Corporate Governance Regulatory Compliance & Disclosure 3

Question 1

What is the Foreign Corrupt Practices Act (FCPA)?

Accepted Answer

A US law prohibiting bribery of foreign government officials and requiring accurate books and records

Answer

The FCPA prohibits US persons and companies from bribing foreign officials to obtain or retain business, and requires companies to maintain accurate books and have adequate internal controls.

Question 2

What is the SEC's 'Howey Test' used to determine?

Accepted Answer

Whether an instrument qualifies as a security subject to SEC registration requirements

Answer

The Howey Test (from SEC v. W.J. Howey Co.) defines an investment contract as a security if there is an investment of money in a common enterprise with an expectation of profits from others' efforts.

Question 3

What is a 'whistleblower bounty' under the SEC's Dodd-Frank program?

Accepted Answer

A monetary award of 10-30% of sanctions over $1 million paid to whistleblowers who provide original information leading to successful SEC enforcement

Answer

Under Dodd-Frank, SEC whistleblowers who provide original information leading to sanctions exceeding $1 million can receive 10-30% of the total monetary sanctions collected.

Question 4

What does 'non-GAAP financial measure' disclosure require under SEC Regulation G?

Accepted Answer

Companies must reconcile non-GAAP measures to the most directly comparable GAAP measure and explain why management uses it

Answer

Regulation G requires companies presenting non-GAAP measures to provide a reconciliation to the comparable GAAP measure and explain the measure's usefulness to investors.

Question 5

What is the purpose of the SEC's 'Regulation S-K'?

Accepted Answer

It specifies the non-financial disclosure requirements for registration statements and periodic reports filed with the SEC

Answer

Regulation S-K is the SEC's integrated disclosure system that specifies the content requirements for the non-financial portions of registration statements and periodic reports.

Corporate Governance Practice Test

Corporate Governance Practice Test

Corporate Governance Regulatory Compliance & Disclosure 3