RCMS Regulatory Frameworks & Standards 5 — Questions and Answers
Question 1: Which international standard provides a framework specifically for anti-bribery management systems?
- ISO 19600
- ISO 27001
- ISO 37001 (Correct answer)
- ISO 31000
Correct answer: ISO 37001
ISO 37001 specifies requirements for establishing and maintaining an anti-bribery management system to prevent, detect, and address bribery.
Question 2: Under the SEC's Regulation Fair Disclosure (Reg FD), what must a public company do if it inadvertently discloses material nonpublic information to a select group?
- File an 8-K within 30 days
- Publicly disclose the information promptly (Correct answer)
- Notify the SEC within 24 hours
- Issue a press release within 5 business days
Correct answer: Publicly disclose the information promptly
Reg FD requires that when material nonpublic information is inadvertently disclosed, the company must make public disclosure promptly — as soon as reasonably practicable.
Question 3: A financial institution files a Suspicious Activity Report (SAR) with FinCEN. Under BSA regulations, how long must the institution retain a copy of the SAR?
- 3 years
- 5 years (Correct answer)
- 7 years
- 10 years
Correct answer: 5 years
BSA regulations require financial institutions to retain SARs and supporting documentation for five years from the date of filing.
Question 4: In the context of the three lines of defense model, which line is responsible for monitoring and testing the effectiveness of risk management controls?
- First line (business operations)
- Second line (risk and compliance functions)
- Third line (internal audit) (Correct answer)
- Fourth line (external audit)
Correct answer: Third line (internal audit)
The third line — internal audit — provides independent assurance by evaluating whether the first and second lines' controls are effective and operating as intended.
Question 5: Which U.S. environmental law establishes the framework for regulating the disposal of solid and hazardous waste?
- Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
- Clean Air Act
- Resource Conservation and Recovery Act (RCRA) (Correct answer)
- Toxic Substances Control Act (TSCA)
Correct answer: Resource Conservation and Recovery Act (RCRA)
RCRA provides EPA with authority to control hazardous waste generation, transportation, treatment, storage, and disposal from cradle to grave.
Question 6: A compliance officer must assess whether a new product falls under CFPB jurisdiction. Which factor is most determinative?
- The size of the financial institution offering the product
- Whether the product is a 'consumer financial product or service' as defined by Dodd-Frank (Correct answer)
- Whether the product is offered in interstate commerce
- Whether the institution is federally or state chartered
Correct answer: Whether the product is a 'consumer financial product or service' as defined by Dodd-Frank
The CFPB's jurisdiction turns on whether the product or service qualifies as a 'consumer financial product or service' under Title X of Dodd-Frank.
Question 7: Which principle in the OECD Guidelines for Multinational Enterprises addresses the responsibility of companies to respect human rights?
- Pillar I — State duty to protect
- Pillar II — Corporate responsibility to respect
- Pillar III — Access to remedy
- Chapter IV — Human Rights (Correct answer)
Correct answer: Chapter IV — Human Rights
Chapter IV of the OECD Guidelines for Multinational Enterprises addresses human rights, incorporating the UN Guiding Principles on Business and Human Rights.
RCMS Regulatory Frameworks & Standards 5
Which international standard provides a framework specifically for anti-bribery management systems?