CFE Exam Quiz 13

According to Skinner, emotions are a predisposition to the actions of people. Anger is not a behavior, but a state of being that makes people predisposed to do things like yelling or fighting.

If managers encounter dissatisfied staff, they can improve these emotional situations through adequate compensation and recognition of workers’ accomplishments

Apart from changing the circumstances, elimination of unwanted behavior by avoiding the expected response is also used as a non-punitive approach.

Another non-punitive strategy is the destruction of unwanted behavior by avoiding the expected response. This is a customized variant of the extinction strategy. Business managers pursue a plan of extinction by introducing an internal control scheme.

White-Collar Crimen, written by Sutherland, was an arguable, ambiguous interpretation of the term in a footnote: “Crime in the higher, white-collar community consisting of respectable business, and professional men, or at least respected men.”

The book “White Collar Crime” was written by Edwin H. Sutherland.

In the years preceding their offenses, nearly 97 percent of anti-trust criminals were actively working,

The antitrusters had a median $200,000 (assest) to $40,000 (liabilities), and a median $57,500 (assets) for securities offenders in liabilities was $54,000.

Crimes of the Middle Classes also showed that about 42% of the cooperative defendants have been convicted of a single breach, while only 30% of the uncooperative defendants are so fortunate.

Individuals accused of mail robbery or postal deception in “non-violent economic crimes,” spent at least one-third of their time in prison before going to court.

Due professional care involves the same level of care and skill a prudent professional would exercise in the same profession in similar circumstances, examiners must ensure that enough forecasts are accessible to start a fraud investigation and each test should be diligently and thoroughly carried out

The corporate governance structure of an organization provides accountability and reporting guidelines, defines relations with the parties involved and expectations and sets out the rules and practices which these parties should follow when fulfilling their responsibilities.

The typical parties that were now considered to have included themselves in the corporate governance structure are:
-The board of directors and its sub-committees
-Management
-Shareholders

The board consists of people or executives, who are usually elected by members (e.g. shareholders for a company or representatives for an association) the entity’s voting participants.

Elected directors could be major shareholders or company executives (usually referred to as internal administrators).

There are two different boards that govern corporations including a formalized two-tier system, in some nations, including in the European Union and Asia.

The Board of Executives, headed by the CEO of the company and composed of company managers, monitors the everyday activities of the company.

The Supervisory Board, which is chaired by the President and composed of non-executive directors elected by their shareholders, is responsible for the Executive Board.

The directors serve the middlemen between the owners of the company (i.e. the shareholders) and those who really conduct their business (i.e. management)

The United States has a one-tier system, in which the Board of Directors, elected and non-independent, is a common board.

All corporate oversight is under control of the one-tier board, including the formulation of plans and policy, administrative supervision, compliance with legislation, and coordination with shareholder and operational priorities.

Hypothetically, the shareholders determine who will be a board member.

In some nations, the practice was for companies to replace the role of Chairman with Chief Executive Officer (CEO duality).

CEO duality concentrates considerable power in one entity by allowing the CEO to carry on the two most important roles of management and oversight in corporate governance.

At least the following three board commissions shall be recognized as a best practice by public companies:
-Audit committee
-Compensation committee
-Nominating committee

Responsibilities for the audit committee include but are not limited to the following:

-Internal auditors selection, allowance, and oversight
-Reviewing financial reports
-Track the quality and performance of the internal management structure of the company
-Test findings on internal controls on financial reporting by the board and auditors
-Overseeing and receiving feedback from potential informants the company’s policies
-Supervision of the development and implementation of the code of ethics
-Review and disclose to the legal counsel of the organization all possible cases of fraud

It is necessary that an audit committee works with internal and external auditors on a regular basis to perform its obligations.

The Nominating Committee’s responsibilities include, but are not restricted to:
-Evaluating the current directors’ performance
-Assessing the needs of newly appointed directors
-Having an unbiased nomination process for elected board members
-Communicating any concerns with shareholders involving board members

The duties of shareholders include:
-Select individuals who can serve as directors of the board
-Appoint or ratify the appointment of the independent auditors of the organization
-Remain informed about the activities and performance of the company.
-Read Annual reports and other company correspondences to shareholders are read.
-Attend Meetings with other shareholders

Many corporate governance systems rely on a number of key values or principles, including:
-Fairness
-Accountability
-Transparency
-Responsibility