Whistleblower Protection & Reporting Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Whistleblower Protection & Reporting flashcards as text
Under the Sarbanes-Oxley Act (SOX), which employees are protected when reporting suspected securities fraud?
Answer: Employees of publicly traded companies who report to supervisors, regulators, or Congress
SOX Section 806 protects employees of publicly traded companies who report fraud to supervisors, federal agencies, or members of Congress.
What does 'reasonable belief' mean in the context of whistleblower protection?
Answer: The whistleblower must subjectively and objectively believe misconduct occurred
Reasonable belief requires both a subjective (genuine) belief and an objective (reasonable person) standard that a violation occurred.
Which federal law specifically protects employees who report violations of federal tax laws to the IRS?
Answer: IRS Whistleblower Program under IRC Section 7623
IRC Section 7623 established the IRS Whistleblower Program, which provides financial awards and anti-retaliation protections for tax fraud reporters.
A whistleblower reports internally but the company takes no action. What is the BEST next step?
Answer: Consider escalating to an external regulatory authority
When internal reporting fails to address misconduct, escalating to an appropriate external regulator is a legitimate and often protected next step.
Under Dodd-Frank, what financial incentive is offered to whistleblowers whose tips lead to successful SEC enforcement actions exceeding $1 million in sanctions?
Answer: 10–30% of collected monetary sanctions
Dodd-Frank entitles qualifying whistleblowers to 10–30% of monetary sanctions collected in SEC enforcement actions exceeding $1 million.
Which action by an employer would most clearly constitute whistleblower retaliation?
Answer: Demoting the whistleblower one week after they filed a compliance complaint
A demotion shortly after a protected disclosure strongly indicates retaliatory motive due to the close temporal proximity.
What is a 'cooling off' period in the context of internal ethics hotlines?
Answer: The time an organization has to investigate before the whistleblower can escalate
Some frameworks define a cooling off period as the time an organization is given to investigate internally before a reporter may escalate to external authorities.