CCT Ethics & Corporate Governance 2

Question 1

A compliance officer discovers that the CEO approved a transaction that personally benefited the CEO's spouse. Which governance concept is most directly implicated?

Accepted Answer

Duty of loyalty conflict of interest

Answer

A duty of loyalty conflict of interest arises when a director or officer acts in a way that benefits themselves or related parties rather than the corporation.

Question 2

Under the Foreign Corrupt Practices Act (FCPA), which of the following is NOT considered a 'foreign official'?

Accepted Answer

A private company employee with no government ties

Answer

The FCPA defines foreign officials as government employees, state-owned enterprise officers, and political party officials, but not employees of purely private companies.

Question 3

Which governance structure element is primarily responsible for overseeing the independence of the external auditor?

Accepted Answer

Audit committee

Answer

The audit committee is charged with selecting, overseeing, and ensuring the independence of the external auditor under SEC rules and listing standards.

Question 4

A company's code of ethics requires employees to report suspected fraud. An employee who remains silent to protect a colleague is most likely violating which principle?

Accepted Answer

Duty to report

Answer

Codes of ethics typically impose a mandatory duty to report suspected misconduct, and silence in the face of known fraud violates that obligation.

Question 5

The 'three lines of defense' model assigns internal audit to which line?

Accepted Answer

Third line

Answer

Internal audit serves as the third line of defense by providing independent assurance over the effectiveness of the first and second lines.

(CCT) Certified Compliance Technician Practice Test

(CCT) Certified Compliance Technician Practice Test

CCT Ethics & Corporate Governance 2