Question

Please answer all parts of question number 7 correctly.

Most executives believe that they and their firms behave in an ethical manner and that it is in their best interests to do so. How can a firm's ethical conduct increase its long-term profitability? O Ethical corporate behavior reduces unnecessary legal expenses and the need to pay fines. Ethical corporate behavior is always more costly, because it generally results in more constrained and expensive behaviors. Ethics deals with questions of right or wrong behavior. Which of the following behaviors involves ethical-as opposed to unethical-decision making? 0 while interviewing prospective applicants for a manager-trainee position, the company's recruiter makes O While planning for an upcoming company audit, a manager insists on hiring an external auditing firm to audit O While riding in a taxi, a loan officer with the Fifth County Bank finds a briefcase containing the confidential and sexually suggestive remarks to the applicants and recommends hiring only the good-looking candidates. the company's financial statements. proprietary lending policies of a competing bank. Instead of returning the briefcase, she keeps the competing bank's information and distributes it at the next loan application review meeting. O While considering the purchase of an expensive piece of equipment, a firm's purchasing manager recommends that the purchase be made from his cousin's firm rather than from one of two other vendors offering the identical equipment at lower prices.

Answer 1

How can a firm’s ethical behaviour increase its long term profitability:

Ethical corporate behaviour reduces unnecessary legal expenses and the need to pay fines.

And hence increases profitability by savings costs

Ethical decision making:

While planning for an upcoming company audit, a manager insists on hiring an external auditing firm to audit the financial statements

Since it will provide independent view. All other options are examples of unethical behaviour

SOX

A publicly traded company must have a board of directors that includes                outside directors to oversee the firm’s annual audit.

SOX has very strict provisions. It was enacted to put an end to the corporate scandals