1. Administrative agencies are usually part of the legislative branch.
a.
True
b.
False
2. Failure to comply with regulations set in place by agencies may result in the imposition of fines as well as the
revocation of licenses and permits.
a.
True
b.
False
True
1
Easy
Introduction
3. Agencies lack the authority to conduct formal adjudications.
a.
True
b.
False
False
1
Easy
4. A rule made by a federal agency is not final until approved by Congress.
a.
True
b.
False
False
1
Moderate
5. Actions of administrative agencies often affect businesses but rarely affect individuals.
a.
True
False
1
Easy
Introduction
b.
False
6. Federal administrative rules that are not properly published in the Federal Register are void.
a.
True
b.
False
True
1
Easy
7. The U.S. Constitution does not specifically provide for administrative agencies.
a.
True
b.
False
True
1
Easy
8. Administrative agencies have been referred to as the fourth branch of the U.S. Government.
a.
True
b.
False
True
1
Easy
9. Formal administrative adjudications at the federal level typically include a prehearing discovery phase.
a.
True
b.
False
True
False
1
Moderate
10. The Fifth Amendment’s protection against self-incrimination applies to all records including all those that the
government requires to be kept.
a.
True
b.
False
False
1
Moderate
11. Determining whether a regulated company or person is complying with laws and regulations cannot be a function of
administrative agencies because of Congressional prohibitions.
a.
True
b.
False
False
1
Moderate
12. Generally, an administrative agency may only do what Congress or the state legislature has authorized it to do.
a.
True
b.
False
True
1
Moderate
6-5a Only Delegated Powers
13. Agencies are required to hold a formal public hearing before enacting any regulation.
a.
True
b.
False
False
1
Moderate
14. Administrative agencies are a relatively new development in the history of the U.S.
a.
True
b.
False
False
1
Easy
15. The general rule is that agency action is ripe for judicial review when the impact of the action is sufficiently direct and
immediate as to make review appropriate.
a.
True
b.
False
True
1
16. Administrative agencies have subpoena power to make mandatory requests for information.
a.
True
b.
False
True
1
Moderate
17. The Internal Revenue Service needs specific cause to order an audit of a company’s tax records.
a.
True
b.
False
False
1
1
Moderate
18. The U.S. Supreme Court has repeatedly upheld the fundamental principle that government employees acting beyond
their authority can still bind the government based upon apparent authority.
a.
True
b.
False
False
1
Moderate
19. Courts will generally defer to an agency’s construction of a statute within its area of expertise.
a.
True
b.
False
True
1
Moderate
20. The legislature may probe agency officials to determine why they acted as they did.
a.
True
b.
False
True
1
Moderate
21. The Fifth Amendment’s protection against self-incrimination does not apply to corporations.
a.
True
b.
False
True
1
Moderate
Moderate
22. Agencies are usually part of which branch of government?
a.
Judicial
b.
Legislative
c.
Executive
d.
They are equally split between the legislative and executive branches
c
1
Easy
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Introduction
Blooms: Knowledge
23. The U.S. government has adopted __________ to facilitate seeking consensus of the most affected groups regarding
the substance of new regulations, a process which arose from the Japanese style of negotiation.
a.
administrative review
b.
federal mediation
c.
regulatory negotiations
d.
rule arbitration
1
Moderate
United States – AACSB: Diversity
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Knowledge
24. Reasons for creating administrative agencies include:
a.
Congress lacks the time to address all of the areas that it controls.
b.
Congress lacks the necessary expertise in all of the areas it controls.
c.
Congress does not have the power to regulate certain areas.
d.
Both that Congress lacks the time to address all of the areas that it controls and that Congress lacks the
necessary expertise in all of the areas it controls.
d
1
Moderate
United States – BUSBROG: – Analytic
6-1 How Administrative Agencies Act
Blooms: Knowledge
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-2 Administrative Agencies and the Constitution
Blooms: Comprehension
25. What three-step procedure does an agency follow in order to promulgate rules or regulations, and in what order is the
procedure performed?
a.
(1) Evaluation of comments (2) notice to the public (3) adoption.
b.
(1) Notice to the public (2) evaluation of comments (3) adoption.
c.
(1) Voting (2) evaluation of comments (3) adoption.
d.
(1) Adoption (2) notice (3) evaluation of results.
26. Rules adopted by a federal agency are published in the:
a.
Federal Reporter.
b.
Federal Register.
c.
Uniform Register.
d.
Legislative Reporter.
b
1
NATIONAL STANDARDS:
United States – BUSBROG: – Analytic
ACCREDITING STANDARDS:
DISC: – AICPA: BB-Legal
Blooms: Knowledge
27. A final agency rule is codified and added to the:
a.
Code of Federal Regulations.
b.
Code of Uniform Regulations.
c.
Code of Legislative Regulations.
d.
