Question #24
Reading: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV
PDF File: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV.pdf
Page: 10
Status: Incorrect
Correct Answer: A
Your Answer: B
Question
Bill Fence, CFA, supervises a group of research analysts, none of whom have earned the CFA designation (nor are they CFA candidates). On several occasions he has attempted to get his firm to adopt a compliance system to ensure that applicable laws and regulations are followed. However, the firm's principals have never adopted his recommendations. Fence should most appropriately:
Answer Choices:
A. refuse supervisory responsibility
B. take no further action, because by encouraging his firm to adopt a compliance system he has fulfilled his obligations under the Code and Standards
C. report the inadequacy by submitting a complaint in writing to the CFA Institute Professional Conduct Program
Explanation
According to Standard IV(C), Responsibilities of Supervisors, if the member cannot
discharge supervisory responsibilities because of a poor or nonexistent compliance
system, the member should decline in writing to accept supervisory responsibility until the
firm adopts an adequate system.
(Module 42.7, LOS 42: IV(C))