Ethics, Compliance, and Professional Responsibility
What this domain tests
Ethics, Compliance, and Professional Responsibility tests ethical decision frameworks, corporate compliance, anti-corruption, and professional duties. Expect FCPA, SOX, and attorney-conduct rules.
Core rules and concepts
- Frameworks: Utilitarianism weighs aggregate outcomes; deontology focuses on duties and rights; virtue ethics asks what a person of character would do. Exams often ask you to apply, not label.
- Compliance programs: The U.S. Sentencing Guidelines for Organizations (FSGO) reduce penalties for effective programs: standards, oversight, training, monitoring, discipline, and remediation. A program is not a safe harbor.
- FCPA: Prohibits bribery of foreign officials to obtain business and requires accurate books and records. Facilitation payments are a narrow exception under the 1988 amendments but still risky and illegal in many countries.
- SOX: CEO/CFO certification, internal controls, audit committees, whistleblower protections, and document retention.
- Professional responsibility: Attorneys must avoid conflicts, preserve confidentiality (with crime-fraud exception), and not counsel fraud. In-house counsel may wear business hats, but privilege can be limited.
Worked example
A sales manager authorizes a $50,000 "consulting fee" to a foreign official's cousin to win a contract. The payment is routed through an agent. Under the FCPA, the government need not show the official personally received it; the payment shows corrupt intent if it is intended to influence official action. The books-and-records violation arises from disguising it. Facilitation payments are narrow and do not cover obtaining a contract, so the exception fails.
Traps that cost marks
- Treating legality as the same as ethics; both matter.
- Assuming a compliance program immunizes the company.
- Reading the FCPA facilitation exception broadly.
- Forgetting the crime-fraud exception to attorney-client privilege.