Regulatory Compliance Flashcards

A client deposits $9,500 in cash on three consecutive days to avoid a reporting threshold, using funds from a legitimate business. Which statement is correct?

Answer: The conduct is illegal structuring even though the funds are legitimate

31 U.S.C. 5324 prohibits structuring transactions to evade reporting requirements regardless of the funds' source.

When must a financial institution file a Currency Transaction Report (CTR)?

Answer: For cash transactions exceeding $10,000 in a business day, within 15 calendar days

CTRs are required for cash transactions (including aggregated ones) over $10,000 per business day and are due within 15 days.

Which type of SEC registrant is exempt from the SOX Section 404(b) auditor attestation requirement on internal control over financial reporting?

Answer: Non-accelerated filers

Dodd-Frank permanently exempted non-accelerated filers from the 404(b) auditor attestation requirement.

The FCPA accounting provisions (books and records and internal controls) apply directly to which entities?

Answer: Issuers with securities registered with or reporting to the SEC

The FCPA's accounting provisions apply to issuers, while the anti-bribery provisions also reach domestic concerns and certain foreign persons.

Which PCAOB standard governs an audit of internal control over financial reporting integrated with a financial statement audit?

Answer: AS 2201

AS 2201 establishes requirements for auditing ICFR in an integrated audit.

Which SEC rule serves as the primary general anti-fraud provision in the purchase or sale of securities?

Answer: Rule 10b-5

Rule 10b-5 under Section 10(b) of the Exchange Act prohibits fraud and material misstatements in securities transactions.

How long must financial institutions generally retain Bank Secrecy Act records such as CTRs and SAR supporting documentation?

Answer: 5 years

BSA regulations generally require records to be retained for five years.