Which of the following statements is true regarding business ethics?

• A. Business ethics is not relevant if a company is following all legal requirements.
• B. Business ethics only applies to financial reporting and not to other business activities.
• C. Business ethics involves applying moral principles to business situations and decisions.
• D. Business ethics is solely the responsibility of top management and not employees.

Answer: (C)

Verified step by step guidance

1. Understand the concept of business ethics: Business ethics refers to the application of moral principles and values to business situations and decisions. It goes beyond legal compliance and encompasses ethical behavior in all aspects of business operations.
2. Evaluate the first statement: 'Business ethics is not relevant if a company is following all legal requirements.' This is incorrect because ethical behavior often involves considerations beyond legal compliance, such as fairness, transparency, and social responsibility.
3. Evaluate the second statement: 'Business ethics only applies to financial reporting and not to other business activities.' This is incorrect because business ethics applies to all areas of business, including marketing, operations, human resources, and customer relations.
4. Evaluate the third statement: 'Business ethics involves applying moral principles to business situations and decisions.' This is correct because it accurately describes the essence of business ethics.
5. Evaluate the fourth statement: 'Business ethics is solely the responsibility of top management and not employees.' This is incorrect because ethical behavior is the responsibility of everyone in the organization, not just top management.