CFA Corruption & Bribery Schemes Flashcards
6 cards from real CFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFA Corruption & Bribery Schemes flashcards as text
Which type of corruption scheme involves a company official awarding contracts to a vendor in exchange for a share of that vendor's profits, disguised as a 'consulting arrangement'?
Answer: Kickback through a sham consulting agreement
Sham consulting agreements are a common method to launder kickback payments, giving the corrupt payment a false veneer of legitimacy.
The ACFE defines corruption as occurring when an employee:
Answer: Uses their influence in a business transaction to violate their duty to their employer for direct or indirect personal gain
Corruption involves an employee misusing their positional influence in business transactions to gain personal benefit, breaching the duty owed to their employer.
A proactive anti-corruption compliance program should include all of the following EXCEPT:
Answer: Restricting all overseas business travel by employees
Restricting overseas travel is not a recognized element of anti-corruption compliance and would be impractical; legitimate programs focus on oversight, due diligence, and reporting mechanisms.
When investigating a potential corruption scheme involving a foreign subsidiary, a fraud examiner should FIRST:
Answer: Consult legal counsel to determine applicable law and attorney-client privilege strategy
Engaging legal counsel early in cross-border investigations preserves privilege, ensures compliance with local laws, and protects the integrity of the investigation.
Which of the following BEST describes 'extortion' in the context of the FCPA and anti-corruption frameworks?
Answer: A government official demanding a payment, where the payer faces harm without complying
Extortion differs from bribery in that the payment is made under duress — a government official threatens harm unless the payer complies, and is treated differently under anti-corruption frameworks.
Under the Dodd-Frank Act, a whistleblower who reports FCPA violations to the SEC may be eligible for:
Answer: A monetary award of 10–30% of sanctions collected if the tip leads to a successful enforcement action exceeding $1 million
The SEC Whistleblower Program under Dodd-Frank awards 10–30% of monetary sanctions collected in successful enforcement actions that exceed $1 million to qualifying original information providers.