Legal & Ethical Compliance Standards Flashcards

Under the Foreign Corrupt Practices Act (FCPA), which of the following payments to a foreign official is explicitly permitted?

Answer: Facilitating payments to expedite routine governmental actions

The FCPA contains a narrow exception for 'facilitating payments' made to expedite or secure the performance of routine, non-discretionary governmental actions.

A compliance officer discovers that a senior executive is falsifying expense reports for personal gain. The most appropriate initial action is to:

Answer: Report directly to the board's audit committee or independent directors

When misconduct involves senior management, the compliance officer should escalate to the board's audit committee or independent directors to ensure an independent investigation.

Which legal doctrine holds that a corporation can be held criminally liable for the acts of its employees committed within the scope of employment to benefit the company?

Answer: Respondeat superior

Respondeat superior ('let the master answer') is the doctrine under which an employer is liable for criminal acts of employees acting within the scope of their employment.

The Dodd-Frank Act's whistleblower program administered by the SEC awards whistleblowers who provide original information leading to enforcement actions resulting in sanctions exceeding:

Answer: $1 million

SEC whistleblowers are eligible for awards when their information leads to enforcement actions with sanctions exceeding $1 million.

Which of the following best describes the 'business judgment rule' in the context of corporate compliance?

Answer: Courts will defer to directors' decisions made in good faith and with due care

The business judgment rule protects directors from liability for decisions made in good faith, with due care, and in the honest belief they are acting in the company's best interest.

Under the Sarbanes-Oxley Act (SOX) Section 404, management must assess and report on the effectiveness of:

Answer: Internal control over financial reporting (ICFR)

SOX Section 404 requires management to assess and report on the effectiveness of internal controls over financial reporting, with external auditor attestation for large accelerated filers.

An employee reports a compliance concern through an anonymous hotline. Under best practice and applicable law, the organization should:

Answer: Investigate all credible anonymous reports and protect reporter identity

Best practice and laws like SOX require organizations to investigate all credible reports, including anonymous ones, while protecting the confidentiality of reporters.