CCS Regulatory Compliance & Risk Management 2

Question 1

Under the Sarbanes-Oxley Act (SOX), which section requires management to assess the effectiveness of internal controls over financial reporting?

Accepted Answer

Section 404

Answer

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

Question 2

Which risk management framework published by COSO identifies five interrelated components including the control environment and risk assessment?

Accepted Answer

COSO ERM Framework

Answer

The COSO Internal Control – Integrated Framework identifies five components: control environment, risk assessment, control activities, information & communication, and monitoring.

Question 3

A compliance officer discovers that a business unit has been underreporting customer complaints to regulators for 18 months. The FIRST action should be to:

Accepted Answer

Conduct an internal investigation to determine scope before notifying regulators

Answer

The first step is conducting an internal investigation to understand the full scope before determining the appropriate regulatory disclosure strategy.

Question 4

Which principle of risk management states that risks should be transferred, avoided, mitigated, or accepted based on the organization's risk appetite?

Accepted Answer

The four T's of risk response

Answer

The four T's of risk response — Transfer, Terminate (avoid), Treat (mitigate), and Tolerate (accept) — guide how organizations respond to identified risks.

Question 5

The Bank Secrecy Act (BSA) requires financial institutions to file a Currency Transaction Report (CTR) for cash transactions exceeding:

Accepted Answer

$10,000

Answer

The BSA requires financial institutions to file a CTR for any cash transaction exceeding $10,000 in a single business day.

(CCS) Certified Compliance Specialist Practice Test

(CCS) Certified Compliance Specialist Practice Test

CCS Regulatory Compliance & Risk Management 2