Question 1

The responsibilities granted to the CFPB that has been written in the legislation are extensive and include authority to examine and enforce regulations for banks and credit unions with assets over $10 billion.

Accepted Answer

This statement is true. The Consumer Financial Protection Bureau (CFPB) has the authority to examine and enforce regulations for banks and credit unions with assets over $10 billion, as granted by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Question 2

Title II of SOX prohibits specific "nonaudit" services by public accounting firms that violate auditor independence.

Accepted Answer

The answer of Title II of SOX prohibits specific "nonaudit"...

Question 3

It is estimated that Section 404 of SOX has generated auditing fees in the hundreds of millions of dollars,all in the hope of enforcing ethical conduct in U.S.organizations.

Accepted Answer

Section 404 of SOX requires companies to have an auditor review their internal controls over financial reporting, which has led to increased auditing fees. The exact amount is difficult to estimate, but it is believed to be in the hundreds of millions of dollars. The overall goal of SOX is to improve ethical conduct and financial reporting in U.S. organizations.

Question 4

Under ________,the FCPA requires corporations to fully disclose any and all transactions conducted with foreign officials and politicians,in line with the SEC provisions.

Accepted Answer

The FCPA requires corporations to fully disclose any and all transactions conducted with foreign officials and politicians in line with SEC provisions under the disclosure provision. The other options are not directly related to FCPA requirements.

Question 5

The Dodd-Frank Wall Street Reform and Consumer Protection Act Legislation was established to look at possible mismanagement in the financial sector.

Accepted Answer

The answer of The Dodd-Frank Wall Street Reform and Consumer...

Question 6

Allowing a major corporation in the finance industry to fail can be justified on the basis of allowing some poorly run companies to fail to restore stability at a time of extreme global instability.

Accepted Answer

The answer of Allowing a major corporation in the finance...

Question 7

In 2008,financial markets around the world suffered a severe crash as the consequence of aggressive lending,even though as recently as a few months earlier,lenders reported record earnings based on questionable lending practices.

Accepted Answer

This statement is true. The financial crisis of 2008 was primarily caused by the subprime mortgage crisis, where lenders had given loans to borrowers who were unlikely to be able to pay back the loan. This led to the collapse of the housing market and eventually caused a global financial meltdown. Prior to the crash, lenders had indeed reported record earnings based on these questionable lending practices.

Question 8

Title IX of SOX requires CEOs and CFOs to certify their periodic reports and imposes penalties for certifying a misleading or fraudulent report.

Accepted Answer

Title IX of the Sarbanes-Oxley Act (SOX) mandates that CEOs and CFOs must certify the accuracy of financial reports and imposes penalties for false certifications.

Question 9

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.

Accepted Answer

The Foreign Corrupt Practices Act was introduced in 1977 to control and prevent American publicly traded companies from bribing foreign officials and politicians while pursuing international growth. This act placed more effective controls over such practices and lesser-known forms of payment. The U.S. Federal Sentencing Guidelines for Organizations, Ethics Resource Center, and Sarbanes-Oxley Act do not pertain to this issue.

Question 10

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,termed proprietary trading.

Accepted Answer

The Volcker Rule proposed a key restriction to limit proprietary trading by banks.

Question 11

By passing the FCPA,Congress sent a message that U.S.companies should compete solely on the basis on ______ and ______ in overseas markets.

Accepted Answer

The FCPA prohibits the payment of bribes to foreign officials in order to obtain or retain business. By passing this law, Congress aimed to promote fair competition in overseas markets based solely on price and product quality, rather than on bribes or corrupt practices. Thus, choice A (price and product quality) is the best answer.

Question 12

The U.S.government's plan to ensure that the words "too big to fail" would never be applied to Wall Street again was delivered in the form of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Accepted Answer

This statement is true. The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010 in response to the financial crisis of 2008, and aimed to increase regulation and oversight of financial institutions to prevent another crisis from occurring. One of its goals was to address the issue of "too big to fail" institutions that posed a risk to the financial system.

Question 13

Title III of SOX requires CEOs and CFOs to certify quarterly and annual reports to the SEC,including making representations about the effectiveness of their control systems.

Accepted Answer

Title III of SOX, also known as the "Corporate Responsibility" section, mandates that CEOs and CFOs must certify the accuracy and completeness of quarterly and annual reports filed with the SEC, including an assessment of the effectiveness of their company's internal control systems.

Question 14

Which of the following is NOT a key attempt at behavior modification to discourage illegal conduct with organizations since the 1970s?

Accepted Answer

The Ethics Resource Center is not a legislative or regulatory attempt but rather a nonprofit organization focused on promoting ethical practices. The other options are legislative measures aimed at modifying organizational behavior to prevent illegal conduct.

Question 15

Title III of SOX requires audit committees to be independent and undertake specified oversight responsibilities.

Accepted Answer

Title III of SOX, also known as the Public Company Accounting Oversight Board (PCAOB), requires audit committees to be independent and undertake specific oversight responsibilities in order to maintain the integrity of financial reporting and corporate governance. This includes selecting and overseeing the work of the company's external auditor, reviewing financial statements, establishing and monitoring internal controls, and receiving and responding to complaints regarding accounting or auditing matters.

Question 16

Prior to the passing of the Foreign Corrupt Practices Act (FCPA),illegal behavior was punishable only through the ______ sources of legislation.

Accepted Answer

The answer of Prior to the passing of the Foreign...

Question 17

Title IV requires companies to provide enhanced disclosures,including a report on the effectiveness of internal controls and procedures for financial reporting.

Accepted Answer

Title IV of the Sarbanes-Oxley Act requires companies to provide enhanced disclosures, including a report on the effectiveness of internal controls and procedures for financial reporting.

Question 18

The Consumer Financial Protection Bureau is a government agency within the Federal Reserve that oversees housing issues.

Accepted Answer

The Consumer Financial Protection Bureau is a government agency but it is not within the Federal Reserve. It was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 and its main focus is on consumer financial protection. It oversees issues such as credit cards, mortgages, and student loans. However, it does not specifically oversee housing issues.

Question 19

The Financial Stability Oversight Council was established to prevent corporations from failing and threatening the stability of the banking and housing industries.

Accepted Answer

The Financial Stability Oversight Council was established to identify and monitor risks to the financial stability of the United States, not specifically to prevent corporations from failing.

Question 20

Title VIII imposes fines on employees for lying to other employees regarding company benefits and pay.

Accepted Answer

Title VIII of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, religion, national origin, or sex. However, it does not impose fines on employees for lying to other employees about company benefits or pay.

Quiz 6: The Role of Government