Which item is NOT listed as a core component of an effective compliance program?

• A. Written standards of conduct, policies, and procedures.
• B. A compliance officer.
• C. Education and training.
• D. Annual financial reporting to shareholders.

Answer: (D)

The main idea is that an effective compliance program is built from internal controls and governance elements that guide behavior, oversee adherence, and train people to follow policies. Written standards of conduct, policies, and procedures establish the rules everyone should follow. A compliance officer provides accountability and coordination to ensure those rules are implemented across the organization. Education and training ensure employees understand the policies and know how to apply them in real situations.

Annual financial reporting to shareholders, while crucial for governance and external transparency, isn’t a core internal component of the compliance program’s preventive and detection framework. It’s a finance-and-disclosures responsibility aimed at external stakeholders, not part of the internal structure designed to prevent and address FWA.