Regulatory Compliance & Governance Flashcards
7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance & Governance flashcards as text
Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) disclosure must be made:
Answer: Before the consumer becomes obligated on the credit transaction
TILA requires creditors to disclose the APR and other key credit terms before the consumer becomes contractually obligated on the loan.
A credit manager is reviewing a customer's credit application and notices the applicant receives alimony income. Under ECOA, the credit manager must:
Answer: Consider alimony as income if the applicant chooses to disclose it and rely on it
Under ECOA, creditors must consider alimony, child support, and separate maintenance payments as income if the applicant chooses to disclose and rely on it.
Which of the following scenarios represents a violation of the Robinson-Patman Act in a B2B credit context?
Answer: Providing volume discounts to large buyers that are not available to smaller buyers in the same market
The Robinson-Patman Act prohibits price discrimination between competing purchasers of commodities of like grade and quality that could harm competition, including favorable terms not available to smaller competitors.
Under the Bank Secrecy Act (BSA), Currency Transaction Reports (CTRs) must be filed for cash transactions that exceed:
Answer: $10,000
The BSA requires financial institutions to file CTRs for cash transactions exceeding $10,000 in a single business day.
A corporate governance best practice requires that the audit committee of a public company's board consist primarily of:
Answer: Independent directors, with at least one financial expert
SOX and stock exchange rules require audit committees to consist of independent directors, with at least one member qualifying as an 'audit committee financial expert.'
Which of the following is an example of a 'clawback' provision in executive compensation governance?
Answer: A requirement to recover previously paid incentive compensation if financials are later restated
A clawback provision requires executives to return previously paid incentive compensation if the company subsequently restates financial results or if misconduct is discovered.
Under GAAP, when should a company recognize a contingent liability related to a pending credit dispute lawsuit?
Answer: When the loss is probable and the amount can be reasonably estimated
Under ASC 450, a contingent liability must be accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated.