Practice Test Geeks(CCT) Certified Compliance Technician Practice Test
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Ethics & Corporate Governance Flashcards

7 cards from real CCT practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Ethics & Corporate Governance flashcards as text

  1. A compliance officer discovers that the CEO approved a transaction that personally benefited the CEO's spouse. Which governance concept is most directly implicated?

    Answer: Duty of loyalty conflict of interest

    A duty of loyalty conflict of interest arises when a director or officer acts in a way that benefits themselves or related parties rather than the corporation.

  2. Under the Foreign Corrupt Practices Act (FCPA), which of the following is NOT considered a 'foreign official'?

    Answer: A private company employee with no government ties

    The FCPA defines foreign officials as government employees, state-owned enterprise officers, and political party officials, but not employees of purely private companies.

  3. Which governance structure element is primarily responsible for overseeing the independence of the external auditor?

    Answer: Audit committee

    The audit committee is charged with selecting, overseeing, and ensuring the independence of the external auditor under SEC rules and listing standards.

  4. A company's code of ethics requires employees to report suspected fraud. An employee who remains silent to protect a colleague is most likely violating which principle?

    Answer: Duty to report

    Codes of ethics typically impose a mandatory duty to report suspected misconduct, and silence in the face of known fraud violates that obligation.

  5. The 'three lines of defense' model assigns internal audit to which line?

    Answer: Third line

    Internal audit serves as the third line of defense by providing independent assurance over the effectiveness of the first and second lines.

  6. Which Dodd-Frank provision most directly incentivizes employees to report securities law violations to the SEC?

    Answer: Whistleblower award program

    Dodd-Frank's whistleblower award program offers monetary rewards of 10–30% of sanctions exceeding $1 million to individuals who report securities violations to the SEC.

  7. When assessing whether a board director is 'independent' under NYSE listing standards, which relationship would disqualify independence?

    Answer: Former employee of the company within the last three years

    NYSE standards disqualify directors who were employees of the listed company within the preceding three years from being classified as independent.