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
A company voluntarily discloses a potential FCPA violation to the DOJ before an investigation begins. What is the primary benefit of voluntary self-disclosure?
Answer: Eligibility for reduced penalties and cooperation credit
The DOJ's FCPA Corporate Enforcement Policy rewards voluntary self-disclosure with the possibility of a declination or significantly reduced penalties when combined with full cooperation.
Which ethical theory holds that the morality of an action is determined solely by its consequences and outcomes?
Answer: Consequentialism
Consequentialism (including utilitarianism) judges actions as right or wrong based solely on the outcomes they produce.
Under Sarbanes-Oxley Section 302, who must certify the accuracy of quarterly and annual financial reports?
Answer: CEO and CFO
SOX Section 302 requires the CEO and CFO to personally certify the accuracy of periodic financial reports filed with the SEC.
A compliance officer learns an employee accessed a competitor's confidential files obtained through hacking. This situation most directly involves which ethical concept?
Answer: Misappropriation of confidential information
Accessing confidential files obtained through unauthorized means constitutes misappropriation of confidential information and potentially violates the Computer Fraud and Abuse Act.
Which governance mechanism allows shareholders to remove underperforming directors without a contested election by majority vote?
Answer: Majority voting standard
Under a majority voting standard, directors who receive more 'withheld' votes than 'for' votes must tender their resignation for board consideration.
An anti-money laundering (AML) compliance program must include all of the following EXCEPT:
Answer: Annual criminal background checks on all customers
The Bank Secrecy Act's four pillars of AML compliance are internal controls, a designated compliance officer, employee training, and independent testing — annual criminal background checks on all customers are not required.
When a company adopts a clawback policy under SEC Rule 10D-1, it must recoup incentive compensation erroneously awarded in connection with:
Answer: An accounting restatement due to material noncompliance
SEC Rule 10D-1 (implementing Dodd-Frank) requires clawback of incentive-based compensation paid in the three fiscal years before an accounting restatement triggered by material noncompliance.