CFA CFA Corruption & Bribery Schemes

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

The FCPA prohibits U.S. persons and companies from paying, offering, or authorizing payments to foreign government officials to obtain or retain business advantages.

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

Kickbacks are secret payments made by a vendor to an employee in exchange for directing business to that vendor, creating a corrupt quid pro quo.

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 winning contracts despite higher pricing suggests that non-price factors — potentially corrupt payments — are influencing the award decisions.

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

The UK Bribery Act covers both public and private sector bribery and creates a strict corporate liability offense for failing to prevent bribery by associated persons.

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

Accepting gifts, meals, or entertainment of significant value from vendors can constitute a corrupt conflict of interest, especially when contract decisions are pending.

CFA Practice Test

CFA Practice Test

CFA CFA Corruption & Bribery Schemes