Q&A Hero

Q: (p. 127) The _____ is a government agency established to prevent banks from failing and otherwise threatening the stability of the U.S. economy.

Q: (p. 127) The _____ is a government agency within the Federal Reserve that oversees financial products and services.

Q: (p. 126) The _____ was legislation promoted as the "fix" for the extreme mismanagement of risk in the financial sector that led to a global financial crisis in 2008-2010.

Q: (p. 123) _____ of the Sarbanes-Oxley Act focuses on issues related to corporate tax returns.

Q: (p. 122) _____ of the Sarbanes-Oxley Act focuses on issues related to auditor independence.

Q: (p. 122) Under the Sarbanes-Oxley Act, any public accounting firms that audited the records of publicly traded companies were required to register with the _____.

Q: (p. 122) The Public Company Accounting Oversight Board was established under the _____ Act.

Q: (p. 122) The _____ was hailed as one of the most important pieces of legislation governing the behavior of accounting firms and financial markets since the Securities and Exchange Commission legislation in the 1930s.

Q: (p. 119) Under the FSGO, the _____ is warranted where the organization was operating primarily for a criminal purpose.

Q: (p. 119) Under the FSGO, the _____ is a fine that is set high enough to match all the organization's assets and basically put the organization out of business.

Q: (p. 119) Under the FSGO, the base fine multiplied by the _____ gives the total fine amount.

Q: (p. 119) Under the Federal Sentencing Guidelines for Organizations, the _____ is calculated by multiplying the base fine up to 4 times.

Q: (p. 118) _____ are facilitating payments to foreign officials in order to expedite or secure the performance of a routine governmental action.

Q: (p. 118) _____ are payments of money or anything else of value to influence or induce any foreign official to act in a manner that would be in violation of his or her lawful duty.

Q: (p. 116) Under the Foreign Corrupt Practices Act, a _____ refers to any regular administrative process or procedure, excluding any action taken by a foreign official in the decision to award new or continuing business.

Q: (p. 116) The Foreign Corrupt Practices Act finds facilitation payments acceptable provided they expedite or secure the performance of a _____.

Q: (p. 116) The Foreign Corrupt Practices Act was criticized because it formally recognized _____.

Q: (p. 116) Prior to the passing of the Foreign Corrupt Practices Act, illegal corporate behavior was punishable only through "secondary" sources of legislation like the _____, which required full disclosure of funds that were taken out of or brought into the United States.

Q: (p. 116) The introduction of the _____ placed more effective controls over bribing practices and less obvious forms of payment to foreign officials and politicians by American publicly traded companies pursuing international growth. Foreign Corrupt Practices Act

Q: (p. 127) The _____ proposed that there should be a key restriction in the legislation to limit the ability of banks to trade on their own accounts (termed proprietary trading). A. Sarbanes-Oxley Act B. Volcker rule C. Campbell's rule D. Foreign Corrupt Practices Act

Q: (p. 127) The _____ is a government agency established to prevent banks from failing and otherwise threatening the stability of the U.S. economy. A. Commodity Futures Trading Commission B. Financial Stability Oversight Council C. Consumer Financial Protection Bureau D. Ethics Resource Center

Q: (p. 127) The _____ is a government agency within the Federal Reserve that oversees financial products and services. A. Consumer Financial Protection Bureau B. Ministry of Internal Affairs C. Ethics Resource Center D. Public Company Accounting Oversight Board

Q: (p. 126) The _____ refers to the legislation that was promoted as the "fix" for the extreme mismanagement of risk in the financial sector that led to a global financial crisis in 2008-2010. A. Trust Indenture Act B. Sarbanes-Oxley Act C. Dodd-Frank Wall Street Reform and Consumer Protection Act D. Foreign Corrupt Practices Act

Q: (p. 125) In September and October 2008, financial markets around the world suffered a severe crash, as: A. there was aggressive lending to subprime borrowers in a deregulated environment. B. the Public Company Accounting Oversight Board (PCAOB) was disbanded, allowing auditors to work unregulated. C. the assets of American companies overseas were seized by the Federal Sentencing Guidelines for Organizations. D. all publicly traded firms only used the services of auditors affiliated with the PCAOB.

Q: (p. 123) Title XI of the Sarbanes-Oxley Act focuses on: A. corporate social responsibility. B. enhanced financial disclosures. C. corporate fraud and accountability. D. auditor independence.

