CCEP Third-Party Risk Management 1

Question 1

What is a fundamental component of an effective third-party risk management (TPRM) program?

Accepted Answer

Conducting thorough due diligence before engaging third parties

Answer

Conducting thorough pre-engagement due diligence is a foundational element of TPRM, enabling organizations to assess and mitigate risks before entering into business relationships.

Question 2

Under the Foreign Corrupt Practices Act (FCPA), which party can be held liable for bribes paid by a third-party agent to a foreign official?

Accepted Answer

The U.S. company that retained the agent, if it knew or had reason to know

Answer

Under the FCPA, a U.S. company can be held liable for bribes paid by third-party agents if the company knew or consciously disregarded that the bribe would occur.

Question 3

Which of the following is considered a 'red flag' during third-party due diligence?

Accepted Answer

The vendor requests unusually large upfront payments with no clear business justification

Answer

Unusually large upfront payments with no clear business rationale are a classic red flag suggesting potential bribery or corruption risk in third-party relationships.

Question 4

What is the primary purpose of ongoing monitoring of third-party relationships?

Accepted Answer

To ensure third parties continue to meet compliance standards throughout the relationship

Answer

Ongoing monitoring ensures third parties maintain compliance standards throughout the relationship, since risks can change significantly after the initial onboarding period.

Question 5

What should compliance clauses in third-party contracts typically require?

Accepted Answer

That the third party comply with applicable laws and the company's code of conduct

Answer

Compliance clauses should contractually obligate third parties to comply with applicable laws and the company's code of conduct, establishing clear and enforceable compliance requirements.

(CCEP) Certified Compliance and Ethics Professional Practice Test

(CCEP) Certified Compliance and Ethics Professional Practice Test

CCEP Third-Party Risk Management 1