Which of the following is true regarding the assessment and monitoring of the ethics of a corporate culture?

• A. Once an ethical code is established, ongoing monitoring is unnecessary.
• B. Monitoring ethics is solely the responsibility of external auditors.
• C. Ethical culture assessment is only required when fraud is suspected.
• D. Regular assessment and monitoring help identify ethical risks and reinforce ethical standards within the organization.

Answer: (D)

Verified step by step guidance

1. Understand the importance of corporate culture in financial accounting and ethics. Corporate culture refers to the shared values, beliefs, and practices within an organization that influence decision-making and behavior.
2. Recognize that ethical standards are crucial for maintaining trust and integrity in financial reporting and business operations. Ethical risks can lead to fraud, misrepresentation, or other unethical practices that harm stakeholders.
3. Learn that establishing an ethical code is only the first step. Regular assessment and monitoring are necessary to ensure that the ethical code is being followed and to identify any emerging ethical risks.
4. Understand that monitoring ethics is not solely the responsibility of external auditors. It is a shared responsibility involving management, internal auditors, and other stakeholders within the organization.
5. Accept that ethical culture assessment should be an ongoing process, not limited to situations where fraud is suspected. Regular monitoring helps reinforce ethical standards and proactively address potential risks.