CSM Professional Ethics & Compliance 2 — Questions and Answers
Question 1: A sales rep discovers a competitor's confidential pricing sheet left by accident at a trade show. What is the ethical course of action?
- Use it to undercut the competitor's pricing
- Return it to the competitor without reviewing it (Correct answer)
- Share it only with the sales manager
- Keep it but don't act on it immediately
Correct answer: Return it to the competitor without reviewing it
Using or retaining a competitor's confidential information obtained by accident is unethical and potentially illegal; it should be returned immediately.
Question 2: Under the Foreign Corrupt Practices Act (FCPA), which of the following payments is generally permitted?
- Payments to foreign officials to secure a contract
- Facilitating payments to expedite routine government actions (Correct answer)
- Gifts above $500 to government procurement officers
- Kickbacks disguised as consulting fees
Correct answer: Facilitating payments to expedite routine government actions
The FCPA has a narrow exception for facilitation payments that expedite routine, non-discretionary government actions like processing permits.
Question 3: A sales manager pressures the team to backdate a contract to meet the quarterly quota. This action primarily violates which principle?
- Customer centricity
- Integrity and honesty (Correct answer)
- Competitive aggressiveness
- Revenue recognition flexibility
Correct answer: Integrity and honesty
Backdating contracts constitutes fraud and directly violates the core ethical principle of integrity and honesty in business dealings.
Question 4: Which law governs telemarketing sales practices in the United States and requires do-not-call compliance?
- Sherman Antitrust Act
- Telephone Consumer Protection Act (TCPA) (Correct answer)
- Robinson-Patman Act
- Federal Trade Commission Act Section 7
Correct answer: Telephone Consumer Protection Act (TCPA)
The TCPA regulates telemarketing calls, texts, and faxes, including enforcement of the National Do Not Call Registry.
Question 5: An ethical sales culture is best reinforced when leadership does which of the following?
- Rewards top revenue producers regardless of their methods
- Models ethical behavior and applies rules consistently (Correct answer)
- Keeps the code of conduct confidential to senior staff
- Focuses only on compliance training during onboarding
Correct answer: Models ethical behavior and applies rules consistently
Ethical culture is most durable when leaders visibly model the behavior they expect and enforce standards consistently across all levels.
Question 6: Price fixing between competing companies violates which body of U.S. law?
- Securities Exchange Act
- Uniform Commercial Code
- Sherman Antitrust Act (Correct answer)
- Sarbanes-Oxley Act
Correct answer: Sherman Antitrust Act
The Sherman Antitrust Act prohibits agreements among competitors that restrain trade, including price fixing conspiracies.
Question 7: A customer asks a sales rep to omit a known product defect from the written proposal. The rep should:
- Omit it to close the deal and disclose later
- Include disclosure of the defect as required by honest dealing (Correct answer)
- Ask the customer to sign a waiver first
- Defer to whatever the manager decides
Correct answer: Include disclosure of the defect as required by honest dealing
Material omissions in sales proposals can constitute fraudulent misrepresentation; honest dealing requires disclosing known defects.
CSM Professional Ethics & Compliance 2
A sales rep discovers a competitor's confidential pricing sheet left by accident at a trade show.
What is the ethical course of action?