Certified Public Accountant Regulatory Frameworks & Compliance 5

Question 1

Under the AML/BSA framework, a Suspicious Activity Report (SAR) must be filed within how many days of detecting a suspicious transaction?

Accepted Answer

30 calendar days

Answer

Financial institutions must file a SAR within 30 calendar days of the date they initially detect facts that may constitute a basis for filing.

Question 2

Under the Sarbanes-Oxley Act Section 301, audit committees of public companies must be directly responsible for which of the following?

Accepted Answer

Appointing, compensating, and overseeing the external auditor

Answer

SOX Section 301 requires audit committees to be directly responsible for the appointment, compensation, and oversight of the external auditor.

Question 3

Which of the following best describes the purpose of Regulation FD (Fair Disclosure) issued by the SEC?

Accepted Answer

Prohibiting selective disclosure of material nonpublic information to certain investors

Answer

Regulation FD prohibits companies from selectively disclosing material nonpublic information to institutional investors or analysts without simultaneously disclosing it publicly.

Question 4

A CPA serving as a tax advisor identifies a 'listed transaction' that their client has participated in. Under Circular 230, what must the CPA disclose?

Accepted Answer

The transaction to the IRS Office of Tax Shelter Analysis (OTSA)

Answer

Circular 230 requires material advisors who organize or sell listed transactions to file disclosure statements with the IRS Office of Tax Shelter Analysis.

Question 5

Under the Federal Sentencing Guidelines, which factor is most significant in reducing organizational culpability scores for compliance program effectiveness?

Accepted Answer

Having an effective ethics and compliance program in place before the offense

Answer

Under the Federal Sentencing Guidelines, having an effective compliance and ethics program before the offense can significantly reduce an organization's culpability score and fines.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Regulatory Frameworks & Compliance 5