Question 1

Which ethical principle suggests that actions should be guided by principles that could be universally applied?

Accepted Answer

c) Deontology

Question 2

What is the term for a situation where a business exaggerates the benefits of its products in advertising?

Accepted Answer

a) Misrepresentation

Question 3

Sustainability in business mainly means:

Accepted Answer

Sustainability focuses on long-term balance—**present needs** without harming the **future** (concept).

Question 4

Which practice best supports privacy-by-design?

Accepted Answer

Privacy-by-design uses **data minimization**, clear purpose, and secure defaults from the start (concept).

Question 5

Which is NOT a commonly stated principle of corporate governance?

Accepted Answer

Good governance requires **transparency**, not secrecy (concept).

Question 6

A whistleblowing/vigil mechanism is mainly intended to:

Accepted Answer

A vigil mechanism supports safe reporting and improves ethical culture and governance (overview).

Question 7

Virtue ethics is best described as:

Accepted Answer

Virtue ethics is **character-based** (integrity, fairness, courage, prudence) (concept).

Question 8

Which ethical theory focuses on the inherent moral character of individuals?

Accepted Answer

b) Virtue ethics

Question 9

A conflict of interest occurs when:

Accepted Answer

A **conflict of interest (COI)** arises when personal interest affects (or appears to affect) professional judgment (concept).

Question 10

Related Party Transaction (RPT) controls are important mainly to:

Accepted Answer

RPT oversight reduces **conflicts of interest** and improves **fairness** (concept).

Question 11

What is the practice of disclosing a companys financial information accurately and transparently to stakeholders?

Accepted Answer

a) Financial transparency

Question 12

What is the term for a situation where a persons private interests conflict with their professional duties?

Accepted Answer

c) Conflict of interest

Question 13

CSR stands for:

Accepted Answer

**CSR** means Corporate Social Responsibility—operating ethically and contributing to society (concept).

Question 14

"Tone at the top" refers to:

Accepted Answer

Leadership behavior sets ethical culture; strong **tone at the top** reduces misconduct (concept).

Question 15

Cybersecurity ethics is important mainly because cyber incidents can:

Accepted Answer

Cyber incidents can cause harm (data theft, fraud), so ethical duty is to ensure **reasonable security** (concept).

Question 16

A simple way to describe the difference between Companies Act provisions and SEBI LODR is:

Accepted Answer

Companies Act is broad company law; SEBI LODR emphasizes **listing obligations** and **disclosures** (concept).

Question 17

Business ethics is best described as:

Accepted Answer

Business ethics is **practical** and **dynamic**, guiding conduct across business functions (concept).

Question 18

Which of the following is a common ethical challenge in international business?

Accepted Answer

a) Cultural relativism

Question 19

Companies Act governance provisions generally relate to:

Accepted Answer

Company law provisions support board oversight, **audits**, compliance and **disclosures** (overview).

Question 20

A code of conduct is mainly used to:

Accepted Answer

A **code of conduct** states expected behavior (ethics, gifts, COI, etc.) (concept).

Question 21

Define compliance.

Accepted Answer

**Compliance** means following applicable laws, regulations, standards and internal policies (concept).

Question 22

Write one difference between privacy and security.

Accepted Answer

**Privacy** is proper use of personal data (consent/purpose), while **security** protects data from unauthorized access (concept).

Question 23

State any one principle of corporate governance.

Accepted Answer

**Accountability** (answerability for decisions and performance) is a key principle of corporate governance (concept).

Question 24

Write any one example of a virtue in business.

Accepted Answer

**Integrity** (honesty and consistency in actions) is a key virtue in business (any one virtue like fairness/courage is acceptable) (concept).

Question 25

An ethical dilemma means a situation with conflicting values. (True/False)

Accepted Answer

True. An **ethical dilemma** occurs when values/principles conflict (e.g., profit vs safety) and the right choice is not obvious (concept).

Question 26

Non-executive directors are generally not involved in day-to-day management. (True/False)

Accepted Answer

True. **Non-executive directors** focus on oversight and guidance rather than daily operations (concept).

Question 27

Who are "principals" and "agents" in agency theory? (One line.)

Accepted Answer

**Principals** are owners/shareholders and **agents** are managers/executives who run the company on their behalf (concept).

Question 28

Internal control provides reasonable assurance, not absolute assurance. (True/False)

Accepted Answer

True. Internal controls provide **reasonable assurance** because no system can eliminate all risk (concept).

Question 29

Stakeholder approach focuses only on shareholders. (True/False)

Accepted Answer

False. The **stakeholder approach** considers responsibilities to employees, customers, suppliers, government and society along with shareholders (concept).

Question 30

Define business ethics.

Accepted Answer

Business ethics is the application of **moral principles** and standards of **right and wrong** to business decisions and behavior (concept).

Question 31

Differentiate Companies Act (broad) and SEBI LODR (broad) in a table (any three points).

