Legal and Regulatory Compliance in Higher Education Budgeting

Question 1

What is the primary objective of the Sarbanes-Oxley Act of 2002 in the context of financial management and budgeting in higher education?

Accepted Answer

Enhance the accuracy of financial reporting

Answer

Reduce compliance costs for institutions

Answer

Simplify tax filing procedures

Question 2

The Sarbanes-Oxley Act primarily emphasizes which principle?

Accepted Answer

Increased financial transparency

Answer

More lenient penalties for financial misconduct

Answer

Reduced oversight of publicly traded companies

Question 3

Which of the following is NOT a primary goal of compliance with laws and regulations in higher education budgeting and financial management?

Accepted Answer

Maximizing financial effectiveness

Answer

Protecting stakeholder interests

Answer

Ensuring ethical and accountable decision-making

Answer

Promoting institutional transparency

Question 4

Under which federal law are institutions obligated to disclose certain financial information to the public?

Accepted Answer

Higher Education Act (HEA)

Answer

Program Participation Agreement (PPA)

Answer

Government Performance and Results Act (GPRA)

Answer

Uniform Grant Guidance (UGG)

Question 5

Who bears primary responsibility for ensuring compliance with laws and regulations in higher education financial management?

Accepted Answer

Chief Financial Officer (CFO)

Answer

Internal Audit Department

Answer

Compliance Officer

Answer

Board of Trustees

Question 6

Which of the following is NOT a critical component of an effective compliance program?

Accepted Answer

Punitive measures for individuals

Answer

Clearly defined policies and procedures

Answer

Regular risk assessments

Answer

Comprehensive training and education

Question 7

What is the distinction between internal control and compliance?

Accepted Answer

Internal control focuses on mitigating financial risks, while compliance ensures adherence to laws and regulations.

Answer

Compliance focuses on mitigating financial risks, while internal control ensures adherence to laws and regulations.

Answer

There is no distinction between internal control and compliance.

Question 8

Which federal law does NOT directly govern the use of federal funds in higher education?

Accepted Answer

Sarbanes-Oxley Act of 2002

Answer

Higher Education Act of 1965

Answer

Family Educational Rights and Privacy Act (FERPA)

Answer

Americans with Disabilities Act of 1990

Question 9

In a decentralized university system with multiple campuses and entities, which strategy is most effective for ensuring compliance with laws and regulations?

Accepted Answer

Centralized oversight with regular audits

Answer

Self-reporting by individual campuses

Answer

Delegation of authority to each campus without external monitoring

Question 10

The Higher Education Opportunity Act (HEOA) is primarily concerned with regulating:

Accepted Answer

Student Financial Aid

Answer

Faculty Hiring Practices

Answer

Campus Construction Projects

Answer

Institutional Accreditation

Question 11

A fundamental principle of the Sarbanes-Oxley Act of 2002 is:

Accepted Answer

Increased Accountability and Transparency in Corporate Financial Reporting

Answer

Relaxation of Regulations on Student Loan Lending

Answer

Expansion of Federal Funding for Higher Education

Question 12

The Generally Accepted Accounting Principles (GAAP) primarily serve as:

Accepted Answer

Accounting Standards for Higher Education Institutions in Preparing Financial Statements

Answer

Federal Regulations Governing Student Financial Aid Funds

Question 13

A potential negative consequence of non-compliance with legal and regulatory requirements is:

Accepted Answer

Loss of Accreditation

Answer

Improved Student Enrollment Rates

Answer

Increased Funding from Government Sources

Answer

Enhanced Reputation Among Peers

Question 14

The role of an internal auditor in promoting compliance includes:

Accepted Answer

Reviewing Financial Records and Operations for Adherence to Policies and Procedures

Answer

Setting Tuition and Fee Rates

Answer

Negotiating Faculty Contracts

Question 15

An effective compliance strategy for higher education institutions may involve:

Accepted Answer

Establishing a Compliance Committee

Answer

Ignoring Laws and Regulations Deemed Irrelevant

Answer

Eliminating External Audits Altogether

Answer

Reducing the Number of Regulations Applicable to the Institution

Question 16

In the context of financial reporting, 'materiality' refers to:

Accepted Answer

The Degree to Which an Omission or Misstatement Could Influence Financial Statement Users' Judgments

Answer

The Amount of Money Involved in a Financial Transaction

Question 17

A primary responsibility of a higher education institution's governing board regarding compliance is:

Accepted Answer

Overseeing the Institution's Compliance Program

Answer

Hiring and Firing the President

Answer

Managing Day-to-Day Operations

Answer

Setting Strategic Goals

Question 18

The Uniform Guidance (UG) primarily governs:

Accepted Answer

The Administration of Federal Grants and Contracts for Higher Education Institutions

Answer

Accreditation Standards for Higher Education Programs

Answer

Financial Reporting for Non-Profit Organizations

Question 19

What is the main objective of the Sarbanes-Oxley Act?

Accepted Answer

Enhancing corporate governance and financial reporting practices

Answer

Protecting consumers from predatory lending

Answer

Providing tax incentives for businesses

Question 20

What is the primary purpose of an audit?

Accepted Answer

Assessing the accuracy and reliability of financial statements

Answer

Creating a strategic plan for the organization

Answer

Identifying opportunities for cost-cutting

Question 21

What is the key responsibility of the Financial Accounting Standards Board (FASB)?

Accepted Answer

Establishing accounting standards for public companies

Answer

Auditing governmental agencies

Answer

Enforcing securities laws

Question 22

What is the primary duty of a college or university's Chief Financial Officer (CFO)?

Accepted Answer

Overseeing the institution's financial operations

Answer

Managing student affairs

Answer

Developing academic programs

Question 23

What is a common challenge in budgeting for institutions of higher education?

Accepted Answer

Unpredictable funding sources

Answer

Shortage of qualified staff

Answer

Outdated technology

Answer

Inadequate facilities space

Question 24

What is the role of external auditors in ensuring compliance with laws and regulations?

Accepted Answer

Issuing an independent opinion on the fairness of financial statements

Answer

Creating internal control policies

Answer

Training accounting staff