Practice Test Geeks(CME) Certified Management Executive Practice Test
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Professional Ethics & Governance Flashcards

7 cards from real CME practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Professional Ethics & Governance flashcards as text

  1. A manager receives a gift valued at $250 from a vendor currently under contract review. The company policy prohibits gifts over $50. The manager should:

    Answer: Return the gift and report the incident to compliance as required by policy

    Company policy must be followed; the gift must be returned and reported through the proper compliance channel regardless of intent.

  2. The Sarbanes-Oxley Act (SOX) Section 302 requires which of the following?

    Answer: CEOs and CFOs to personally certify the accuracy of financial reports

    SOX Section 302 mandates that principal executive and financial officers personally certify the accuracy of their company's periodic financial reports.

  3. An employee reports suspected fraud internally but is then demoted. This action by the employer most likely violates:

    Answer: Whistleblower protection provisions of Dodd-Frank or SOX

    Retaliation against employees who report suspected fraud is prohibited by whistleblower protection laws including SOX and Dodd-Frank.

  4. In the context of board governance, 'independent director' means a director who:

    Answer: Has no material relationship with the company that could compromise judgment

    An independent director is free from any financial or personal ties to the company that could bias their oversight role.

  5. Which ethical framework judges the rightness of an action based solely on its outcomes and overall welfare produced?

    Answer: Consequentialism (Utilitarianism)

    Consequentialism evaluates actions by their results — the action producing the greatest good for the greatest number is morally correct.

  6. A CEO instructs staff to backdate stock option grants to increase their value. This practice is PRIMARILY a violation of:

    Answer: Securities fraud and accurate record-keeping requirements

    Backdating stock options to a lower-price date falsifies financial records and constitutes securities fraud.

  7. Environmental, Social, and Governance (ESG) reporting is BEST described as:

    Answer: Voluntary or regulated disclosure of non-financial factors affecting long-term organizational value

    ESG reporting discloses environmental, social, and governance performance data that investors and stakeholders use to assess long-term risk and value.