Question 1

In an organization with an update-to-date formal structure, who most likely manages compliance?

Accepted Answer

Today, many ethics and compliance departments are led by a chief ethics and compliance officer (CECO).

Question 2

In a traditional formal structure, corporate compliance would have been managed by a

Accepted Answer

Traditionally, the general counsel (GC) or chief legal officer (CLO) also managed compliance.

Question 3

Today, all of the following would be considered C-suite executives EXCEPT

Accepted Answer

C-suite refers to executive-level managers within a company, denoted by the term chief.

Question 4

Company A has a chief compliance officer who reports to the board of directors' audit committee. A department of six employees report directly to the chief ethics and compliance officer. In Company A, the chief ethics and compliance officer and the six-employee department assume general responsibility for monitoring and enforcing compliance. This demonstrates

Accepted Answer

Effective ethics and compliance departments have formal and informal structural elements. Formal elements are noted by reporting responsibilities.

Question 5

In the informal structure of compliance in an organization, who is responsible for compliance?

Accepted Answer

Effective ethics and compliance departments have formal and informal structural elements. In an informal structure, everyone is responsible for compliance.

Question 6

ABC Company traditionally has tasked its general counsel with managing compliance, but now is creating a compliance department headed by a chief ethics and compliance officer. What is the most likely reason for this change?

Accepted Answer

The head of the legal department traditionally managed compliance, but given the complexity and professionalism required to run a compliance program, organizations are forming compliance departments and naming chief ethics and compliance officers.

Question 7

Tasha was recently named the chief ethics and compliance officer for her organization. In her first meeting with the chief executive officer, Tasha expresses her concerns about reporting to the company's chief legal officer. What most likely concerns Tasha?

Accepted Answer

When ensuring the company complies with multiple regulations, the chief ethics and compliance officer and chief legal officer may end up at odds.

Question 8

Chief ethics and compliance officer Vance investigated allegations of tax fraud at his company and found facts to support them. Within days, the news media reports the story. Vance suggests that the chief executive officer admit these findings publicly and then describe the remedial and preventive steps the company is taking. He believes this will improve public opinion. Which of the following company employees is most likely to disagree?

Accepted Answer

When ensuring the company complies with multiple regulations, the chief ethics and compliance officer and chief legal officer may end up at odds.

Question 9

Which of the following accurately describes a leading practice for the placement and independence of a chief ethics and compliance officer (CECO)?

Accepted Answer

As a leading practice, the chief ethics and compliance officer should have explicit guarantees of being invited to high-level meetings where matters pertinent to compliance are discussed.

Question 10

The board of directors at Company B has promoted Whitney to chief ethics and compliance officer. She will lead its newly created compliance department. According to leading practices, to whom should Whitney report?

Accepted Answer

Best practices suggests that a chief ethics and compliance officer have a functional reporting line directly to the audit committee of the board of directors rather than to the chief executive officer or other management-level official.

Question 11

For various reasons, employees at all levels in Company Z have lost respect for and faith in chief ethics and compliance officer Xenon. According to leading practices, who can terminate Xenon's employment with Company Z?

Accepted Answer

Best practices suggests that a chief ethics and compliance officer have protections of tenure in office; therefore, most companies require that the CECO can only be fired by the audit committee or agreement from the full board of directors.

Question 12

Yvette tells you all about her new job as the chief ethics and compliance officer, which requires monitoring, training, and communicating with all levels of employees. You remind Yvette of another responsibility, which is to

Accepted Answer

The chief ethics and compliance officer and team must work to ensure compliance with a vast array of regulations, in addition to activities that include monitoring, training, and communicating with all levels of employees.

Question 13

What does the "informal structure" of corporate compliance mean?

Accepted Answer

The reality is that it truly takes the combined efforts of every employee to make a compliant and ethical corporation.

Question 14

By incorporating both a formal and informal element to its compliance program, a company

Accepted Answer

It takes everyone following formal rules and informal norms of conduct to create an ethical and compliant organization.

Question 15

The "informal structure" of an organization is most similar to

Accepted Answer

In an informal structure, employees who follow established norms of behavior help create an ethical and compliant organization.

Question 16

Company C has a policy stating that employees are forbidden from commenting about corporate matters to the press or on social media. On Twitter, employee Zack jokes with his friends about what his chief executive officer may or may not have known about a sexual harassment scandal at rival Company X. Zack's actions will most likely affect

Accepted Answer

One person's noncompliant actions can affect an entire industry of people.

Question 17

In its mission statement, Company K claims to value integrity and honesty. Yet while a few company employees openly brag about cheating on their expense reports, management has ignored the issue. What is the most likely result?

Accepted Answer

It only takes one employee's dishonorable actions to turn a company in a different direction.

Question 18

What is the most likely reason for an employee to challenge corporate policies and standards?

Accepted Answer

Part of the challenge in regulating behavior is that each individual employee has his or her own set of values. Yet, the company is asking that employees accept and live by the corporation's values.

Question 19

XYZ Company has created a compliance department and named a chief ethics and compliance officer to lead it. Based on your reading, which of the following will make XYZ's compliance program most effective?

Accepted Answer

An effective compliance program has two elements: a formal program and a culture that supports those efforts.

Question 20

Why are formal and informal structural elements important to compliance programs?

Accepted Answer

The answer of Why are formal and informal structural elements...

Quiz 5: Ethics and Compliance in the Corporation