CCA Ethics & Corporate Governance Flashcards

What is the purpose of the COSO Enterprise Risk Management (ERM) framework?

Answer: To provide a framework for organizations to align risk appetite with strategy, manage risk, and achieve objectives

COSO ERM provides a framework for integrating risk management into strategy-setting and performance management, helping organizations achieve objectives while managing uncertainty.

Which of the following is an example of an ethical dilemma a management accountant might face?

Answer: Being pressured by management to record revenue prematurely to meet quarterly earnings targets

Pressure to manipulate financial results creates an ethical dilemma between professional obligations (accuracy, integrity) and organizational pressure to meet targets.

Under the Foreign Corrupt Practices Act (FCPA), which two main provisions apply to US companies?

Answer: Anti-bribery provisions and accounting/recordkeeping provisions

The FCPA has anti-bribery provisions (prohibiting payments to foreign officials) and accounting provisions (requiring accurate books and adequate internal controls).

What is 'tone at the top' in the context of corporate ethics?

Answer: The ethical culture and values set by senior management and the board that influence behavior throughout the organization

Tone at the top refers to the ethical climate established by leaders; when senior management demonstrates integrity and ethical behavior, it permeates the entire organization.

Which action by a corporate accountant would violate the IMA's confidentiality standard?

Answer: Sharing non-public financial forecasts with a personal stock broker to trade on the information

Sharing confidential financial information for personal gain (insider trading) violates the IMA's confidentiality standard and securities laws.

What is the primary purpose of a corporate code of ethics?

Answer: To articulate the organization's values, standards, and expectations for ethical behavior by all employees

A corporate code of ethics defines behavioral expectations, guides decision-making in ambiguous situations, and communicates the organization's commitment to ethical conduct.