RCMS Ethics & Corporate Governance 3

Question 1

Which governance structure element ensures that no single individual controls all aspects of a critical business process?

Accepted Answer

Segregation of duties

Answer

Segregation of duties divides key tasks among multiple people to reduce the risk of error or fraud going undetected.

Question 2

A publicly traded company's board has seven members, five of whom have no material relationship with the company. Under NYSE listing standards, does this board meet the independence requirement?

Accepted Answer

Yes, because a majority of directors are independent

Answer

NYSE listing standards require that a majority of board members be independent directors.

Question 3

When a compliance officer faces pressure from management to ignore a regulatory violation to avoid reputational damage, the BEST ethical course of action is to:

Accepted Answer

Document the pressure and escalate through established reporting channels

Answer

The compliance officer should document the pressure and escalate it through proper channels such as the audit committee or ethics hotline.

Question 4

What is the primary distinction between a company's code of ethics and a code of conduct?

Accepted Answer

Codes of ethics articulate values and principles; codes of conduct specify required behaviors

Answer

A code of ethics states overarching values and moral principles, while a code of conduct translates those into specific behavioral rules.

Question 5

Under the Federal Sentencing Guidelines, which factor can REDUCE a company's culpability score when a compliance violation is discovered?

Accepted Answer

Having an effective compliance and ethics program in place

Answer

The Federal Sentencing Guidelines reduce culpability scores for organizations that had an effective compliance program prior to the offense.

(RCMS) Registered Compliance Management Specialist Certification Practice Test

(RCMS) Registered Compliance Management Specialist Certification Practice Test

RCMS Ethics & Corporate Governance 3