CFS Corporate Governance & Whistleblower Programs Flashcards
6 cards from real CFS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFS Corporate Governance & Whistleblower Programs flashcards as text
The COSO framework's control environment component most directly supports fraud prevention by:
Answer: Establishing the ethical foundation and governance structures of the organization
The control environment is the foundation of COSO's internal control framework, encompassing integrity, ethical values, and governance structures that set the tone for fraud prevention.
Which governance practice helps prevent a single individual from committing and concealing fraud?
Answer: Job rotation and mandatory vacations
Job rotation and mandatory vacations force other employees to perform a fraudster's duties, often exposing concealed schemes that depend on one person having uninterrupted access.
Enterprise Risk Management (ERM) frameworks help organizations address fraud risk by:
Answer: Identifying, assessing, and responding to fraud risks at an organizational level
ERM frameworks provide a structured approach to identifying and mitigating fraud risks across the organization, integrating fraud risk management into the broader risk strategy.
Which board governance failure was a primary contributing factor in major corporate scandals such as Enron?
Answer: Lack of board oversight and failure to challenge management
In Enron and similar scandals, boards failed to exercise adequate oversight and ask tough questions of management, allowing fraudulent schemes to persist for years.
A clawback policy in executive compensation is designed to:
Answer: Recover compensation paid based on restated or fraudulent financial results
Clawback policies allow companies to recover previously paid compensation when it was based on financial results that are later found to have been misstated or fraudulently reported.
Which practice best demonstrates a strong anti-fraud culture within an organization?
Answer: Consistently applying disciplinary consequences for all levels of fraud, including executives
Consistent and transparent enforcement of consequences for fraud at all organizational levels, including senior management, demonstrates that no one is above the code of conduct.