Code of Federal Reporting.
1
NATIONAL STANDARDS:
United States – BUSBROG: – Analytic
ACCREDITING STANDARDS:
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Knowledge
28. Which of the following is exempt from the Administrative Procedure Act’s requirement that the public be given notice
and an opportunity to comment before a federal agency can promulgate a rule?
a.
Rules of agency procedure
b.
General statements of policy
c.
Both rules of agency procedure and general statements of policy
d.
There are no exemptions from the notice and comment requirements
b
1
NATIONAL STANDARDS:
United States – BUSBROG: – Analytic
ACCREDITING STANDARDS:
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Comprehension
29. The first Congress established _____ administrative agencies.
a.
one
b.
ten
c.
no
d.
three
d
1
Easy
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Historical Perspective
Blooms: Knowledge
30. __________ has been called the lifeblood of administrative agencies.
a.
Rule making
b.
Administrative adjudication
c.
Informal discretionary action
d.
Policy
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Comprehension
31. Which of the following would a comment letter to an agency generally NOT contain?
a.
Identification of the person concerned
b.
An explanation of why the person making the comment is concerned
c.
A suggestion of a specific change to the rule along with factual information to support the position asserted
d.
An itemization of expected damages
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Comprehension
32. Which of the following presides over formal agency adjudications at the federal level?
a.
An administrative law judge
b.
A federal magistrate
c
1
United States – BUSBROG: – Analytic
c.
A federal district judge
d.
A judicial commissioner
33. Which of the following agencies was created following the terrorist attacks of September 11, 2001, to be responsible
for civilian aspects of national security?
a.
The Stateside Protection Commission
b.
The Department of Homeland Security
c.
The Department for Protection of Civilians
d.
The Critical Civilian Defense and Protection Agency
b
1
Easy
DISC: – AICPA: BB-Legal
United States – BUSBROG: – Analytic
6-1 How Administrative Agencies Act
Blooms: Knowledge
34. In CASE 6.1 Free Enterprise Fund v. Public Company Accounting Oversight Board (2010) before the U.S. Supreme
Court, the plaintiffs brought various constitutional challenges involving the appointment and standards for removal of
members of the Public Company Accounting Oversight Board. How did the Court rule and why?
a.
That limitations on the removal of Board members contravened the Constitution’s separation of powers and
that the unconstitutional provisions were not severable from the remainder of the statute.
b.
That limitations on the removal of Board members contravened the Constitution’s separation of powers but
that the unconstitutional provisions were severable from the remainder of the statute.
c.
That limitations on the removal of Board members were constitutional.
d.
That limitations on the removal of Board members were constitutional only so long as the executive branch
failed to challenge the restrictions placed on the president.
b
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-2 Administrative Agencies and the Constitution
Blooms: Analysis
35. The protection of the __________ Amendment against unreasonable searches and seizures has been largely obliterated
by the courts in the area of administrative law.
a.
First
b.
Fourth
c.
Fifth
d.
Seventh
b
1
Moderate
a
1
United States – BUSBROG: – Analytic
36. A formal administrative adjudication does not include the right to:
a.
a jury trial.
b.
an attorney.
c.
present your evidence.
d.
participate in the proceeding.
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-2 Administrative Agencies and the Constitution
Blooms: Comprehension
37. What are the four primary ways in which an administrative agency functions?
a.
Making rules, conducting formal adjudications, taking informal discretionary actions, and conducting
investigations.
b.
Issuing notice, conducting formal adjudications, taking informal discretionary actions, and conducting
investigations.
c.
Issuing notice, making rules, taking informal discretionary actions, and conducting investigations.
d.
Making rules, conducting informal adjudications, taking formal discretionary actions, and conducting
investigations.
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Knowledge
38. Under the arbitrary and capricious standard, if the agency has a choice between several courses of action, a reviewing
court will presume that the chosen course is:
a.
invalid.
b.
valid.
c.
void.
d.
voidable.
b
1
United States – BUSBROG: – Analytic
39. In CASE 6.2 City of Arlington v. Federal Communications Commission (2013) the U.S. Supreme Court considered:
a.
whether the judicial deference typically afforded by courts applied to the FCC’S determination that it had the
power to act.
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-2 Administrative Agencies and the Constitution
Blooms: Knowledge
b.
whether Congress required the FCC to enact a regulatory program that had a deadline for the issuance of final
regulations.
c.
the fundamental principle that FCC employees acting beyond their authority can bind the federal government.
d.
whether all appropriate procedures within the FCC had been exhausted within the Administrative Procedure
Act.
40. In the Ragsdale v. Wolverine World Wide case discussed in the text, the question was whether the Department of
Labor could validly institute a regulation giving an employee the right to an additional twelve weeks of family or medical
leave if the employer failed to notify the employee that the twelve weeks of leave provided by the Family and Medical
Leave Act ran concurrently with the thirty weeks of paid disability leave provided by the employer. How did the U.S.