Accepted Answer

Basic differences (concept):

| Basis | Companies Act (broad) | **SEBI LODR** (broad) |
|---|---|---|
| Applicability | companies in general | **listed entities** |
| Focus | board duties, audits, compliance | **listing obligations** + **disclosures** |
| Purpose | accountability + legal compliance | investor protection + transparency |

Any three differences are sufficient.

Question 32

Explain greenwashing and write any three ways to prevent it (use a table).

Accepted Answer

**Greenwashing** means making misleading claims about environmental performance (concept).

Prevention (any three):

| Measure | How it helps (concept) |
|---|---|
| verified/assured reporting | improves credibility |
| clear KPIs and data | reduces vague claims |
| transparent disclosures | allows scrutiny |
| board oversight | accountability in ESG communication |

Write any three measures.

Question 33

List any three key mechanisms of corporate governance (use a small table).

Accepted Answer

Any three key mechanisms (concept):

| Mechanism | Role |
|---|---|
| **Board oversight** | monitors management and sets direction |
| Audit & **internal controls** | prevent/detect fraud and improve reporting |
| **Disclosures** | ensure transparency to investors/regulators |
| Policies/codes | code of conduct, whistleblowing (overview) |

Write any three with one-line role.

Question 34

Differentiate CSR, sustainability and ESG (any three points) using a table.

Accepted Answer

Differences (concept):

| Term | Focus | Meaning |
|---|---|---|
| **CSR** | social responsibility | ethical contribution to society |
| **Sustainability** | long-term balance | people/planet/profit over time |
| **ESG** | measurement framework | E/S/G factors to evaluate performance |

Any three differences are sufficient.

Question 35

Write any three examples of control activities (use bullet points).

Accepted Answer

Examples of control activities (any three) (concept):

- **approvals** and authorization limits
- segregation of duties (maker–checker)
- reconciliations (bank/vendor/customer)
- access controls and audit trails (overview)

Write any three examples.

Question 36

Explain data privacy and key principles (exam-style) using a table.

Accepted Answer

### Meaning
**Data privacy** is the right to control collection and use of personal information (concept).

### Key principles (table)

| Principle | Meaning (concept) |
|---|---|
| **Consent** | collect/use data with permission and lawful purpose |
| Purpose limitation | use only for stated purpose |
| Data minimization | collect only what is necessary |
| Transparency | clear notices and communication |
| Security safeguards | protect against unauthorized access (overview) |

Conclusion: Privacy principles protect rights and build trust in digital business (concept).

Question 37

Explain business ethics: meaning, nature and importance (exam-style).

Accepted Answer

### Meaning
**Business ethics** means applying **moral principles** (right and wrong) to business decisions and conduct (concept).

### Nature (any three)
- **Normative**: guides what ought to be done (concept)
- **Practical/applied**: used in real business situations (concept)
- **Dynamic**: evolves with society and technology (overview)
- **Stakeholder-oriented**: considers impacts on others (concept)

### Importance (any four)
- builds **trust** and reputation
- improves employee morale and discipline
- reduces unethical practices (fraud/bribery)
- supports long-term sustainability and good governance (concept)

Conclusion: Ethics strengthens responsible decision-making and supports sustainable success (concept).

Question 38

Explain governance framework in India: key components, board structure and independent directors (exam-style) with a table.

Accepted Answer

### Key components (overview)
India’s governance framework includes broad company law provisions (board duties, audits, compliance) and securities market rules for listed entities emphasizing **disclosures** (concept).

### Board structure and independence (table)

| Element | What it means | Why it matters (concept) |
|---|---|---|
| **Executive** directors | manage operations | operational insight |
| Non-executive directors | oversight role | monitoring and guidance |
| **Independent** directors | objective non-executives | reduces conflicts; protects minority shareholders |

Conclusion: Strong board independence improves transparency and accountability (concept).

Question 39

Explain CSR and sustainability: meaning and benefits (exam-style) with a table.

Accepted Answer

### Meaning
- **CSR**: ethical responsibility + contribution to social welfare (concept)
- **Sustainability**: long-term balance of resources and stakeholder interests (concept)

### Benefits (any four)
- improves **trust** and brand reputation
- improves employee engagement and retention
- reduces regulatory/legal risk (overview)
- long-term cost savings (energy and waste efficiency)
- better investor confidence (ESG focus) (overview)

### Quick table

| Area | Benefit (concept) |
|---|---|
| People | welfare, community trust |
| Planet | reduced pollution and waste |
| Profit | long-term resilience |

Conclusion: Responsible practices support sustainable growth (concept).

Question 40

Explain internal control components (control environment, risk assessment, control activities, communication, monitoring) with a table.

Accepted Answer

### Internal control components (concept)

| Component | What it means (concept) | Example |
|---|---|---|
| **Control environment** | tone at the top, ethics, responsibility | code of conduct, accountability |
| Risk assessment | identify/prioritize risks | risk register |
| Control activities | procedures to reduce risk | approvals, segregation |
| Communication | reporting/documentation | dashboards, SOPs |
| Monitoring | review effectiveness | internal audit, follow-up |

Conclusion: Components work together to reduce errors and fraud (concept).

Business Ethics and Corporate Governance — Question Paper

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