CrFA Regulatory Compliance 5

Question 1

Under SOX Section 304, when an issuer restates due to misconduct, what must the CEO and CFO reimburse?

Accepted Answer

Bonuses, incentive or equity-based compensation, and stock-sale profits received in the 12 months after the misstated filing

Answer

Section 304 requires CEO and CFO reimbursement of incentive compensation and stock-sale profits for the 12-month period following the misstated filing.

Question 2

SEC Rule 10D-1, implementing Dodd-Frank Section 954, requires listed companies to recover erroneously awarded incentive compensation from executive officers over what period?

Accepted Answer

The three completed fiscal years preceding the date a restatement is required, on a no-fault basis

Answer

Rule 10D-1 mandates no-fault recovery of excess incentive compensation received during the three completed fiscal years before the restatement date.

Question 3

In Delaware, the Caremark doctrine imposes which duty on corporate directors?

Accepted Answer

A duty of oversight to implement and monitor reporting systems for compliance risks

Answer

Caremark holds directors liable for bad-faith failure to implement or monitor reasonable information and reporting systems.

Question 4

Under the FCPA, which state of mind satisfies the knowledge requirement for payments made through a third-party intermediary?

Accepted Answer

Awareness of a high probability that the payment will be passed to a foreign official, including conscious disregard

Answer

The FCPA defines knowledge to include awareness of a high probability of the circumstance, capturing willful blindness.

Question 5

To be eligible for any DOJ cooperation credit in a corporate criminal investigation, what must a company provide?

Accepted Answer

All relevant non-privileged facts about the individuals involved in the misconduct

Answer

DOJ policy conditions cooperation credit on disclosing all relevant non-privileged facts about individuals involved, and it does not require a privilege waiver.

CrFA - Certified Forensic Accountant Practice Test

CrFA - Certified Forensic Accountant Practice Test

CrFA Regulatory Compliance 5