Supreme Court rule?
a.
The U.S. Supreme Court invalidated the regulation because it granted entitlements not set forth in the Family
and Medical Leave Act and that were inconsistent with the purpose of the Act.
b.
The U.S. Supreme court upheld the regulation as a valid exercise of the Department of Labor’s power.
c.
The U.S. Supreme Court invalidated the regulation because it had not first been approved by a federal judge
and also because it granted entitlements not set forth in the Family and Medical Leave Act.
d.
The U.S. Supreme Court invalidated the regulation because it had not first been approved by the executive
branch.
a
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Analysis
41. Which of the following is true regarding review of agency procedures?
a.
Agency procedures are not required to conform to the requirements of the Due Process Clause.
b.
Federal courts set agency procedures.
c.
A court may require that an agency comply with its own procedural rules.
d.
Both that federal courts set agency procedures and that a court may require that an agency comply with its
own procedural rules.
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Comprehension
42. Generally, federal administrative agencies are created by:
a
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Analysis
a.
Congress.
b.
the President.
c.
the Supreme Court.
d.
the United States Constitution.
43. __________ by administrative agencies provide a practical decision-making process for repetitive, frequent actions
that are inappropriate to litigate in courts.
a.
De novo decisions
b.
Informal discretionary actions
c.
Formal rule making
d.
Informal rule making
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Comprehension
44. A court will require an agency to comply with its own procedural rules and thus conform to the:
a.
due process clause.
b.
Seventh Amendment.
c.
both the due process clause and the Seventh Amendment.
d.
neither the due process clause nor the Seventh Amendment.
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Comprehension
45. The main issue in CASE 6.3 National Association of Manufacturers v. National Labor Relations Board (2013) was
whether the NLRB:
a.
had the authority to promulgate a rule stating that the employer’s failure to post a notice constituted an “unfair
labor practice.”
b.
had Congressional intent to enact a regulatory program requiring notices to all its employees.
c.
had exhausted all administrative relief before it filed suit.
d.
had an obligation to follow its own rules before it became binding on the public.
a
1
Easy
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Historical Perspective
Blooms: Comprehension
46. Statutes and agency rules often provide that courts performing judicial review of agency action may NOT rule on
which of the following issues?
a.
Issues raised with the agency and won
b.
Issues raised with the agency and lost
c.
Issues raised with the lower courts and lost
d.
Issues not raised with the agency
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Application
47. When an administrative agency adopts a regulation, it becomes binding on the:
a.
agency.
b.
public.
c.
Congress.
d.
the agency and the public, but not Congress.
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-5 Decision-Making Power of Agencies
Blooms: Comprehension
48. In the United States v Morgan case referenced in the text, the U.S. Supreme Court ruled it __________ for a court to
permit questions regarding the __________ of the agency.
a.
impermissible, ripeness
b.
impermissible, subpoena powers
c.
permissible, mental processes
d.
impermissible, mental processes
d
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
a
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-5 Decision-Making Power of Agencies
Blooms: Analysis
49. The federal statute authorizing individuals to obtain copies of government records on any subject that is of interest is
known as:
a.
the Federal Register.
b.
the Code of Federal Regulations.
c.
the Freedom of Information Act.
d.
discovery.
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
6-7 Obtaining Documents from an Agency
Blooms: Comprehension
50. Which of the following is NOT true regarding the Dodd-Frank Wall Street Reform and Consumer Protection Act?
a.
Dodd-Frank will bring about a multi-tier system of banks in which the larger banks are highly regulated but
the smaller community banks are not.
b.
Dodd-Frank created the Financial Stability Oversight Council.
c.
Dodd-Frank significantly curtailed certain powers of the Federal Reserve Board.
d.
Dodd-Frank consolidated the Securities and Exchange Commission and the Commodity Futures Trading
Commission into one agency.
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Inside Story: Devil is in the Details
Blooms: Comprehension
51. Which of the following is NOT exempt from a Freedom of Information Act request?
a.
Records related solely to the internal personnel rules and practice of an agency
b.
Reports prepared by Congress regarding the regulation of an agency
c.
Trade secrets or confidential commercial and financial information
d.
Information compiled for law enforcement purposes
b
1
United States – BUSBROG: – Analytic
Fact Pattern 6-1
Bruce had a disagreement with a new federal agency set up to give additional funds for college to individuals with an
aptitude for math. After a hearing, the agency determined that Bruce had no aptitude for math and that he would not
receive any funding. Bruce, however, was not discouraged. He told his friend Laura, who just graduated from law school,
6-4e No Right to Probe the Mental Processes of the Agency
Blooms: Analysis
that he would simply appeal the decision to federal court, have the judge do a fresh review, and provide additional
information to the judge regarding his math aptitude that the agency did not have. He feels certain that he will win at the
federal court level.
