All of the following are ethical issues that have been raised in recent corporate scandals, such as Tyco and EXCEPT:

• A. Falsifying business records
• B. Using corporate funds for personal gain
• C. Distorting financial results to increase the price of the company's stock
• D. False advertising with respect to the companies' products

Answer: (D)

False advertising with respect to products is not the hallmark of the corporate governance scandals typified by Tyco. The main ethical failings in those cases involve deceit and misuse of corporate resources: falsifying business records, which hides improper activity; using corporate funds for personal gain, a direct misappropriation of assets; and distorting financial results to inflate the stock price, which deceives investors about the company’s true performance. While false advertising is unethical and important in its own right, it relates more to marketing ethics and consumer protection than to the governance and financial manipulation issues seen in those scandals.