chapter 6 - the role of government

Which of the following government agencies jointly enforce the Foreign Corrupt Practices Act?

The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC)

Which of the following is a difference between grease payments and bribes under the Foreign Corrupt Practices Act?

Unlike grease payments, bribes induce foreign officials to act in violation of their lawful duty.

Title VIII of the Sarbanes-Oxley Act addresses issues related to _____.

corporate and criminal fraud accountability

Which of the following is true of the effective compliance program prescribed by the Federal Sentencing Guidelines for Organizations?

A high-level official (such as a corporate ethics officer) must be in charge of and accountable for the compliance program.

Which of the following responsibilities was granted to the Consumer Financial Protection Bureau (CFPB)?

Authority to examine and enforce regulations for banks and credit unions with assets over $10 billion

Which of the following statements is true of the culpability score?

It can be increased or decreased according to predetermined factors.

Which of the following statements is true of the Federal Sentencing Guidelines for Organizations?

It holds businesses liable for the criminal acts of their employees and agents.

Which of the following is true of the Sarbanes-Oxley Act (SOX)?

It protects employees of companies who provide evidence of fraud.

Which of the following did the government formulate to penalize corporate wrongdoing

The Sarbanes-Oxley Act

Under the Foreign Corrupt Practices Act, payments made with the knowledge that any portion of the payment is to be passed along to a foreign official for a prohibited purpose under the Foreign Corrupt Practices Act are known as _____.

bribes

The formula used to calculate the total fine sentenced by the Federal Sentencing Guidelines for Organizations (FSGO) is:

the base fine multiplied by the culpability score.

In September and October 2008, financial markets around the world suffered a severe crash as:

there was aggressive lending to subprime borrowers in a deregulated environment.

The _____ is a government agency within the Federal Reserve that oversees financial products and services.

Consumer Financial Protection Bureau

Title IX of the Sarbanes-Oxley Act focuses on:

white-collar crime penalty enhancements.

The _____ refers to the legislation that was promoted as the "fix" for the extreme mismanagement of risk in the financial sector that led to a global financial crisis in 2008-2010.

Dodd-Frank Wall Street Reform and Consumer Protection Act

The _____ is a government agency established to prevent banks from failing and otherwise threatening the stability of the U.S. economy.

Financial Stability Oversight Council

Which of the following statements is true of the Foreign Corrupt Practices Act?

It encompasses all the measures that were previously used to control unethical overseas transactions by U.S. corporations.

Which of the following statements is true of Title II of the Sarbanes-Oxley Act?

It requires senior auditors to rotate off an account every five years and junior auditors every seven years.

Which of the following is true of the penalties under the Foreign Corrupt Practices Act?

Officers, directors, stockholders, employees, and agents are subject to a fine of up to $250,000 per violation and imprisonment for up to five years.

The illegal and unethical practice of providing old (or early) investors above-average returns on their investment with funds raised from new (or late) investors in the absence of any real business operation to generate profits is referred to as the _____.

Ponzi scheme

Which of the following is a routine governmental action?

Providing police protection for the transit of goods across a country

The creation of the _____ was an attempt to reestablish the perceived independence of auditing companies after the corporate accounting scandals of the early 2000s

Public Company Accounting Oversight Board

Which of the following requirements is included in the status of organizational probation under the Federal Sentencing Guidelines for Organizations (FSGO)?

Reporting a business's financial condition to the court on a periodic basis

The _____ is a legislative response to the corporate accounting scandals of the early 2000s that cover the financial management of businesses.

Sarbanes-Oxley Act

Which of the following legislations required full disclosure of funds that were taken out of or brought into the United States before the Foreign Corrupt Practices Act was introduced?

The Bank Secrecy Act

Which of the following is true of facilitation payments under the Foreign Corrupt Practices Act (FCPA)?

The FCPA finds them acceptable if they expedite a routine governmental action.

Sebastian and Amy are arguing over secondary legislations that were in place prior to the passing of the Foreign Corrupt Practices Act (FCPA). Amy is of the opinion that the FCPA encompasses all secondary measures that were in use to prohibit corrupt practices. Sebastian disagrees with Amy on this point. Which of the following, if true, would strengthen Amy's argument?

The FCPA requires corporations to fully disclose all transactions conducted with foreign officials in line with the SEC provisions.

Which of the following is a legislation that was introduced to control bribery and other less obvious forms of payment to overseas officials and politicians by American publicly traded companies?

The Foreign Corrupt Practices Act

Which of the following legislations could fine companies for failing to disclose bribes and other forms of payments to foreign officials before the Foreign Corrupt Practices Act was introduced?

The Securities and Exchange Commission

Which of the following key U.S. legislations is an attempt to discourage, if not prevent, illegal conduct within organizations?

The U.S. Federal Sentencing Guidelines for Organizations

Why was the Foreign Corrupt Practices Act criticized?

The act formally recognizes the facilitation payments, which would otherwise be acknowledged as bribes.

Which of the following is true of the penalties under the Federal Sentencing Guidelines for Organizations (FSGO)?

They include organizational probation.

The maximum penalty that a judge can impose upon an organization for violating the Federal Sentencing Guidelines for Organizations is a penalty worth:

the full amount of the organization's assets.

The _____ states that there should be a key restriction in the legislation to limit the ability of banks to trade on their own accounts (termed proprietary trading).

Volcker rule

The _____ is a fine that is set high enough by the Federal Sentencing Guidelines for Organizations to match all the assets of an organization and effectively puts the organization out of business.

death penalty

Brendon Inc. required a permit to open its business in a foreign country. Although it had met all the requirements for the permit, the officials delayed providing Brendon Inc. with the permit. To expedite the process, the company made a payment to a high-ranking official who has the authority to grant the permit. Which of the following types of payment does this scenario exemplify?

facilitation payment

Under the Foreign Corrupt Practices Act, payments that are acceptable (legal) provided they expedite or secure the performance of a routine governmental action are called _____.

facilitation payments

Under the Foreign Corrupt Practices Act, payments to foreign officials in order to expedite or secure the performance of a routine governmental action are known as _____.

grease payments

Under the Federal Sentencing Guidelines for Organizations, the death penalty:

is warranted where the organization was operating primarily for a criminal purpose.