CFA Legal Compliance & Ethical Standards 1

Question 1

Why is legal compliance important in fraud investigations?

Accepted Answer

To protect evidence integrity and avoid liability

Answer

To delay investigations.

Answer

To promote biased reporting.

Answer

To simplify documentation.

Question 2

Which law protects whistleblowers from retaliation?

Accepted Answer

Whistleblower Protection Act

Answer

Freedom of Information Act.

Answer

Civil Rights Act.

Answer

Truth in Lending Act.

Question 3

What ethical principle requires maintaining confidentiality?

Accepted Answer

Confidentiality

Answer

Transparency.

Answer

Publicity.

Answer

Flexibility.

Question 4

Which action is considered unethical during an investigation?

Accepted Answer

Fabricating evidence

Answer

Following proper evidence procedures.

Answer

Maintaining chain of custody.

Answer

Reporting findings accurately.

Question 5

How can investigators avoid conflicts of interest?

Accepted Answer

Disclosing and avoiding conflicts of interest

Answer

Ignoring relationships with parties involved.

Answer

Accepting gifts from subjects.

Answer

Making private deals.

Question 6

Which regulation governs financial reporting for public companies?

Accepted Answer

Sarbanes-Oxley Act (SOX)

Answer

Patriot Act.

Answer

Affordable Care Act.

Answer

Clean Water Act.

Question 7

Which action upholds ethical standards during interviews?

Accepted Answer

Treating subjects with respect and fairness

Answer

Threatening witnesses.

Answer

Using deception without cause.

Answer

Suppressing evidence.

Question 8

Which professional code guides certified fraud examiners?

Accepted Answer

ACFE Code of Professional Ethics

Answer

Code of Conduct for Engineers.

Answer

Medical Ethics Code.

Answer

Attorney Code of Conduct.

Question 9

Why must investigators adhere to both legal and ethical standards?

Accepted Answer

To strengthen credibility and maintain lawful practices

Answer

To confuse juries.

Answer

To manipulate findings.

Answer

To delay court cases.