Q: (p. 123) _____ of the Sarbanes-Oxley Act addresses issues related to corporate and criminal fraud accountability. A. Title I B. Title XII C. Title XIII D. Title VIII

Q: (p. 123) Which of the following is true of the Sarbanes-Oxley Act (SOX)? A. It helped disband the Public Company Accounting Oversight Board. B. It protects employees of companies who provide evidence of fraud. C. It prohibits a CEO from signing the company's federal income tax return. D. It considers whistle-blowing a white collar crime.

Q: (p. 122) Title II of the Sarbanes-Oxley Act: A. allows public accounting firms to audit a company whose CEO was employed by the firm within the past 12 months. B. disbanded the Public Company Accounting Oversight Board and allows publicly traded companies to be audited independently. C. requires senior auditors to rotate off an account every five years, and junior auditors every seven years. D. permits auditors to keep written communications between management and themselves private.

Q: (p. 122) The creation of the _____ was an attempt to reestablish the perceived independence of auditing companies after the corporate accounting scandals of the early 2000s. A. Securities and Exchange Commission B. Consumer Financial Protection Bureau C. Federal Labor Relations Authority D. Public Company Accounting Oversight Board

Q: (p. 122) The _____ is a legislative response to the corporate accounting scandals of the early 2000s that cover the financial management of businesses. A. Sarbanes-Oxley Act B. Trust Indenture Act C. Equal Opportunity Act D. Foreign Corrupt Practices Act

Q: (p. 119-120) Which of the following is true of the effective compliance program prescribed by Federal Sentencing Guidelines for Organizations? A. A high-level official (such as a corporate ethics officer) must be in charge of and accountable for the compliance program. B. Individuals should be granted excessive discretionary authority, as that would reduce the risk of criminal conduct. C. Criminal offenses must generate an appropriate response, analysis, and corrective action, but not on the basis of suspicion. D. An organization must be strict to address criminal misconduct in a consistent manner but should avoid penalizing employees for it.

Q: (p. 119) Under the FGSO, the death penalty: A. can only be conferred upon multinational corporations and not on smaller businesses. B. allows the state to appropriate half of the organization's total assets. C. is warranted where the organization was operating primarily for a criminal purpose. D. cannot be levied upon organizations if it means putting them out of business.

Q: (p. 119) The _____ is a fine that is set high enough to match all the organization's assets and effectively puts the organization out of business. A. prohibition payment B. death penalty C. facilitation payment D. relative penalty

Q: (p. 119) The maximum penalty that a judge can impose upon an organization for violating the Federal Sentencing Guidelines for Organizations is a penalty worth: A. a tenth of the organization's assets. B. a quarter of the organization's assets. C. half of the organization's assets. D. the full amount of the organization's assets.

Q: (p. 119) The formula used to calculate the total fine sentenced by the Federal Sentencing Guidelines for Organizations (FSGO) is: A. the base fine multiplied by the culpability score. B. the base fine plus the culpability score. C. the base fine minus the culpability score. D. the base fine divided by the culpability score.

Q: (p. 119) Which of the following is true of the culpability score? A. It can be increased or decreased according to predetermined factors. B. It is calculated before the base fine of an organization is determined. C. It plays no role in calculating monetary fines under the FSGO. D. It is a multiplier of the base fine with a maximum of 2.

Q: (p. 118) Which of the following is true of the Federal Sentencing Guidelines for Organizations (FSGO)? A. The FSGO has a very narrow definition of an organization. B. The FSGO cannot levy monetary fines on organizations that violate its stipulations. C. The FSGO does not hold organizations responsible for their employees' criminal activities. D. The FSGO includes an exhaustive list of covered business crimes.

Q: (p. 118) The Federal Sentencing Guidelines for Organizations: A. holds organizations liable only for fraudulent activities in foreign markets. B. holds businesses liable for the criminal acts of their employees and agents. C. decreases the cost of unethical behavior. D. covers very few business crimes.

Q: (p. 118) In what way do bribes differ from grease payments under the FCPA? A. Unlike grease payments, bribes induce officials to act in violation of their lawful duty. B. Unlike grease payments, bribes include donations to bona fide charitable organizations. C. Unlike grease payments, bribes are meant to secure a routine governmental action. D. Unlike grease payments, bribes are used to facilitate processes approved of by law.

Q: (p. 118) Payments to foreign officials in order to expedite or secure the performance of a routine governmental action are known as _____. A. grease payments B. induced payments C. insulated payments D. allurements

Q: (p. 118) Bribes are those payments which: A. secure the performance of a routine governmental action. B. induce officials to act in violation of their lawful duty. C. expedite the processing of a routine governmental document. D. secure the lawful services of a foreign official.

