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Regulatory Compliance Basics Flashcards

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  1. What does 'KYC' stand for in financial compliance?

    Answer: Know Your Customer

    Know Your Customer (KYC) is a process financial institutions use to verify the identity of clients and assess potential risks.

  2. The Foreign Corrupt Practices Act (FCPA) prohibits which of the following?

    Answer: Bribing foreign government officials to gain a business advantage

    The FCPA makes it illegal for U.S. companies and individuals to pay bribes to foreign officials to obtain or retain business.

  3. Which of the following best describes a 'regulatory sandbox'?

    Answer: A controlled environment where new business models can be tested under relaxed regulations

    A regulatory sandbox allows businesses to test innovative products or services under regulatory supervision with temporary exemptions from certain rules.

  4. What is the main focus of the Americans with Disabilities Act (ADA) in the workplace?

    Answer: Prohibiting discrimination against qualified individuals with disabilities and requiring reasonable accommodations

    The ADA requires employers to provide reasonable accommodations and prohibits discrimination against qualified individuals with disabilities.

  5. In the context of environmental compliance, what is an 'environmental impact assessment' (EIA)?

    Answer: A process to evaluate the potential environmental effects of a proposed project before it begins

    An EIA evaluates the likely environmental consequences of a proposed project or development before a decision is made to proceed.

  6. What is 'regulatory capture'?

    Answer: When a regulatory agency advances the interests of the industry it is supposed to regulate rather than the public interest

    Regulatory capture occurs when a regulatory agency becomes dominated by the industry it oversees, undermining its public interest mission.

  7. Which regulation requires publicly traded companies to maintain accurate financial records and internal controls?

    Answer: Sarbanes-Oxley Act (SOX)

    The Sarbanes-Oxley Act requires public companies to maintain accurate financial records and establish robust internal controls to prevent fraud.