Question #33
Reading: Reading 42.5 Standards of Professional Conduct Guidance for Standards V
PDF File: Reading 42.5 Standards of Professional Conduct Guidance for Standards V.pdf
Page: 18
Status: Correct
Correct Answer: A
Question
Lee Hurst, CFA, is an equity research analyst who has recently left a large firm to start independent practice. He is able to re-create several of his previous research reports, based on his clear recollection of supporting documentation he compiled at his previous employer. He publishes the reports and obtains several new clients. Hurst is most likely:
Answer Choices:
A. in violation of the Standard concerning record retention
B. in violation of the Standard concerning diligence and reasonable basis
C. not in violation of any Standard
Explanation
Hurst is most likely in violation of Standard V(C) Record Retention because the supporting
documentation is unavailable. He needs to recreate the supporting records based on
information gathered through public sources or the covered company. He may have a
reasonable basis for his recommendations and have been diligent in his analysis, but must
reconstruct the records of this analysis before issuing the reports.
(Module 42.8, LOS 42: V(C))