1. Acme Enterprises is a foreign company that lists its common stock on a U.S. stock exchange. Management believes in making regular payments to officials to encourage securing significant contracts. In accordance with the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act (FCPA), all of the following statements are true except

1. Acme can be prosecuted under the U.S. Foreign Corrupt Practices Act even though it is not headquartered in the U.S.
2. Any corrupt payments made by Acme while in the U.S. could be viewed as a violation under the U.S. Foreign Corrupt Practices Act.
3. Acme cannot be prosecuted under the U.S. Foreign Corrupt Practices Act if the payments are approved by management and made in a foreign country.
4. Acmes officers, directors, employees, or agents can be prosecuted under the U.S. Foreign Corrupt Practices Act if their actions constitute violations.

1. With respect to the internal control provisions of the U.S. Foreign Corrupt Practices Act (FCPA), all of the following statements are true except that

1. The FCPA prescribes a particular set of internal controls that companies are required to develop and implement.
2. Internal controls are used by companies to help provide reasonable assurance regarding reliability of financial reporting.
3. Access to company assets are permitted in accordance with managements general and specific authorization.
4. Good internal controls can help prevent not only FCPA violations, but also other illegal or unethical conduct.

1. Firms subject to the reporting requirements of the Securities Exchange Act of 1934 are required by the Foreign Corrupt Practices Act of 1977 to maintain satisfactory internal control. The role of the independent auditor relative to this act is to
2. Report clients with unsatisfactory internal control to the SEC.
3. Provide assurances to users as part of the traditional audit attest function that the client is in compliance with the present legislation.
4. Express an opinion on the sufficiency of the clients internal control to meet the requirements of the Act.
5. Attest to the financial statements.

1. Which of the following is a true statement regarding the differences between the FCPA and the UKBA?
2. The FCPA does not apply to commercial bribery or passive bribery, but the UKBA prohibits both.
3. The FCPA, but not the UKBA, has extraterritorial jurisdiction, and the UKBA, but not the FCPA, applies to commercial bribery.
4. The UKBA is based on the FCPA, so they have no significant differences.
5. The FCPA, but not the UKBA, allows facilitation payments and prohibits commercial bribery.

1. Which of the following best describes an important provision of the U.S. Foreign Corrupt Practices Act?
2. Auditors cannot provide bookkeeping or other services related to the accounting records or financial statements of the audit client.
3. Companies must follow the laws of the their home country as well as the laws of the countries where any foreign subsidiaries are located.
4. The CEO and CFO must certify that they have no knowledge of any corrupt practices occurring in any overseas subsidiaries of U.S. companies.
5. The internal accounting controls should be examined, and if material weaknesses are found, controls must be strengthened.

1. The United Kingdom Bribery Act (UKBA) of 2010 is similar to the Foreign Corrupt Practices Act (FCPA) of 1977 because it prohibits
2. Commercial bribery.
3. Passive bribery.
4. Bribery of a foreign official.
5. Failure to prevent bribery.

1. A company is headquartered in the U.S. and has international subsidiaries in several countries. One of the companys international subsidiaries created several off-the-book accounts to pay bribes to foreign officials, and these payments were not properly reflected in the subsidiarys books and records. The subsidiary has certain internal controls in place, but does not utilize the COSO internal controls framework and does not have a compliance program in place. Based on the information presented, all of the following are violations by the subsidiary under the internal control provisions of U.S. Foreign Corrupt Practices Act except the
2. Use of bribery payments.
3. Failure to use the COSO framework for internal controls.
4. Failure to have internal controls to ensure that transactions were appropriately recorded.
5. Lack of a compliance program as part of its system of internal controls.

1. The least important criterion for an organization to implement an ethical code of conduct is to
2. Establish the legal boundaries within which the organization operates.
3. Provide guidance in internal decision-making.
4. Establish a framework for ethical management.
5. Provide guidance in external decision making.

1. Which one of the following statements concerning the code of ethics provisions of Section 406 of the Sarbanes-Oxley Act (SOX) is not true?
2. It requires a company to make its code of ethics publicly available either on its website or in its annual report.
3. It requires that a companys code of ethics apply uniformly to officers and employees.
4. It defines what a code of ethics is for the purpose of the rule.
5. It requires that a company disclose changes to its code of ethics.

1. Which one of the following statements concerning the U.S. Foreign Corrupt Practices Act is not true?
2. It applies to individuals as well as businesses.
3. It requires companies to maintain an adequate system of internal controls.
4. It prohibits payments above a materiality threshold to foreign officials to obtain business.
5. It requires companies to keep books and records that accurately reflect the transactions.

1. According to the United Kingdom Bribery Act of 2010 (UKBA),
2. Individuals and organizations violating the act may be fined, but individuals cannot be imprisoned.
3. A foreign company with only an agent in the U.K. cannot be liable under the act.
4. A commercial organization is liable for failure to prevent a bribe to retain business.
5. Commercial bribery and passive bribery are permitted.

1. A U.S. publicly traded company issued its corporate social responsibility (CSR) report. The report included the amount of renewable resources it uses in its products. Which one of the following is not a reason for making the disclosure?
2. The company was required by law to file a report with this disclosure.
3. The company may be able to charge a premium and gain customer loyalty.
4. The report can be used as a marketing tool for the companys products.
5. The report can be used to differentiate the company from its competitors.

1. Essential elements in the development of an organizations ethics policy include all of the following except
2. Articulation of organizational values.
3. Input from the board of directors in addition to management and employees.
4. Allowances for exceptional circumstances.
5. Relevance to day-to-day implementation.

1. IMAs Statement on Management Accounting, Values and Ethics: From Inception to Practice, recommends a defined code of conduct and ethical behavior for all organizations. One advantage of having such a code is that it
2. Provides employees with guidance for handling unfamiliar situations.
3. Ensures ethical behavior by all employees.
4. Shields the organization from liability in cases of loss of stockholder value due to fraud.
5. Eases the investigative process performed by police and prosecutors in cases of suspected fraud.

1. The guidance for corporate action that is socially responsible and sustainable includes
2. Mitigative actions to reduce negative environmental effects of operations.
3. Paying taxes legally owed after using any tax avoidance opportunities in the applicable statutes.
4. No requirement for philanthropy because a corporations primary responsibility is long-term profitability.
5. An awareness of and commitment to human rights within the entity but not in the external parts of the value chain.

1. Which one of the following is a permitted transaction under the U.S. Foreign Corrupt Practices Act?
2. Payments to close friends of government officials to obtain an exception to a regulation.
3. Payments to government officials to circumvent importation rules in countries where such payments are a customary business practice by multinational competitors.
4. Payments to expedite routine governmental action.
5. Payments to customs officials to enable the release of an oil drilling rig and other equipment.