CFA Corruption & Bribery Schemes Flashcards

Which investigative technique is MOST effective for identifying undisclosed vendor relationships that indicate a conflict of interest?

Answer: Cross-referencing vendor registration records with employee personal information (addresses, SSNs, names)

Matching vendor registration data (addresses, ownership, phone numbers) against employee records can reveal hidden connections between employees and vendors they approve.

Under the FCPA's accounting provisions, companies must maintain books and records that:

Answer: Accurately and fairly reflect company transactions and are supported by adequate internal controls

The FCPA's books-and-records provision requires that transactions be recorded accurately so that corrupt payments cannot be disguised as legitimate business expenses.

A 'grease payment' or 'facilitation payment' under the FCPA refers to:

Answer: Small payments to low-level government officials to expedite routine administrative actions

The FCPA includes a narrow exception for small facilitating payments made to expedite routine, non-discretionary government actions, though this exception does not exist under the UK Bribery Act.

When a fraud examiner suspects corruption in a government contracting environment, which document review is MOST revealing?

Answer: Bid solicitation files, evaluation scorecards, and award documentation

Bid solicitation files and evaluation documentation show whether the selection process was followed correctly and whether scoring was manipulated to favor a corrupt vendor.

An intermediary or agent who pays a bribe on behalf of a company to a foreign official may trigger FCPA liability for the company if the company:

Answer: Knew or consciously disregarded that the agent was likely to make corrupt payments

The FCPA's 'conscious disregard' or 'willful blindness' standard means that ignoring red flags of an agent's corrupt conduct can create liability for the principal company.

Which element is NOT required to prove commercial bribery under most U.S. state statutes?

Answer: Proof that the bribe actually succeeded in changing the outcome

Commercial bribery statutes generally require only that a corrupt payment was made with intent to influence, not that it actually succeeded in influencing the outcome.