Inside Job
Discussion Questions
Before answering these questions, you should watch “Inside Job,” read Chapter 2 in your textbook, and
read the 6 articles I’ve posted on my website. You may want to rent the movie and watch it again to
answer some of the following questions.
Kohlberg’s Stages of Moral Development (be prepared to present your perspective on these questions
in class)
1. According to Kohlberg, there are five stages of Moral Development. Can these stages be applied
to a corporation or large organization (e.g., a public accounting firm)? Explain and provide
examples.
2. Regardless of your answer to question 1, based on the movie “Inside Job,” and the assigned
articles, where would you place Goldman Sachs in Kohlberg’s framework?
3. At what level of the organization is the ethical tone established? How is it established? Provide
examples from both the movie and your reading that may help explain how the ethical tone at
Goldman Sachs is established.
Rest’s Four-Component Model of Morality
4. Is Goldman Sachs’ behavior different from that of the other large Wall Street firms, or is it just
more financially successful (at the moment)? Does the model of competition and ethical
behavior described in the article last week by Schleifer apply to Wall Street firms? Should it?
5. Based on what you’ve seen in the movie, where would you place the typical executive in a large
Wall Street firm in Rest’s four-component model of morality? Explain and use examples.
6. What about the professors interviewed in “Inside Job?” Consider specifically the dean of the
Columbia College of Business and the Economics professor (Mishkin was his name I believe) and
the interviews regarding their compensation for writing “research” articles. Under what
circumstances is it ethical for a professor to accept money from an third party to conduct a
research project if that third party is interested in the outcome of the article? Where would you
place Glenn Hubbard (Columbia’s dean) in Rest’s four-component model of morality? Explain
and provide examples.
Ethics vs. Law
7. What is the relationship between ethical behavior and legal behavior? Goldman Sachs appears
to take the position publicly that there was nothing wrong with taking short positions against
the securities it sold to clients, partly because those positions were not substantial and partly
because their clients should be presumed to be sophisticated in financial matters. Do you agree
with this view?
8. Assume that the behavior described in Taibbi’s article, Housewives of Wall Street, is not against
the law. In your view, is it ethical? What does it say about the ethical climate at the firms
involved? Explain.
Ethics and Auditor Judgment
9. Do you think that the ethical “profile” of a client should impact the way an auditor approaches
an audit? Why or why not? What kinds of indicators would you suggest that an auditor look for
in assessing the ethical tone or character of a client or potential client?
10. Now consider the discussion we had previously regarding the appropriate punishment for Betty
Vinson. Do you think, based on what you have read and what you have seen in the movie, that
Goldman Sachs should be punished for its behavior in the last few years? If so, what would be
the appropriate punishment?