CFA CFA Corruption & Bribery Schemes 1

Question 1

Under the Foreign Corrupt Practices Act (FCPA), it is illegal for U.S. companies to bribe:

Accepted Answer

Foreign government officials to obtain or retain business

Answer

Private sector competitors

Answer

Domestic government employees for any reason

Answer

Foreign private sector employees in most circumstances

Question 2

A kickback scheme differs from a bribery scheme primarily in that kickbacks:

Accepted Answer

Involve a payment made in return for a benefit already received, often by a vendor to a purchasing employee

Answer

Are always initiated by the payer

Answer

Are legal in certain commercial contexts

Answer

Require a written agreement between parties

Question 3

Which of the following is a PRIMARY red flag indicating a potential bribery scheme in procurement?

Accepted Answer

A vendor winning multiple large contracts despite submitting higher bids than competitors

Answer

A vendor consistently delivering goods on time

Answer

A purchasing manager taking vacations during contract periods

Answer

Vendor invoices that match purchase order amounts exactly

Question 4

The UK Bribery Act 2010 is considered stricter than the FCPA primarily because it:

Accepted Answer

Covers commercial (private-to-private) bribery and imposes corporate liability for failure to prevent bribery

Answer

Only applies to public sector employees

Answer

Requires a minimum bribe amount to trigger prosecution

Answer

Applies only to UK nationals abroad

Question 5

An employee who accepts lavish gifts, meals, and entertainment from a vendor seeking a contract renewal may be engaging in:

Accepted Answer

A conflict of interest that could constitute corruption

Answer

Legitimate relationship management within industry norms

Answer

A violation only if the gifts exceed $500 in value

Answer

A regulatory issue requiring SEC disclosure

Question 6

What is 'bid rigging' in a corruption context?

Accepted Answer

Colluding with competitors to predetermine the winner of a competitive bidding process

Answer

Submitting multiple bids under different company names

Answer

Inflating bid estimates to create budget surplus

Answer

Accepting bribes to disqualify a competing vendor