RCMS Third-Party Compliance Management 2

Question 1

Which document formally establishes a third party's compliance obligations and sets enforceable standards within a vendor relationship?

Accepted Answer

Vendor Code of Conduct

Answer

A Vendor Code of Conduct formally communicates and enforces compliance expectations including ethical, legal, and regulatory standards.

Question 2

A company discovers a key supplier is using sub-contractors not disclosed in the original contract. What is the primary compliance concern?

Accepted Answer

Lack of visibility into the extended supply chain

Answer

Undisclosed sub-contractors create visibility gaps in the supply chain, exposing the organization to unknown compliance and risk exposure.

Question 3

Under the OCC's third-party risk management guidance, which lifecycle phase includes assessing a vendor's financial health and compliance history?

Accepted Answer

Due diligence

Answer

Due diligence occurs before contracting and involves evaluating a vendor's financial stability, compliance record, and operational capacity.

Question 4

What is the primary purpose of including audit rights in a third-party vendor contract?

Accepted Answer

To allow the company to verify the vendor's compliance with agreed standards

Answer

Audit rights give the organization contractual authority to inspect vendor operations and verify compliance with regulatory and contractual obligations.

Question 5

A compliance officer wants to tier vendors by risk level. Which factor is LEAST relevant to determining a vendor's risk tier?

Accepted Answer

Number of years the vendor has been in business

Answer

Years in business is not a direct indicator of risk level; data access, geography, and transaction volume are more material risk factors.

(RCMS) Registered Compliance Management Specialist Certification Practice Test

(RCMS) Registered Compliance Management Specialist Certification Practice Test

RCMS Third-Party Compliance Management 2