CEA CEA Regulatory Compliance & Legal Ethics

Question 1

What is the primary distinction between legal compliance and ethical conduct in a US business context?

Accepted Answer

Ethical conduct sets a higher standard than the law and guides behavior in situations the law does not cover

Answer

Legal compliance always equals ethical behavior

Answer

Ethics only applies when laws are unclear

Answer

Legal compliance is voluntary; ethics is mandatory

Question 2

Under the Sarbanes-Oxley Act (SOX), which requirement directly supports ethical financial reporting?

Accepted Answer

CEO and CFO personal certification of the accuracy of financial statements

Answer

Mandatory diversity disclosures

Answer

Unlimited executive compensation

Answer

Exemption of small companies from audit requirements

Question 3

What does the Foreign Corrupt Practices Act (FCPA) primarily prohibit for US companies?

Accepted Answer

Paying bribes to foreign government officials to obtain or retain business

Answer

Hiring foreign nationals in leadership roles

Answer

Engaging in international trade without a license

Answer

Investing in foreign real estate

Question 4

In ethics terms, what is 'regulatory capture'?

Accepted Answer

The process by which regulated industries gain undue influence over the agencies meant to oversee them

Answer

A government agency successfully prosecuting a corporation

Answer

A whistleblower reporting industry misconduct to regulators

Answer

The adoption of international compliance standards

Question 5

Which US federal law requires financial institutions to maintain ethics-based programs to detect and prevent money laundering?

Accepted Answer

Bank Secrecy Act (BSA)

Answer

Dodd-Frank Act

Answer

Gramm-Leach-Bliley Act

Answer

Fair Credit Reporting Act

Question 6

How does the Dodd-Frank Act incentivize ethical whistleblowing in the financial sector?

Accepted Answer

By providing financial awards and anti-retaliation protections to individuals who report securities violations to the SEC

Answer

By requiring all employees to report misconduct annually

Answer

By mandating board ethics committees in all firms

Answer

By criminalizing silence about known violations