RCMS Regulatory Frameworks & Standards 3

Question 1

Which U.S. law requires publicly traded companies to establish internal controls over financial reporting and have management assess their effectiveness annually?

Accepted Answer

Sarbanes-Oxley Act Section 404

Answer

SOX Section 404 mandates that management assess and report on the effectiveness of internal controls over financial reporting each year.

Question 2

In the context of AML compliance, what does the term 'layering' refer to?

Accepted Answer

Disguising the trail of illicit funds through complex transactions

Answer

Layering is the second stage of money laundering, involving complex transactions designed to obscure the audit trail of illicit funds.

Question 3

Which federal regulation requires financial institutions to verify the identity of beneficial owners of legal entity customers?

Accepted Answer

FinCEN Customer Due Diligence Rule

Answer

FinCEN's CDD Rule, effective 2018, requires covered financial institutions to identify and verify beneficial owners owning 25% or more of legal entity customers.

Question 4

The NIST Cybersecurity Framework (CSF) organizes its core functions in which order?

Accepted Answer

Identify, Protect, Detect, Respond, Recover

Answer

The original NIST CSF core consists of five functions: Identify, Protect, Detect, Respond, and Recover (CSF 2.0 added Govern).

Question 5

Under the Health Insurance Portability and Accountability Act (HIPAA), which rule specifically governs the security of electronic protected health information (ePHI)?

Accepted Answer

Security Rule

Answer

The HIPAA Security Rule establishes national standards to protect ePHI through administrative, physical, and technical safeguards.

(RCMS) Registered Compliance Management Specialist Certification Practice Test

(RCMS) Registered Compliance Management Specialist Certification Practice Test

RCMS Regulatory Frameworks & Standards 3