National Association of Boards of Long Term Care Administrator (NAB) CORE Practice Exam

The primary purpose of a corporate compliance plan is to:

1. Reduce fraud and establish internal controls

2. Avoid price-fixing charges

3. Identify corrective steps for quality indicators

4. Conduct background checks for staff

The correct answer is: Reduce fraud and establish internal controls

The primary purpose of a corporate compliance plan is to reduce fraud and establish internal controls. This plan serves as a framework that ensures an organization adheres to applicable laws, regulations, and internal policies, ultimately fostering a culture of ethical behavior and accountability. By implementing robust internal controls, the organization can mitigate risks associated with fraudulent activities, such as financial mismanagement or violations of healthcare regulations. While other options touch upon important aspects of an organization’s operational integrity, they do not capture the overarching goal of a compliance plan as comprehensively as the chosen answer. For instance, avoiding price-fixing charges is a specific legal concern that may fall under broader compliance efforts but doesn’t encompass all the objectives of a corporate compliance plan. Similarly, identifying corrective steps for quality indicators and conducting background checks for staff are essential processes within compliance and quality assurance but are narrower in focus than the complete aim of reducing fraud and establishing thorough internal controls.