CCT Compliance Monitoring & Reporting 3

Question 1

A company's compliance dashboard shows 100% policy attestation completion but regulators still find widespread violations. What is the MOST likely explanation?

Accepted Answer

Employees completed attestations without reading or understanding the policies

Answer

High attestation rates can be misleading if employees sign off without genuinely understanding policies, a phenomenon known as 'checkbox compliance.'

Question 2

Which regulatory body requires broker-dealers to file Form BD and maintain specific books and records under SEC Rule 17a-3?

Accepted Answer

FINRA/SEC

Answer

The SEC and FINRA regulate broker-dealers, requiring them to maintain books and records under SEC Rule 17a-3 and file registration forms including Form BD.

Question 3

In compliance monitoring, what is a 'key risk indicator' (KRI)?

Accepted Answer

A forward-looking metric that signals increasing exposure to a specific risk

Answer

KRIs are forward-looking metrics that provide early warning signals when risk exposure is increasing, enabling proactive management.

Question 4

A compliance officer must escalate a potential FCPA violation discovered during monitoring. To whom should this be escalated FIRST according to best practice?

Accepted Answer

Legal counsel and senior management or the board

Answer

FCPA violations carry serious criminal and civil penalties, so they should be escalated immediately to legal counsel and senior management or the board for proper handling.

Question 5

What is the purpose of a 'testing calendar' in a compliance monitoring program?

Accepted Answer

To ensure all controls are tested at defined intervals across the year

Answer

A testing calendar schedules when each control will be tested, ensuring consistent coverage and preventing gaps where controls go untested for extended periods.

(CCT) Certified Compliance Technician Practice Test

(CCT) Certified Compliance Technician Practice Test

CCT Compliance Monitoring & Reporting 3