Question #24
Reading: Reading 42.1 Standards of Professional Conduct Guidance for Standards I
PDF File: Reading 42.1 Standards of Professional Conduct Guidance for Standards I.pdf
Page: 10
Status: Correct
Correct Answer: A
Question
Marc Feldman, CFA, is manager of corporate investor relations for a high-tech startup, zippy.com, in Boise, Idaho. Feldman learns that Larry Smith, controller, is altering the accounting records. Knowing the data is incorrect, Feldman releases Smith's financial data to investors. This action:
Answer Choices:
A. constitutes a violation of the Standard concerning duty to employer
B. constitutes a violation of Standard III(
C. constitutes a violation of his fundamental responsibilities under the Code and Standards
D. concerning performance presentation
Explanation
As a CFA Institute member, Feldman is bound, under Standard I(A), not to "knowingly
participate or assist in any violation of such laws, rules, or regulations." Since it should be
clear that releasing bogus financial information is in contravention of laws, rules, and
regulations, and since he knows that the data is purposely distorted, he must not release
the data to the public. Doing so places him in violation of the Code and Standards.