Exam 15: Conflicts of Interest in the Financial Industry

A type of ________ problem that occurs when a person or institution has multiple objectives that conflict with each other is called ________.

In 2008, it became clear that the credit-rating agencies ________ the risk of the subprime products that ________.

Under the Sarbanes-Oxley Act of 2002, the clause that makes it unlawful for a registered public accounting firm to provide any nonaudit service to a client contemporaneously with an impermissable audit is an example of which remedy of conflicts of interest?

Which of the following policy measures created an Office of Credit Ratings at the SEC with its own staff and the authority to fine credit-rating agencies and to deregister an agency if it produces bad ratings?

Describe what is meant by economies of scope and explain how financial institutions' realizing economies of scope has led to an increase in conflicts of interest.

If a conflict of interest exists

The problem with spinning is that it may ________ the cost of capital to a firm and thus ________ the efficiency of the capital market.

Which of the following is not a conflict of interest in accounting firms?

Which of the following policy measures authorized investors to bring lawsuits against credit-rating agencies for a reckless failure to get the facts when providing a credit rating?

Which policy measure requires investment banks to sever the links between research and securities underwriting?

Conflicts of interest arising from management advisory services brought down ________ in 2002.

Which of the following is a part of the Global Legal Settlement of 2002?

If there isn't sufficient information available, then which of the following approaches to reduce conflicts of interest will have the lowest probability of working?

When the SEC requires companies to publicly release financial statements, which of the following remedies of conflicts of interest does this fall under?

When investment banks allocate shares of a popular but underpriced IPO to executives of other firms in order to attract their business, it is called

Under the Sarbanes-Oxley Act of 2002, the provision that established the PCAOB to supervise accounting firms is an example of

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included which of the following provisions to deal with conflicts of interest in the credit-rating Industry? 1. Created an Office of Credit Ratings at the SEC with its own staff and the authority to fine credit-rating agencies and to deregister an agency if it produces bad ratings. 2) Forced credit-rating agencies to provide reports to the SEC when their employees go to work for a company that has been rated by them in the last twelve months. 3) Prohibited compliance officers from being involved in producing or selling credit ratings. 4) Required the SEC to prevent issuers of asset-backed securities from choosing the credit-rating agencies that will give them the highest rating and supported earlier initiatives by the SEC. 5) Authorized investors to bring lawsuits against credit-rating agencies for a reckless failure to get the facts when providing a credit rating.

Under the Global Legal Settlement of 2002, the provision that requires, for a period of five years, brokerage firms to contract with independent research firms to provide information to their customers is an example of

Which policy measure increases the punishment for white-collar crime and obstruction of official investigations?

Which of the following is not a part of the Sarbanes-Oxley Act of 2002?