Legal & Ethical Compliance Standards Flashcards

The U.S. Sentencing Guidelines for Organizations reduce a company's culpability score when it has an effective compliance program. Which factor does NOT directly reduce the culpability score?

Answer: Having a compliance program in place at the time of the offense if employees committed the crime to benefit themselves

Under the Guidelines, having a compliance program does not reduce culpability if high-level personnel participated in, condoned, or were willfully ignorant of the offense.

Which ethical framework evaluates the morality of an action based solely on the action's adherence to rules or duties, regardless of consequences?

Answer: Deontological ethics

Deontological ethics judges actions by their conformity to rules or duties, not by outcomes—Kant's categorical imperative is the canonical example.

Under HIPAA, a 'covered entity' that experiences a breach of unsecured protected health information affecting 500 or more individuals must notify the HHS Secretary and prominent media outlets within:

Answer: 60 days of discovery

HIPAA's Breach Notification Rule requires covered entities to notify HHS and prominent media within 60 days of discovering a breach affecting 500 or more residents of a state.

A compliance program element requires that employees at all levels, including executives, complete annual training. This requirement primarily addresses which of the U.S. Sentencing Guidelines' seven elements?

Answer: Effective communication and training

Annual training for all employees, including executives, directly addresses the 'effective communication of standards and procedures' element of the seven hallmarks of an effective compliance program.

The concept of 'tone at the top' in compliance refers primarily to:

Answer: Senior leadership's visible commitment to ethical conduct and compliance

Tone at the top refers to senior leadership's demonstrated commitment to ethical behavior, which shapes the organization's culture and employee conduct.

Which of the following is a key distinction between a compliance-based ethics program and a values-based ethics program?

Answer: Compliance-based programs emphasize rules and penalties; values-based programs focus on shared values and culture

Compliance-based programs use rules, monitoring, and penalties to deter misconduct, while values-based programs cultivate ethical culture through shared values and employee integrity.

Under the Bank Secrecy Act (BSA), financial institutions are required to file a Suspicious Activity Report (SAR) within how many calendar days of initial detection of suspicious activity?

Answer: 30 days

The BSA requires financial institutions to file a SAR within 30 calendar days of the date they initially detect facts that may constitute a basis for filing.