CME Professional Ethics & Governance 3

Question 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:

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

CEOs and CFOs to personally certify the accuracy of financial reports

Answer

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

Question 3

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

Accepted Answer

Whistleblower protection provisions of Dodd-Frank or SOX

Answer

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

Question 4

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

Accepted Answer

Has no material relationship with the company that could compromise judgment

Answer

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

Question 5

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

Accepted Answer

Consequentialism (Utilitarianism)

Answer

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

(CME) Certified Management Executive Practice Test

(CME) Certified Management Executive Practice Test

CME Professional Ethics & Governance 3