CFS CFS Corporate Governance & Whistleblower Programs 2

Question 1

Under the Dodd-Frank Act, the SEC Whistleblower Program awards qualifying whistleblowers what percentage of sanctions collected?

Accepted Answer

10–30%

Answer

The SEC Whistleblower Program awards qualifying individuals between 10% and 30% of monetary sanctions exceeding $1 million collected in enforcement actions.

Question 2

Which SOX section protects employees of publicly traded companies who report fraud from retaliation?

Accepted Answer

Section 806

Answer

SOX Section 806 prohibits publicly traded companies from retaliating against employees who provide information about potential securities fraud to regulators or supervisors.

Question 3

An anonymous hotline is most effective as a fraud detection tool because:

Accepted Answer

Employees are more likely to report suspicions when protected from retaliation

Answer

Anonymous hotlines reduce the fear of retaliation, making employees significantly more willing to report observed fraud or misconduct, which is the most common fraud detection method.

Question 4

Which element is essential for a whistleblower program to be effective?

Accepted Answer

Guaranteed confidentiality and non-retaliation protections

Answer

Effective whistleblower programs must guarantee confidentiality and clearly communicate non-retaliation policies to encourage good-faith reporting without fear of consequences.

Question 5

Which internal governance body typically has direct oversight of a company's internal audit function?

Accepted Answer

The audit committee of the board

Answer

The audit committee of the board oversees the internal audit function to ensure its independence from management and alignment with governance and risk objectives.

(CFS) Certified Fraud Specialist Practice Test

(CFS) Certified Fraud Specialist Practice Test

CFS CFS Corporate Governance & Whistleblower Programs 2