General

Question 1

What are the DOJ three questions about comliance programs? (2023)

Answer 1

1. Is the compliance program well designed?
2. Is the compliance program applied earnestly and in good faith (independent and adequately resourced)?
3. Does the compliance program work in practice?

Question 2

What are the three principles/obligations of the SCCE Code of Ethics

Answer 2

1. Principle I- Obligations to the Public (refuse, escalate, resign, report)
2. Principle II – Obligations to the Employing Organization (fiduciary duty)
3. Principle III – Obligations to the Profession (do not agree to incomplete resources or disclose info on present or former employer without consent)

Question 3

Conflict of Interest Protections (Sarbanes Oxley)

Answer 3

• The CEO, Controller, CFO, Chief Accounting Officer or person in an equivalent position cannot have been employed by the company’s audit firm during the 1-year period preceding the audit.
• The lead audit or coordinating partner and the reviewing partner must rotate off of the audit every 5 years.

Question 4

Whistleblower Protections (Sarbanes Oxley)

Answer 4

• Section 806 of the Sarbanes-Oxley Act protects whistleblowers at covered employers who report to their supervisor or the government conduct that they reasonably believe constitutes wire fraud, mail fraud, bank fraud, securities fraud, or a violation of any rule or regulation of the SEC, or any provision of Federal law relating to fraud against shareholders.

Question 5

Independence of Audits (Title II)

Answer 5

1. It prohibits the registered external auditor of a public company from providing certain non-audit services to that public company audit client.
2. Specifies communication that is required between the auditors and the public company’s audit committee (or board of directors), and requires periodic rotation of the audit partners managing a public company’s audits.
   - Auditors should not have mutual or conflicting interests with their audit clients
   - Auditors should not audit their own audit work
   - Auditors should not function as client management or employees;
   - Internal audit activity must be free from interference in determining the scope of internal auditing, performing work, and communicating results. The chief audit executive must disclose such interference to the board and discuss the implications.

Question 6

Dodd-Frank Wall Street Reform Act
Whistleblower Protections

Answer 6

• The Commodity Futures Trading Commission’s (CFTC) Whistleblower Program, created by the Dodd-Frank Act, provides monetary incentives to individuals who come forward to report possible violations of the Commodity Exchange Act (CEA). It also provides anti-retaliation protections for whistleblowers.
• If a whistleblower brings original insider information about financial fraud to the SEC and the agency successfully moves forward with action against the alleged perpetrator, the whistleblower may be entitled to anywhere from 10 percent to 30 percent of the total fines levied if > $1M

Question 7

FCPA main purpose

Answer 7

The Foreign Corrupt Practices Act of 1977 (“FCPA”), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.

Question 8

UK Bribery Act main purpose

Answer 8

The U.K. Bribery Act of 2010 criminalized bribing foreign officials and business representatives in both the public and private sectors.