Question #37
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: 15
Status: Correct
Correct Answer: A
Question
Allen Parsons, a CFA candidate, suspects a colleague at his firm of engaging in an illegal activity. Which of the following statements about procedures for compliance involving Standard I(A), Knowledge of the law is NOT correct? Parsons:
Answer Choices:
A. is required to report this legal violation to the appropriate governmental or regulatory organizations
B. should urge his firm to attempt to persuade the perpetrator to cease such conduct
C. should consult counsel to determine whether the conduct is, in fact, illegal
Explanation
Standard I(A), Knowledge of the law, does not require that Parsons report legal violations
to the appropriate governmental or regulatory organizations, but such disclosures may be
appropriate under certain circumstances.
(Module 42.1, LOS 42: I(A))