect, Responsibility, Fairness, Caring, and Citizenship
What are the Six Pillars of Character?
Our mind's ability to simultaneously hold our beliefs and actions separately to avoid conflict and keep harmony.
What is cognitive dissonance?
Deliberate misrepresentation to gain an advantage over another party.
What is fraud?
When a close relationship between the firm, CPA, client, and/or managers develops.
What is familiarity threat?
The concept that some matters (audit areas or amounts) are more important to the fair presentation of financial statements than others.
What is materiality?