Deck 6: The Role of Government

Question 1

Processing government papers such as visas is a routine government action.

Answer 1

True

Question 2

In the Federal Sentencing Guidelines for Organizations,Chapter 8 of the guidelines exempts businesses from liability regarding the criminal acts of their employees and agents.

Answer 2

False

Question 3

The FCPA focusing on disclosure,which requires corporations to fully disclose any and all transactions conducted with foreign officials and politicians,in line with the SEC provisions,and prohibition,which includes wording from the Bank Secrecy Act and the Mail Fraud Act to prevent the movement of funds overseas for the express purpose of conducting a fraudulent scheme.

Answer 3

True

Question 4

the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Question 5

The Securities and Exchange Commission can imprison company executives for failing to disclose such payments under their securities rules.

Question 6

The key distinction in identifying bribes was the exclusion of any action taken by a foreign official in the decision to award new or continuing business.

Question 7

The Foreign Corrupt Practices Act (FCPA)placed more effective controls over the practice of bribing foreign officials and politicians by American publicly traded companies pursuing international growth.

Question 8

The Federal Sentencing Guidelines for Organizations does not require organizations to police themselves to prevent and detect the criminal activity of their employees and agents.

Question 9

Since the 1970s,there has been 45 key attempts at behavior modification to discourage,if not prevent,illegal conduct within organizations.

Question 10

Under the FCPA,payments lawful under foreign laws are legal.

Question 11

Facilitation payments,such as providing permits or licenses,are payments that are acceptable (legal),provided they expedite or secure the performance of a routine governmental action.

Question 12

By passing the FCPA,Congress sent a message that the competitiveness of US corporations in overseas markets should be based on price and product quality.

Question 13

Payments to foreign officials made in connection with the promotion or demonstration of company products or services is considered a bribe.

Question 14

The FCPA is an attempt to send a clear message that the competitiveness of U.S.corporations in overseas markets should be based on price and product quality rather than the extent to which companies pay off foreign officials and political leaders.

Question 15

Under the FCPA,facilitation payments would be acceptable,provided they expedited or secured the performance of a routine government action.

Question 16

Grease payments are illegal under the FCPA.

Question 17

The SBDC strictly enforces the FCPA.

Question 18

The FCPA encompasses all the secondary measures that were currently in use by focusing on two distinct areas,disclosure and prohibition

Question 19

The Foreign Corrupt Practices Act (FCPA)was introduced to more effectively control bribery and other less obvious forms of payment to foreign officials and politicians by American publicly traded companies as they pursued international growth.

Question 20

The SEC can enforce criminal penalties of up to $2 million per violation of the FCPA against corporate and business entities.

Question 21

In certain cases,a judge has the discretion to impose a "death penalty;" when this is warranted the organization was operating primarily for a criminal purpose.

Question 22

The three modifications to the guidelines to change corporate compliance programs are: requiring companies to periodically evaluate the effectiveness of their compliance programs,requiring evidence of actively promoting ethical conduct rather than just complying with legal obligations,and defining accountability more clearly.

Question 23

The culpability score of the FSGO is the calculation of the degree of blame or guilt used as a multiplier of up to four times the base fine.

Question 24

The sentence of an organization punished under the FSGO is determined through a three step process: determination of base fine,culpability score,and determination of the total fine amount.

Question 25

One of the factors that can increase a culpability score is that an organization willfully obstructed justice.

Question 26

Delegation of substantial discretionary authority is one step the FSGO prescribes to organizations in order to create an effective compliance program that minimizes its culpability score.

Question 27

The first step of an effective compliance program,as prescribed by the FSGO,is management oversight.

Question 28

The FSGO has prescribed ten steps for an effective compliance program.

Question 29

The second step of calculating a sentence under the FSGO is the determination of the base fine.

Question 30

The Sarbanes-Oxley Act contains four sections,or title,and almost 30 subsections covering every aspect of the financial management of businesses.

Question 31

One of the factors that can increase a culpability score is an organization's effective program to prevent and detect violations of law.

Question 32

Title III of the Sarbanes-Oxley Act (SOX)requires senior auditors to rotate off an account every five years.

Question 33

The Sarbanes-Oxley Act helps an organization create an ethical corporate culture.

Question 34

The Comprehensive Crime Control Act established the U.S.Federal Sentencing Commission in 1984 by and charged it with developing uniform sentencing guidelines for offenders convicted of federal crimes.

Question 35

In certain cases,a judge has the discretion to impose a "death penalty," where the fine is set high enough to match all the organization's assets.

Question 36

The base fine will normally be the greatest of: the monetary gain to the organization from the offense,the monetary loss from the offense caused by the organization to the extent the loss was caused knowingly,intentionally,or recklessly,or the amount determined by a judge based upon an FSGO table.

Question 37

Title II of the Sarbanes-Oxley Act requires senior auditors to remain with an account for at least five years and junior auditors for seven years.

Question 38

The Sarbanes-Oxley Act is a legislative response to the corporate accounting scandals and covers the financial management of businesses.

Question 39

The Federal Sentencing Guidelines for Organizations (FSGO)establishes a definition of an organization that is so narrow as to prompt the assessment that "many business enterprises are exempt."

Question 40

The creation of the 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.

Question 41

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.

Question 42

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

Question 43

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.