Q: (p. 118) Payments made with the knowledge that any portion of the payment is to be passed along to a foreign official for a prohibited purpose under the Foreign Corrupt Practices Act are known as _____. A. grease payments B. facilitation payments C. bribes D. black funds

Q: (p. 117) Which of the following is true of the penalties under the Foreign Corrupt Practices Act? A. The Department of Justice can enforce criminal penalties of up to $20 million per violation for corporations and other business entities. B. The Securities and Exchange Commission can impose a civil fine of up to $2,000 per violation upon corporations and other business entities. C. Penalties under the books and record-keeping provisions can reach up to $25 million and 5 years' imprisonment for individuals and up to $50 million for organizations. D. Officers, directors, stockholders, employees, and agents are subject to a fine of up to $250,000 per violation and imprisonment for up to five years.

Q: (p. 117) Which of the following is true of the Foreign Corrupt Practices Act? A. It does not distinguish between bribery and facilitation payment. B. It does not permit the expediting of routine governmental action. C. It is considered violated even if a bribe was unsuccessful. D. It is applicable to all schemes unless they occur over wire communications.

Q: (p. 116) Which of the following is a routine governmental action? A. Allocating funds for companies to make facilitation payments overseas. B. Providing legal immunity for the employees of foreign companies. C. Providing police protection for the transit of goods across a country. D. Accepting payment from a foreign company in return for an exclusive contract.

Q: (p. 116) Which of the following is true of facilitation payments under the Foreign Corrupt Practices Act (FCPA)? A. The FCPA does not recognize them formally or differentiate between them and bribes. B. The FCPA permits them if they secure exclusive contracts from foreign officials. C. The FCPA finds them acceptable if they expedite a routine governmental action. D. The FCPA finds them acceptable if they involve securing new businesses overseas.

Q: (p. 116) Brendon Inc. required a permit to open its business in the country of Cadmia. Although it had met all the requirements for the permit, the officials concerned delayed providing Brendon Inc. with the permit. To expedite the process, the company made a payment to a customs official. Which of the following types of payments is this an example of? A. Accentuation payment B. Facilitation payment C. Flood payment D. Insulation payment

Q: (p. 116) Payments that are acceptable (legal) provided they expedite or secure the performance of a routine governmental action are called _____. A. facilitation payments B. accentuation payments C. flood payments D. insulation payments

Q: (p. 116) Why was the Foreign Corrupt Practices Act criticized? A. The act does not require full disclosure of funds that were taken out of or brought into the United States. B. The act does not address the illegality of using the U.S. mail or wire communications to transact a fraudulent scheme. C. The act requires corporations to fully disclose all transactions conducted with foreign officials in line with the SEC provisions. D. The act formally recognizes the facilitation payments, which would otherwise be acknowledged as bribes.

Q: (p. 116) _____ is the area of the Foreign Corrupt Practices Act that requires corporations to fully reveal any and all transactions conducted with foreign officials and politicians, in line with the Securities and Exchange Commission provisions. A. Enclosure B. Disclosure C. Foreclosure D. Exposure

Q: (p. 116) Sebastian and Amy are arguing over secondary legislations that were in place prior to the passing of the Foreign Corrupt Practices Act (FCPA). Amy is of the opinion that the FCPA encompasses all secondary measures that were in use to prohibit corrupt practices. Sebastian disagrees with Amy on this point. Which of the following, if true, would strengthen Amy's argument? A. The FCPA requires only partial disclosure of funds that were taken out of or brought into the United States. B. The FCPA does not specify that using wire communications to transact fraudulent schemes is illegal. C. The FCPA requires corporations to fully disclose all transactions conducted with foreign officials in line with the SEC provisions. D. The FCPA does not fine companies for failing to disclose payments made to foreign officials under its securities rules.

Q: (p. 116) The Foreign Corrupt Practices Act: A. is jointly enforced by the Federal Bureau of Investigation and the Ministry of Internal Affairs. B. encompasses all the measures that were previously in use to curb unethical overseas transactions. C. replaced the Dodd-Frank Wall Street Reform and Consumer Protection Act. D. ignores stipulations laid down by the Bank Secrecy Act and the Mail Fraud Act.

