GRC GRC Ethics, Culture, and Stakeholder Accountability 1 — Questions and Answers
Question 1: In a GRC context, 'tone at the top' refers to:
- The volume level of executive presentations
- Senior leadership's visible commitment to ethical behavior and compliance (Correct answer)
- The frequency of board-level GRC reporting
- The topmost tier of a risk classification matrix
Correct answer: Senior leadership's visible commitment to ethical behavior and compliance
Tone at the top describes the ethical climate and culture of compliance that senior leaders establish through their own behavior and communications, which sets expectations throughout the organization.
Question 2: Which of the following best defines a 'code of conduct' in a corporate compliance program?
- A set of programming standards for IT developers
- A formal document outlining the ethical principles and behavioral expectations for all employees (Correct answer)
- A regulatory filing submitted to the SEC annually
- A contract between the company and its external auditors
Correct answer: A formal document outlining the ethical principles and behavioral expectations for all employees
A code of conduct articulates the organization's values, ethical principles, and standards of behavior expected from employees, officers, and directors.
Question 3: A robust whistleblower program in a GRC framework is designed primarily to:
- Encourage anonymous reporting of misconduct without fear of retaliation (Correct answer)
- Track employee overtime and attendance violations
- Manage relationships with external media outlets
- Automate compliance training completion records
Correct answer: Encourage anonymous reporting of misconduct without fear of retaliation
A whistleblower program provides a safe, confidential channel for employees to report suspected fraud, misconduct, or compliance violations without facing retaliation.
Question 4: The Sarbanes-Oxley Act (SOX) Section 301 requires publicly traded companies to establish:
- An independent audit committee with authority to oversee financial reporting and whistleblower complaints (Correct answer)
- A chief ethics officer reporting directly to the CEO
- Annual employee ethics surveys submitted to the SEC
- A mandatory corporate social responsibility report
Correct answer: An independent audit committee with authority to oversee financial reporting and whistleblower complaints
SOX Section 301 mandates that the audit committee of the board be independent and have procedures for receiving and addressing complaints about accounting and internal control matters.
Question 5: Which of the following represents an example of a conflict of interest in a GRC setting?
- An employee using company equipment for an authorized work task
- A procurement officer awarding a contract to a vendor in which they hold a financial interest (Correct answer)
- A manager approving a colleague's expense report after reviewing receipts
- An auditor reviewing a business unit they have never previously worked in
Correct answer: A procurement officer awarding a contract to a vendor in which they hold a financial interest
A conflict of interest occurs when a person's private interests could improperly influence their professional decisions, such as a procurement officer financially benefiting from a vendor selection.
Question 6: The primary purpose of ethics training in a compliance program is to:
- Satisfy annual HR audit requirements with no practical effect
- Help employees recognize ethical dilemmas and make decisions aligned with organizational values and legal requirements (Correct answer)
- Teach employees how to avoid detection of minor policy violations
- Reduce the need for internal audit activity
Correct answer: Help employees recognize ethical dilemmas and make decisions aligned with organizational values and legal requirements
Ethics training builds employee awareness and judgment so they can identify and navigate ethical situations in accordance with the organization's values and applicable laws.
GRC GRC Ethics, Culture, and Stakeholder Accountability 1
In a GRC context, 'tone at the top' refers to: