When the CEO confronts the CFO about the possibility that the payment

QUESTION

When the CEO confronts the CFO about the possibility that the payment that Bexhill received from Okoli was unethical, the CFO responds by saying that nothing about the transaction was illegal.

Which of the following assumptions does this defense rest on?
A) Nigerian laws differ from U.S. laws covering cases like these.
B) U.S. laws pertain only to transactions between U.S. companies.
C) Bexhill’s business dealings are always approved by one or more executives.
D) Okoli’s executives had full knowledge of the transaction.
E) Any activity that is legal is also ethical.

ANSWER

Answer: E
Explanation: E) If legality were the only test for ethicality, then ensuring that the law is not broken would be all that it took to decide that a given activity was ethical. Choice A: This assumption is not necessary since the transaction could be both legal and ethical if U.S. and Nigerian laws on the subject were the same. Choice B: This assumption is not necessary since the transaction could be both legal and ethical even if U.S. laws covered it. Choice C: This assumption is not necessary since the transaction could be both legal and ethical even if executives had not specifically approved it. Choice D: This assumption is not necessary since the transaction could be both legal and ethical even if Okoli’s executives did not have full knowledge of the transaction.