Q: (p. 116) Prior to the passing of the Foreign Corrupt Practices Act, unethical corporate behavior was regulated by the _____, which required full disclosure of funds that were taken out of or brought into the United States. A. Dodd-Frank Wall Street Reform and Consumer Protection Act B. Consumer Protection Act C. Bank Secrecy Act D. Securities and Exchange Commission

Q: (p. 116) Which of the following regulated unethical corporate behavior prior to the passing of the Foreign Corrupt Practices Act? A. The Securities and Exchange Commission B. The Dodd-Frank Wall Street Reform and Consumer Protection Act C. The U.S. Federal Sentencing Guidelines for Organizations D. The Ethics Resource Center

Q: (p. 116) The _____ refers to legislation introduced to control bribery and other less obvious forms of payment to overseas officials and politicians by American publicly traded companies. A. Comstock Act B. Rehabilitation Act C. Equal Opportunity Act D. Foreign Corrupt Practices Act

Q: (p. 116) Which of the following did the government formulate to penalize corporate wrongdoing? A. The Comstock Act B. The Sarbanes-Oxley Act C. The National Emergencies Act D. The Rehabilitation Act

Q: (p. 116) Which of the following is one of the key pieces of U.S. legislation designed to discourage, if not prevent, illegal conduct within businesses? A. The U.S. Federal Sentencing Guidelines for Organizations B. The Pendleton Civil Service Reform Act C. The District of Columbia Retrocession D. The National Emergencies Act

Q: (p. 127) The original Volcker Rule sought to allow trading of all derivatives without discrimination.

Q: (p. 127) The Volcker Rule proposed that there should be a key restriction in the legislation to limit the ability of banks to trade on their own accounts.

Q: (p. 127) The Financial Stability Oversight Council is led by the Treasury secretary and is made up of top financial regulators.

Q: (p. 127) The Financial Stability Oversight Council is not authorized to act against a bank that poses a threat to the financial stability of the United States if its assets exceed $50 billion.

Q: (p. 127) The authority of the Consumer Financial Protection Bureau does not extend to examining and enforcing regulations for banks and credit unions if their assets exceed $10 billion.

Q: (p. 127) The Consumer Financial Protection Bureau is a government agency within the Federal Reserve that oversees financial products and services.

Q: (p. 126) The Dodd-Frank Wall Street Reform and Consumer Protection Act Legislation was established to expand the foreign trade sector.

Q: (p. 125) In 2008, financial markets around the world suffered a severe crash as a consequence of aggressive lending to subprime borrowers in a deregulated environment.

Q: (p. 123) Title IX of the Sarbanes-Oxley Act requires CEOs and CFOs to certify their periodic reports and imposes penalties for certifying a misleading or fraudulent report.

Q: (p. 123) Title VIII of the Sarbanes-Oxley Act imposes fines on employees for lying to other employees regarding company benefits and pay.

Q: (p. 123) Title VI of the Sarbanes-Oxley Act provides additional funding and authority to the SEC to follow through on all the new responsibilities outlined in the act.

Q: (p. 122) Title III of the Sarbanes-Oxley Act requires senior auditors to rotate off an account every five years, and junior auditors every seven years.

Q: (p. 122) As an oversight board, the Public Company Accounting Oversight Board (PCAOB) was charged with maintaining compliance with established standards and enforcing rules and disciplinary procedures for those organizations that found themselves out of compliance.

Q: (p. 122) The creation of the Public Company Accounting Oversight Board (PCAOB) as an independent oversight body was an attempt to reestablish the perceived independence of auditing companies that faced serious questioning after several corporate scandals.

Q: (p. 122) The Sarbanes-Oxley Act is a legislative response to the corporate accounting scandals of the early 2000s that covers the financial management of businesses.

Q: (p. 121) The Revised Federal Sentencing Guidelines for Organizations required evidence of actively promoting ethical conduct rather than just complying with legal obligations.

Q: (p. 121) The concept of an ethical culture was recognized, for the first time, as a foundational component of an effective compliance program under the Revised Federal Sentencing Guidelines for Organizations.

Q: (p. 120) According to the Federal Sentencing Guidelines for Organizations, criminal offenses, whether actual or suspected, must generate an appropriate response, analysis, and corrective action in order to establish an effective compliance program.

Q: (p. 120) In order to minimize an organization's culpability score, the Federal Sentencing Guidelines for Organizations prescribes that its employees be granted absolute discretionary authority.

Q: (p. 119) Under the Federal Sentencing Guidelines for Organizations, a judge has the discretion to impose the "death penalty" upon an organization, where the fine matches all the organization's assets.

Q: (p. 119) Under no circumstances can the culpability score be increased or decreased.

Q: (p. 119) The culpability score, according to the Federal Sentencing Guidelines for Organizations, is the calculation of the organization's degree of blame or guilt and is a multiplier of the base fine up to 40 times.

Q: (p. 119) The base fine of an organization sentenced under the Federal Sentencing Guidelines for Organizations is always calculated after its culpability score.