CEA Professional Conduct & Organizational Ethics 3 — Questions and Answers
Question 1: Which term describes the gradual erosion of ethical standards within an organization over time?
- Moral disengagement
- Ethical drift (Correct answer)
- Value alignment
- Normative framing
Correct answer: Ethical drift
Ethical drift occurs when small, incremental compromises accumulate over time, shifting organizational norms away from ethical standards.
Question 2: An employee refuses to follow a supervisor's instruction because it violates company policy. This is an example of:
- Insubordination
- Ethical courage (Correct answer)
- Groupthink resistance
- Conflict of interest
Correct answer: Ethical courage
Ethical courage involves standing firm on ethical principles even when facing pressure from authority figures.
Question 3: Which of the following is a key component of an effective organizational ethics program?
- Voluntary ethics training for senior management only
- A confidential reporting mechanism for ethical violations (Correct answer)
- Leaving ethics decisions entirely to individual employees
- Publicly posting all internal ethics complaints
Correct answer: A confidential reporting mechanism for ethical violations
A confidential reporting mechanism (such as a hotline) is a foundational element of any effective ethics program.
Question 4: An employee who witnesses misconduct but does nothing because 'everyone does it' is exhibiting which cognitive bias?
- Confirmation bias
- Social proof (Correct answer)
- Anchoring bias
- Status quo bias
Correct answer: Social proof
Social proof is the tendency to assume behavior is acceptable because others are engaging in it, which can normalize unethical conduct.
Question 5: A manager rewards employees based on results alone without regard to how those results were achieved. What ethical concern does this create?
- It promotes fairness
- It may incentivize unethical means to achieve goals (Correct answer)
- It ensures accountability
- It reduces conflicts of interest
Correct answer: It may incentivize unethical means to achieve goals
When only outcomes are rewarded, employees may feel pressure to use unethical means to meet targets.
Question 6: According to best practices for CEA, an organization's code of ethics should be:
- Vague to allow flexibility in interpretation
- Specific enough to provide clear guidance on expected behaviors (Correct answer)
- Only distributed to management
- Updated once every decade
Correct answer: Specific enough to provide clear guidance on expected behaviors
Codes of ethics should provide clear, actionable guidance so employees understand expected behaviors in various situations.
Question 7: Which of the following scenarios represents a structural conflict of interest?
- An employee accepting a small thank-you gift from a client
- An auditor reviewing the financial statements of a firm in which he owns stock (Correct answer)
- A manager hiring a highly qualified relative after a formal interview process
- An employee requesting a day off for a religious holiday
Correct answer: An auditor reviewing the financial statements of a firm in which he owns stock
An auditor owning stock in the firm being audited creates a structural conflict of interest because personal financial gain is tied to the audit outcome.
CEA Professional Conduct & Organizational Ethics 3
Which term describes the gradual erosion of ethical standards within an organization over time?