CTP Regulatory Compliance and Ethics 3

Question 1

According to the AFP (Association for Financial Professionals) Code of Ethics, what is the primary obligation of treasury professionals?

Accepted Answer

Act with integrity, competence, and in the best interests of their organization and the profession

Answer

AFP's Code of Ethics requires treasury professionals to act with integrity, maintain professional competence, and serve both their organization and the broader treasury profession ethically.

Question 2

What does the concept of 'fiduciary duty' require of a corporate treasurer in managing company funds?

Accepted Answer

Acting in the best interests of the company and its stakeholders rather than in personal self-interest

Answer

Fiduciary duty requires treasury professionals to place the company's and stakeholders' interests above their own, making decisions that benefit the organization rather than themselves.

Question 3

What is the primary purpose of the 'segregation of duties' principle in treasury operations?

Accepted Answer

Preventing fraud and errors by requiring multiple individuals to complete different parts of sensitive transactions

Answer

Segregation of duties prevents any single employee from having complete control over a financial transaction, reducing the risk of both intentional fraud and undetected errors.

Question 4

Under Sarbanes-Oxley Act Section 302, which corporate officers are personally required to certify the accuracy of quarterly and annual financial reports?

Accepted Answer

The CEO and CFO

Answer

SOX Section 302 requires the CEO and CFO to personally certify the accuracy of financial statements filed with the SEC, creating personal liability for material misstatements.

Question 5

What protections does the Dodd-Frank Act's whistleblower program provide to treasury professionals who report securities violations?

Accepted Answer

Legal protection from retaliation and potential monetary awards for tips leading to successful SEC enforcement actions

Answer

Dodd-Frank's whistleblower provisions protect employees from retaliation when reporting potential securities violations to the SEC and may provide financial awards of 10-30% of sanctions exceeding $1 million.

Certified Treasury Professional Exam Practice Test

Certified Treasury Professional Exam Practice Test

CTP Regulatory Compliance and Ethics 3