52. Refer to Fact Pattern 6-1. Assuming the decision by the administrative agency was a factual finding, what should
Laura tell Bruce regarding the standard of review the administrative agency will likely apply?
a.
That the agency will likely apply a de novo, or new, review.
b.
That the agency will likely apply an arbitrary and capricious standard in any review.
c.
That the agency will likely apply a substantial evidence standard in any review.
d.
That the agency will likely apply a preponderance of the evidence standard in any review.
53. Refer to Fact Pattern 6-1. What should Laura tell Bruce regarding his plan to provide additional evidence to the
federal court judge?
a.
That his plan is a good one and that the judge will consider the additional evidence.
b.
That judicial review will likely be confined to the record compiled before the agency.
c.
That he will only be allowed to present sworn affidavits for additional judicial review.
d.
That he will only be allowed to present additional test scores for additional judicial review.
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Analysis
Fact Pattern 6-2
Officials of the town of Sunnyville were concerned about the number of dogs running loose. They set up a new
administrative agency called “Dog Control.” The new agency issued a regulation that all dogs must be on leash in public.
Tony who had moved to Sunnyville in the previous month did not own a dog and had no plans to get one. He, however,
thought the regulation was outrageous and decided to sue on the basis that it was not validly enacted. Mona, another
resident, was also concerned about the law. She rents a home with a fence in the backyard that was in public view. She
was concerned that the regulation would be applied to her dogs while in the fenced area. She decided to bring a
preemptive strike and sue the city for revocation of the regulation before the city could sue her. Both Tony and Mona rush
to file suit before the city has a chance to take any action to enforce the new rule.
54. Refer to Fact Pattern 6-2. Which of the following is the best defense the city has against the lawsuit brought by Tony?
a.
That Tony lacks standing to sue.
b.
That courts have no authority to determine the validity of agency rules.
c.
That Tony lacks permission of the agency to sue since authorization of the agency is required prior to a lawsuit
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Analysis
challenging the validity of an agency regulation.
d.
That Tony has not lived in the jurisdiction for at least a year since residence in the jurisdiction for at least a
year is required in order to challenge the validity of a local regulation.
55. Refer to Fact Pattern 6-2. Of the following arguments, which is the best for the city to raise in the lawsuit brought by
Mona?
a.
That courts have no authority to determine the validity of agency regulations.
b.
That the issue is not ripe for determination.
c.
That Mona must be a property owner in the jurisdiction in order to challenge the agency regulation.
d.
That Mona is guilty of self incrimination.
b
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Analysis
56. Brianna is in charge of new federal agency set up to monitor farming operations. The agency wishes to institute a rule
regarding the use of pesticides. Brianna tells her associates to publish the proposed rule but to decline taking comments on
the rule because she does not want to deal with unhappy farmers. Assuming you are legal counsel to the agency, what
would you tell Brianna regarding her plan to refuse comments on the proposed rule?
a.
That her plan is a bad one because the Administrative Procedure Act requires that the public be given an
opportunity to comment before a federal agency can promulgate a rule.
b.
That her plan is a bad one because while the Administrative Procedure Act does not generally require that the
public be given an opportunity to comment, it does require that agencies take public comments when food
safety is involved.
c.
That her plan is a bad one because while the Administrative Procedure Act does not generally require that the
public be given an opportunity to comment, it does require that agencies take public comments in all cases
other than rule involving taxation.
d.
That her plan is a good one.
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
6-1 How Administrative Agencies Act
Blooms: Application
57. Critics of administrative agencies claim that they violate the doctrine of separation of powers. Explain the basis for
this criticism. Explain why agencies are so prevalent despite the absence of any explicit provision for their existence in the
1
DISC: – AICPA: BB-Legal
6-4 Judicial Review of Agency Actions
Blooms: Analysis
Constitution. Discuss fully.
58. Discuss the general rule regarding when a court will entertain an appeal to an administrative process and the reason for
the rule.
59. Discuss what is meant by the ripeness doctrine, why it is needed, when issues involve ripeness usually occur, and
when a dispute is generally ripe for determination.
60. The president of a company wishes to comment on a proposed administrative agency rule. What does a comment letter
usually contain?
61. Which categories of documents in the federal government’s possession may the government refuse to provide for
public inspection under the Freedom of Information Act?
2.
3.
4.
5.
7.
institutions.
9.
1
Moderate
62. As set forth in the text, what are the seven basic steps for working successfully with an administrative agency?
1.
2.
3.
process.
5.
6.
7.
1
Moderate
63. Courts will generally not defer to an agency’s construction (interpretation) of a statute, even if it is within the agency’s
area of expertise.
a.
True
b.
False
False
1
Moderate