Question 44

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

A)Prohibition
B)Disclosure
C)Exclusion
D)Prevention

Question 45

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

Question 46

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.

Question 47

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.

Question 48

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

Question 49

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.

A)U.S.Federal Sentencing Guidelines for Organizations
B)Ethics Resource Center
C)Sarbanes-Oxley Act
D)Foreign Corrupt Practices Act

Question 50

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.

Question 51

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

A)price; product quality
B)personnel; bribery
C)payments; uniqueness
D)uniqueness; government support

Question 52

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.

Question 53

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.

Question 54

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

A)The U.S.Federal Sentencing Guidelines for Organizations
B)The Ethics Resource Center
C)The Sarbanes-Oxley Act
D)The Foreign Corrupt Practices Act

Question 55

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

Question 56

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

A)primary
B)international
C)secondary
D)domestic

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

The _____ is a legislative response to the corporate accounting scandals and contains almost over 50 subsections covering every aspect of the financial management of businesses.

A)Sarbanes-Oxley Act
B)U.S.Federal Sentencing Guidelines for Organizations
C)Ethics Resource Center
D)Foreign Corrupt Practices Act

Question 62

Any regular administrative process or procedure,excluding any action taken by a foreign official in the decision to award new or continuing business,refers to _______.

A)routine executive procedures
B)routine administrative action
C)routine governmental action
D)practical managerial procedures

Question 63

The formula used to calculate the total fine sentenced by the 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

Question 64

The maximum penalty that a judge can administer for FSGO violations is ______.

A)a $2 million penalty
B)a penalty that is worth a quarter of the organization's assets
C)a penalty that is worth half of the organization's assets
D)a penalty that is worth the full amount of the organization's assets

Question 65

Payments that are acceptable (legal)provided they expedite or secure the performance of a routine governmental action refer to _______.

A)facilitation payments
B)prohibition payments
C)disclosure payments
D)governmental payments

Question 66

All of the following are aggravating factors of the culpability score,except:

A)the organization willfully obstructed justice
B)the organization had an effective program to prevent and detect violations of law
C)the current offense violated a judicial order,injunction,or condition of probation
D)high-level personnel were involved in or tolerated the criminal activity

Question 67

The culpability score of an organization is _____.

A)the percentage of companies in an industry that act unethically
B)the calculation of a base fine
C)the calculation of a degree of blame or guilt
D)percentage of high-level personnel involved in the criminal activity

Question 68

The SEC may bring civil fines of up to ______ per violation under the FCPA.

A)$100,000
B)$50,000
C)$25,000
D)$10,000

Question 69

Which of the following is NOT a step in calculating a fine sentenced by the FSGO?

A)The culpability score
B)The total fine amount
C)The determination of the base fine
D)The determination of the mitigating factors

Question 70

An effective compliance program includes all of the following,except:

A)Management oversight
B)Consistent discipline
C)Coercive action
D)Compliance with standards and procedures

Question 71

The FSGO established a definition of an organization that was so ______ as to prompt the assessment that "no enterprise is exempt."

A)narrow
B)broad
C)well-defined
D)contracted

Question 72

____ 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.

A)grease payment
B)lawful payment under foreign laws
C)bribe
D)recordkeeping provision

Question 73

______ was hailed as one of the most important pieces of legislation governing the behavior of accounting firms and financial markets since the SEC legislation of the 1930s.

A)The U.S.Federal Sentencing Guidelines for Organizations
B)The Ethics Resource Center
C)The Sarbanes-Oxley Act
D)The Foreign Corrupt Act

Question 74

Which of the following is NOT a routine government action?

A)Providing permits qualifying a person to do business in a foreign country
B)Processing governmental papers
C)Providing police protection relate to the transit of goods across a country
D)Influencing a government official to obtain a government or business contract

Question 75

The Federal Sentencing Guidelines for Organizations requires organizations to ______.

A)report any grease payments of their employees and agents
B)police other companies to help prevent and detect criminal activity
C)report grease payments that they witness in other companies
D)police themselves to prevent and detect the criminal activity of their employees

Question 76

Facilitating payments to foreign officials in order to expedite or secure the performance of a routine governmental action is known as a ______.

A)grease payment
B)lawful payment under foreign laws
C)bribe
D)recordkeeping provision

Question 77

Penalties under the books and record-keeping provisions of the FCPA can reach up to _______ for an individual and up to _______ for organizations.

A)$25 million; $75 million
B)$5 million and 20 years imprisonment; $25 million
C)$5 million and 10 years imprisonment; $50 million
D)$10 million and 10 years imprisonment; $50 million

Question 78

The key distinction in identify a bribe was ______.

A)whether the payment to foreign officials is to expedite or secure the performance of a routine governmental action
B)the exclusion of any action taken by a foreign official in the decision to award new or continuing business
C)if it is a grease payment
D)if to obtain a permit,license,or other official documents with foreign officials

Question 79

Under ____,the FCPA incorporates the wording of the Bank Secrecy Act and the Mail Fraud Act,to prohibit the movement of funds overseas for the express purpose of conducting a fraudulent scheme.

A)Disclosure
B)Exclusion
C)Facilitation
D)Prohibition

Question 80

The ______ is a fine that is set high enough to match all the organization's assets and basically put the organization out of business.

A)prohibition payment
B)recordkeeping provision
C)disclosure payment
D)death penalty