3. (TCO C) As a professional working for a large electronics firm, Sam found himself riding a roller

coaster of concern about lay-offs. Every few years, top management slashed jobs as work slacked off, but
only to hire again when things were looking up. So when Sam and his team members noticed that the
executives were, again, meeting behind closed doors, they suspected the worst. Sam’s boss revealed to
him that Sam’s team member Jim was slated to lose his job. However, it was made plain that Sam was to
keep this information confidential. Not long after that conversation, Jim approached Sam and asked
whether or not he could confirm the rumor that he would be laid off. What should Sam do? With what
values is Sam dealing? What are the consequences of Sam’s choices?

4. (TCO D) A manager states that as long as the auditor has followed all applicable laws, the auditor has
been ethical. Do you agree? Why or why not?